10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended December 31, 2007

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 333-108661

UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD.

UCDP FINANCE, INC.

(Exact name of Registrant as specified in its charter)

Florida Florida	59-3128514 42-1581381
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1000 Universal Studios Plaza

Orlando, FL 32819-7610

407-363-8000

(Address and telephone number of principal executive offices)

Securities registered under Section 12(b) of the Exchange Act:

None.

Securities registered under Section 12(g) of the Exchange Act:

None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  x    No  ¨

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  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

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

Large accelerated filer  ¨	Accelerated filer  ¨
Non-accelerated filer  x	Smaller Reporting company  ¨
(Do not check if a smaller reporting company)

Indicate by checkmark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2):    Yes  ¨    No  x

As of March 20, 2008 there were 100 shares of common stock of UCDP Finance, Inc. outstanding. UCDP Finance, Inc. is a wholly-owned subsidiary of Universal City Development Partners, Ltd. Universal City Development Partners, Ltd. has no outstanding common equity which is not held by an affiliate.

DOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS

	PART I
Item 1.	Business	3
Item 1A.	Risk Factors	16
Item 1B.	Unresolved Staff Comments	21
Item 2.	Properties	21
Item 3.	Legal Proceedings	22
Item 4.	Submission of Matters to a Vote of Security Holders	23
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
Item 6.	Selected Financial Data	24
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 8.	Financial Statements and Supplementary Data	40
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	63
Item 9A.	Controls and Procedures	63
Item 9B.	Other Information	64
	PART III
Item 10.	Directors and Executive Officers of the Registrant	65
Item 11.	Executive Compensation	69
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	75
Item 13.	Certain Relationships and Related Transactions	75
Item 14.	Principal Accounting Fees and Services	79
	PART IV
Item 15.	Exhibits, Financial Statement Schedules	80
	Index to Exhibits
	Signatures	85
	Certifications

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Item 1. Business

Certain definitions and financial presentation

All references in this Form 10-K to “Universal Orlando”, “we”, “us”, “our”, the “Company” or “UCDP” refer to Universal City Development Partners, Ltd., and its respective subsidiaries, collectively the registrant. “Holding I” refers to Universal City Florida Holding Co. I, limited partner of UCDP. “UCDP Ltd.” refers only to Universal City Development Partners, Ltd. “Holding II” refers to Universal City Florida Holding Co. II, general partner of UCDP. “Holdings” or “UCHC” refers collectively to Holding I and Holding II. “Finance” refers to UCFH I Finance and UCFH II Finance collectively. “Universal Orlando Resort” refers to the resort in Orlando, Florida, which includes our two theme parks (Universal Studios Florida and Universal’s Islands of Adventure), our entertainment complex (Universal CityWalk), and the three themed hotels owned by UCF Hotel Venture (in which Vivendi Universal Entertainment has an indirect minority interest and which are not part of our financial statements). We derive our revenue related to the three themed hotels owned by UCF Hotel Venture from lease payments reflected in the other revenue line item. The Loews Portofino Bay Hotel at Universal Orlando Resort (or “The Loews Portofino Bay Hotel”), The Hard Rock Hotel (or “The Hard Rock Hotel”) and The Loews Royal Pacific Resort at Universal Orlando Resort (or “The Loews Royal Pacific Resort”) comprise the UCF Hotel Venture. “CityWalk” refers to Universal CityWalk located at Orlando, Florida. “UCDP Finance” refers to UCDP Finance, Inc., a wholly owned subsidiary of ours. “Universal CPM” refers to Universal City Property Management II LLC, one of the partners in Holdings. “NBC Universal” refers to NBC Universal, Inc., the indirect majority parent of Universal Studios, Inc. and Vivendi Universal Entertainment. “USI” refers to Universal Studios, Inc., an indirect wholly-owned subsidiary of NBC Universal and the indirect parent of Vivendi Universal Entertainment. “Vivendi Universal Entertainment” refers to Vivendi Universal Entertainment LLLP, the parent company of Universal CPM and our manager. “Blackstone” refers collectively to Blackstone UTP Capital LLC, Blackstone UTP Capital A LLC, Blackstone UTP Offshore LLC and Blackstone Family Media Partnership III LLC and their sole members, who hold each of their respective interests in and are the remaining partners in Holdings. “Universal Parks & Resorts Vacations” refers to our subsidiary Universal City Travel Partners d/b/a Universal Parks & Resorts Vacations. “Universal Parks & Resorts” refers to a division of Vivendi Universal Entertainment. Our organizational structure is graphically depicted below. The “senior secured credit facility” or “senior secured credit agreement” refers to the term loan of UCDP (as evidenced by the Amended and Restated Credit Agreement dated as of December 9, 2004, as may be further amended) which matures in 2011 and is included in our consolidated financial statements. The “April 2010 notes” or “our notes” refers to the 11.75% senior notes issued by UCDP which mature in April 2010 and are included in our consolidated financial statements. These long-term borrowings are described more fully in note 5 to our consolidated financial statements in “Item 8. Financial Statements and Supplementary Data.” The “May 2010” notes refers to the floating rate senior notes and the 8.375% senior notes issued by Holdings and Finance which mature in May 2010. This Form 10-K contains financial measures not prepared in accordance with United States generally accepted accounting principles, including EBITDA (as defined). All references to EBITDA refer to net income before interest, taxes and depreciation and amortization. For further explanation of EBITDA and a reconciliation of EBITDA from net income and from net cash and cash equivalents provided by operating activities, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Certain items contained herein in the prior years’ consolidated financial statements have been reclassified to conform to the 2007 presentation. This reclassification is described in note 2 to our consolidated financial statements in “Item 8. Financial Statements and Supplementary Data.”

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Trademarks and Copyrights

Universal Studios Florida, Universal’s Islands of Adventure, Universal Studios, Universal Orlando, Universal CityWalk, Universal Parks & Resorts Vacations, A Vacation From the Ordinary, TWISTER...Ride It Out, E.T. Adventure, JAWS, Revenge of the Mummy, The Flying Unicorn, Pteranadon Flyers, Dueling Dragons, The Lost Continent, Poseidon’s Fury, The Eighth Voyage of Sindbad, Halloween Horror Nights, CityWalk, CityJazz and Red Coconut Club are registered trademarks of Universal Studios. Disaster! A Major Motion Picture Ride…Starring You!, Bob Marley’s—A Tribute to Freedom, the groove, Universal Express, and Universal Express Plus are service marks of Universal Studios. HARRY POTTER, character names and related indicia are trademarks and copyrights of Warner Bros. Entertainment, Inc. Harry Potter Publishing Rights are copyrights of JKR. The Simpsons are trademarks and copyrights of Twentieth Century Fox Film Corporation. The Amazing Adventures of Spider-Man, Spider-Man, The Incredible Hulk Coaster, Dr. Doom’s Fearfall, Storm Force Accelatron, Marvel Super Hero Island and Marvel Super Hero character names and likenesses are trademarks and copyrights of Marvel and copyrights of Universal Studios. Barney and A Day in the Park with Barney are trademarks and copyrights of Lyons Partnership, L.P. The names and characters Barney, Baby Bop, BJ and Super-Dee-Duper are trademarks of Lyons Partnership, L.P. Barney and BJ are Reg. U.S. Pat. & Tm. Off. Jurassic Park, Jurassic Park River Adventure, Camp Jurassic, and Jurassic Park Discovery Center are registered trademarks of Universal Studios/Amblin. Dudley Do Right’s Ripsaw Falls is a trademark and copyright of Ward Prods. Popeye & Bluto’s Bilge Rat Barges and all Popeye characters are trademarks and copyrights of KFS, Inc. and trademarks of Hearst Holdings, Inc. Dr. Seuss properties are trademarks and

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copyrights of Dr. Seuss Enterprises, L.P. T2 and Terminator are registered trademarks of StudioCanal Image S.A. Men In Black and Alien Attack are trademark and copyrights of Columbia Pictures Industries, Inc. Beetlejuice and Beetlejuice’s Graveyard Revue are trademarks and copyrights of The Geffen Film Company and Universal Studios. Fear Factor is a trademark and copyright of Endemol Netherlands B.V., Inc. Nickelodeon, SpongeBob Squarepants, The Fairly Odd Parents, Hey Arnold!, Rugrats, The Adventures of Jimmy Neutron Boy Genius, Jimmy Neutron’s Nicktoon Blast, and all related titles, logos and characters are trademarks of Viacom International Inc. Woody Woodpecker’s KidZone and Woody Woodpecker’s Nuthouse Coaster are registered trademarks of Walter Lantz. Shrek 4-D is the trademark and copyright of DreamWorks Animation, LLC. Hard Rock Hotel, Hard Rock Cafe and Hard Rock Live are registered trademarks of Hard Rock Cafe International (USA), Inc. Pat O’Brien’s is a copyright 2008 of Pat O’Brien’s Bar, Inc. Emeril’s is the registered trademark of Emeril Lagasse. Jimmy Buffett’s Margaritaville is the registered trademark of Jimmy Buffett. Latin Quarter is the trademark of Latin Quarter Entertainment, Inc. NASCAR Sports Grille Orlando & NASCAR are registered trademarks of NASCAR, Inc. Bubba Gump Shrimp Co. is a trademark and copyright 2008 of Par, Pic. Cinnabon is the registered trademark of Cinnabon, Inc. Starbucks is a registered trademark of Starbucks Coffee Company. Blue Man Group is a registered trademark of Blue Man Productions, Inc. Fossil is the registered trademark of Fossil, Inc. Fresh Produce is the registered trademark of Fresh Produce, Inc. Quiet Flight is the registered trademark of Quiet Flight Surf Shop, Inc. The Endangered Species Store is the registered trademark of Kupono Investment, Inc. NBA City is the registered trademark of NBA Properties, Inc. Walt Disney World, The Magic Kingdom, EPCOT, Disney’s Hollywood Studios and Disney’s Animal Kingdom are registered trademarks and service marks of Disney Enterprises, Inc. Wet ‘n Wild is the registered trademark of Wet’n Wild, Inc. SeaWorld, Discovery Cove, Aquatica and Busch Gardens are registered trademarks of Busch Entertainment Corporation.

General

We own and operate two theme parks, Universal Studios Florida and Universal’s Islands of Adventure, and CityWalk, a dining, retail and entertainment complex, at Universal Orlando Resort, a multi-day vacation destination. Universal Orlando Resort also includes three themed hotels, The Loews Portofino Bay Hotel at Universal Orlando, The Hard Rock Hotel and The Loews Royal Pacific Resort at Universal Orlando, which are located within walking distance of our theme parks and CityWalk. These hotels are owned by UCF Hotel Venture, in which Vivendi Universal Entertainment has an indirect minority interest. The results of the UCF Hotel Venture are not contained in our financial statements. We derive our revenue related to the three themed hotels owned by UCF Hotel Venture from lease payments reflected in the other revenue line item. The resort is located in Orlando, Florida. Our theme parks combine well-known movie, TV, comic and story book characters with exciting and technologically advanced rides and attractions.

Universal Studios Florida

Universal Studios Florida is a movie-based theme park designed to allow guests to become part of their favorite movies. Universal Studios Florida features a total of 19 rides, attractions and shows along with facades of famous film locations. Some of our current rides and shows are:

• Revenge of the Mummy^SM: Guests plunge into total darkness, as they face fireballs, beetles and an army of mummies on a psychological thrill ride.

• Fear Factor Live: Guests have the opportunity to see if they have what it takes to conquer their fears in the unscripted, unpredictable and unlike anything you have ever seen before theme park experience, which is the first based on a reality show.

• Shrek 4-D™: Guests join Shrek^®, Donkey and Princess Fiona™ on an all new “4-D” adventure that picks up where DreamWorks’ Oscar^® winning movie left off.

• The Simpsons Ride™: Careen and crash your way through Krustyland in the wild and hilarious The Simpsons Ride™, opening spring 2008.

• JAWS^®: A multi-sensory water-based ride adventure which brings guests face to face with a three ton great white shark during a boat ride off the coast of Amity.

• Jimmy Neutron’s Nicktoon Blast™: A wild rocket chase through the world of some favorite Nicktoons^®, such as SpongeBob SquarePants^® and the Rugrats^®.

• Disaster! A Major Motion Picture…Starring You!: Guests take a harrowing trip into the world of disaster movies. This attraction opened in late 2007 and if all goes according to plan, it’ll be a total catastrophe!

• E.T. Adventure^®: Guests climb aboard star bound bicycles to help E.T. save his dying planet and continue the saga of one of the world’s most beloved screen characters.

• Terminator 2^®: 3D Battle Across Time: A cyber-adventure attraction that puts guests in the middle of the action with live stunts and high-tech special effects.

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• TWISTER...Ride It Out^®: The attraction that puts guests a mere 20 feet away from the awesome spectacle of a five-story tornado including intensifying winds and pounding rain in an indoor vortex.

• MEN IN BLACK™ Alien Attack™: The world’s first life-size, ride-through interactive video game where guests zap aliens and compete with each other for high scores.

• Beetlejuice’s Graveyard Revue™: A revue-style show featuring the official Universal monsters such as Frankenstein, Dracula and The Wolfman singing and dancing to rock ‘n roll classics. This show was redesigned during 2006 and won the “Big E” Entertainment Award presented by IAAPA for Best Overall Production, given to shows within various production budget ranges.

• A Day in the Park with Barney™: A sing-along interactive show where children can see Barney^®, Baby Bop™ and BJ^® live every day.

The streets of Universal Studios Florida feature facades recreating famous movie locations in San Francisco, New York and Hollywood. These facades recreate the “backlot” and are used as locations for filmed entertainment productions. We believe Universal Studios Florida also appeals to younger children with attractions such as Woody Woodpecker’s KidZone^® and A Day in the Park with Barney, featuring an interactive show and play area for pre-schoolers. At Jimmy Neutron’s Nicktoon Blast, kids can board rockets and blast off on a wild chase through the worlds of their favorite Nicktoons, while Fear Factor Live and Beetlejuice’s Rock ‘n Roll Graveyard Revue provide entertainment for all ages.

As of December 31, 2007, food and beverage facilities at Universal Studios Florida included two full service restaurants, four cafeteria-style facilities and 14 fast-food locations providing approximately 3,200 seats. The park also has more than 35 food snack carts.

Universal’s Islands of Adventure

With 20 rides, attractions and shows, Universal’s Islands of Adventure won the 2006 Applause Award that is given out every two years by the International Association of Amusement Parks and Attractions to the theme park whose management, operations and creative accomplishments have inspired the amusement industry with their thought, originality and sound business development and was selected as the “World’s Top Theme Park” by Theme Park Insider in three of the last five years. This park combines advanced technology, innovative ride design and popular themes and characters to provide guests with exciting entertainment experiences drawn from the great stories of comics, movies, myth and books.

Visitors enter Universal’s Islands of Adventure through a Port of Entry^® where they begin their journey through the themed islands of the park. In this area, visitors find numerous street merchants, shops and restaurants. Once through the Port of Entry, our guests have a panoramic view across a large central lagoon surrounded by five distinct and individually themed islands:

• Seuss Landing™: The beloved characters of Dr. Seuss come to life in Seuss Landing with rides and attractions such as The Cat In The Hat™, Caro-Seuss-el™, One Fish, Two Fish, Red Fish, Blue Fish™, If I Ran The Zoo™ and The High In The Sky Seuss Trolley Train Ride™.

• The Lost Continent^®: In The Lost Continent, visitors participate in rides and attractions featuring epic heroes and their many adventures, including Dueling Dragons^®, the world’s first double roller coaster; Poseidon’s Fury^®, an expedition of explorers that rediscovers a legendary lost underwater city; and the Eighth Voyage of Sindbad^®, a live-action stunt showcase, which combines stunts, pyrotechnic effects and high seas heroics. The marketplace at The Lost Continent surrounds visitors with games of skill and chance, numerous themed shops, and live entertainment.

• Jurassic Park^®: Visitors to Jurassic Park encounter the mysteries and wonders of a prehistoric world. The Jurassic Park River Adventure^® takes guests on a raft ride tour through Jurassic Park’s dinosaur habitats. Camp Jurassic^® provides children with a prehistoric playground of dinosaur net traps while the Pteranodon Flyers^® coaster ride soars overhead. The Jurassic Park Discovery Center^® features entertaining and educational hands-on activities designed for the whole family to enjoy.

• Toon Lagoon^®: In Toon Lagoon, a line-up of popular comic strip and cartoon characters come to life on rides and attractions such as Popeye and Bluto’s Bilge-Rat Barges^®, where passengers white-water raft around Popeye’s island in pursuit of Popeye^®, Bluto™, Olive Oyl™ and Swee’ Pea; and Dudley Do-Right’s Ripsaw Falls^®, a high-speed log flume ride featuring appearances by the cast of characters from the Dudley Do-Right animated television series.

• Marvel Super Hero Island^®: Visitors to Marvel Super Hero Island discover superheroes and arch villains locked in battle in a place where good always triumphs over evil. Marvel Super Hero Island^® employs a combination of motion simulation and theatrical production techniques to create a unique theme park experience for our guests with such rides as The Amazing Adventures of Spider-Man^®, voted “Best Overall Attraction” by Theme Park Insider in 2002, 2003, 2004 and 2005; and “Best Dark Ride” by Amusement Today in 2006, the Incredible Hulk Coaster^®, named the number one steel coaster in the world by the Discovery Channel on “Top Ten Coasters” in 2002; and Dr. Doom’s Fearfall^®, where guests skyrocket 150 feet straight up and then plunge back to earth in less than 3 seconds.

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As of December 31, 2007, food and beverage facilities at Universal’s Islands of Adventure included two full service restaurants, five cafeteria-style facilities and 15 fast-food locations providing approximately 3,600 seats. The park also has more than 20 food snack carts. Universal’s Islands of Adventure also features Mythos, our award winning sit down restaurant that was named “World’s Best Theme Park Restaurant” by Theme Park Insider again in 2007 for the fifth straight year.

CityWalk

CityWalk is a diverse collection of restaurants, retail outlets, nightclubs and a 20-screen cineplex located between the entrances to both Universal Studios Florida and Universal’s Islands of Adventure. The 30-acre complex offers free general admission, except for cover charges for admission to various night clubs or shows. General parking is free after 6:00 p.m. except on designated special event nights. Easily accessible by foot or boat from the three on-site hotels and our theme parks, CityWalk’s restaurants and storefronts offer a selection of daytime dining and shopping opportunities. In the evening, as guests emerge from our theme parks, CityWalk provides a comprehensive array of nighttime entertainment facilities, including dance clubs and live entertainment. Patrons of CityWalk can enjoy:

• A wide variety of table service restaurants including Emeril’s^® of Orlando, Hard Rock Cafe^® Orlando, Jimmy Buffett’s^® Margaritaville^®, Latin Quarter™, NASCAR Sports Grille™ , NBA City^® and Bubba Gump’s Shrimp Co. Restaurant and Market™, along with numerous fast-food venues featuring various themes designed to cater to a wide variety of tastes.

• Nightclubs such as Bob Marley’s—A Tribute to Freedom^SM , the groove^SM, Pat O’Brien’s^® Orlando and the Red Coconut Club^® that offer guests an array of music from reggae to blues, as well as other live entertainment and dancing; Jimmy Buffett’s^® Margaritaville^® and Latin Quarter™ also turn into nightclubs after 11:00 p.m.

• The Hard Rock Live!^® Orlando concert venue, which has featured such acts as Elton John, Elvis Costello, Maroon 5, Indigo Girls, Bonnie Raitt, Moody Blues, and Sheryl Crow.

• Retail stores, such as Island Clothing Co., The Endangered Species Store^®, Fresh Produce^®, Fossil^® and Quiet Flight^® Surf Shop.

• A 20-screen movie theater which ranks in the top five in Orlando market share, based on revenues as reported by Rentrak Corporation.

• A 1,015 seat Sharp AQUOS theater houses the Blue Man Group show, one of nine permanently based Blue Man Group productions produced throughout the world. The Blue Man Group show combines, music, comedy and multimedia theatrics to produce a totally unique form of entertainment.

As of December 31, 2007, there were 34 facilities at CityWalk. We owned and operated 13 of these facilities and leased 19 to third parties and affiliated entities. We managed two of the facilities that we leased to third parties pursuant to management agreements. We also have an ownership interest in the form of joint ventures for four of the entities that lease establishments from us.

Seasonal Events

Universal Studios Florida and Universal’s Islands of Adventure hold a number of seasonal events in addition to the normal operations previously described. These events include our Macy’s Holiday Parade where we recreate the pageantry of the classic holiday parade, Mardi Gras where we set up our own French Quarter with a themed parade and live entertainment, and Halloween Horror Nights^® where we transform the park into a nightmarish realm filled with terrifying haunted houses, scare zones, and hordes of ghoulish creatures lurking in the shadows.

Intellectual property

UCDP licenses the right to use a substantial number of intellectual properties as walk-around characters and as themed elements in rides, attractions, food and retail outlets as well as on merchandise developed by or for us. UCDP’s rights to use third party intellectual property are of critical importance to our operations and currently cost us a minimum of $4.6 million annually. We have acquired the right to use the majority of this intellectual property pursuant to the terms of UCDP’s partnership agreement which has been confirmed by a separate License Agreement (the “Universal License Agreement”) with Universal Studios, Inc. and Universal City Studios LLLP, an indirect, wholly-owned subsidiary of Vivendi Universal Entertainment, and certain of their affiliates, collectively referred to as the “Universal License Parties.” UCDP also licenses certain intellectual property rights directly from unaffiliated third parties, including certain rights to the characters and other intellectual property contained in the Harry Potter ^TM books and motion pictures, which are licensed directly to us pursuant to the License Agreement (the “WB Agreement”) between Warner Bros. Consumer Products Inc. (“WB”) and UCDP, and various elements based on The Simpsons ^TM, including certain

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characters and elements licensed to us pursuant to the License Agreement (the “Fox Agreement”) among UCDP, Universal Studios LLLP and Twentieth Century Fox Licensing & Merchandising (“Fox”). The Universal License Agreement and our partnership agreement were amended on May 25, 2007, in connection with the execution of the WB Agreement. References to the Universal License Agreement and our partnership agreement are to those documents as amended in connection with the WB Agreement.

Certain of our license agreements and the indentures governing the April 2010 notes and the May 2010 notes have change of control provisions. The change of control provisions are the result of negotiations among us and the other parties to such agreements. Our parent entities, to our knowledge, have no present intention to enter into a change of control transaction, although it is possible they may do so in the future. There are various consequences to us if a change of control occurs under our license agreements, including, in some circumstances, termination of the applicable license agreement. Under certain circumstances, a given event could trigger the change of control provisions of some of the license agreements without triggering the change of control provisions of the indentures governing the April 2010 notes and the May 2010 notes. For example, if Blackstone were to increase its combined voting power in Holding I and Holding II to greater than 50% of each of such entities, this event would trigger the change of control provisions of the WB Agreement. At 100% combined voting power in Holding I and Holding II, the event would also trigger the change of control provisions of our partnership agreement, as confirmed through the Universal License Agreement. Also, if Blackstone or an entity with at least 75% of its capital stock owned by Blackstone acquired an ownership interest in Universal CPM, this event would trigger the change of control provisions of both our partnership agreement, as confirmed through the Universal License Agreement, and the WB Agreement, without triggering the change of control provisions of the indentures. For further information, see “Item 1A. Risk Factors.”

Universal License Agreement

The Universal License Agreement grants UCDP a non-exclusive right to use the name “Universal” in connection with the operation of our theme parks and the non-exclusive right to use all proprietary and creative elements controlled by the Universal License Parties, including rights licensed by the third parties to the Universal License Parties and then sublicensed by the Universal Licensed Parties to UCDP. The rights under the Universal License Agreement are granted to UCDP without cost, except for reimbursement of costs paid by the Universal License Parties to unaffiliated third parties to obtain or maintain third-party licenses, and are subject to third party contractual limitations. The Universal License Agreement also provides that UCDP will be informed of the status of negotiations relating to potential acquisitions of proprietary creative elements for possible new attractions at our theme parks.

In connection with the Universal License Agreement, UCDP’s right to use the Universal name in connection with Universal Orlando continues indefinitely at no cost to us until the latest of (i) 30 months after a change of control (as described in our partnership agreement), (ii) 30 months after any termination of the WB Agreement prior to its scheduled expiration, or (iii) the expiration of the WB agreement in accordance with its terms. The right to use the creative and proprietary elements controlled by the Universal License Parties continues at no cost to us, subject to third party contractual limitations, until the later of (a) the expiration or termination of the WB Agreement or, if sooner, the date that neither UCDP nor its permitted successor or assign is a party to the WB Agreement, or (b) the date such intellectual property rights would otherwise cease to be licensed to us. (see Item IA. Risk Factors—Our dependence on Universal Studios, Inc. and its affiliates; risks related to a change of control).

Intellectual properties licensed to UCDP under the Universal License Agreement include the following:

• The Amazing Adventures of Spider-Man^®; Doctor Doom’s Fearfall^®; The Incredible Hulk Coaster^®; and Storm Force Acceletron^® licensed by Marvel Characters, Inc.

• The Cat in the Hat™, If I Ran the Zoo™, One Fish, Two Fish, Red Fish, Blue Fish™ , The High in the Sky Seuss Trolley Train Ride! ^™, Caro-Seuss-el™ and all other Dr. Seuss-related thematic elements licensed by Dr. Seuss Enterprises.

• Shrek^®, as seen in Shrek 4-D™, licensed by DreamWorks Animation, LLC.

• Popeye & Bluto’s Bilge-Rat Barges^® and Olive Oyl™ licensed by King Features, a division of The Hearst Corporation.

• Dudley Do-Right’s Ripsaw Falls^® licensed by Jay Ward Productions.

• Various Nickelodeon elements licensed by MTV Networks, including certain characters and elements used in the Jimmy Neutron’s Nicktoon Blast™ attraction.

The intellectual property rights UCDP licenses from others vary in term, with some lasting for as long as the relevant attraction is operational and others expiring periodically over the next several years. The intellectual property rights granted to UCDP pursuant to the Universal License Agreement and our other third party license agreements generally include the right to use all creative elements, trademarks, trade names and characters in theming for rides and attractions and in retail outlets, and, in some cases, to feature them as

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walk-around characters. Most of UCDP’s license agreements are subject to customary approval rights concerning the design of merchandise and marketing materials using the themed elements owned by the licensors. Most of UCDP’s intellectual property rights, whether acquired directly or pursuant to the Universal License Agreement, require the payment of basic license and royalty fees to unaffiliated third parties on merchandise manufactured by or for us that include the licensed elements and are generally terminable if UCDP breaches by failing to maintain quality standards or fail to use the properties in accordance with the license.

While some intellectual properties used at our theme parks and the full scope of our present use of some intellectual properties may not, in all cases, be covered by formal licenses, we believe UCDP’s rights to use these intellectual properties are secured on the basis of custom, practice and knowledge of the relevant intellectual property owners. We believe that UCDP’s rights to the intellectual properties we use at our theme parks are sufficient for the current operation of our business.

The following is a brief description of the material terms of the material license agreements entered into by Universal Studios, Inc. or its affiliates through which UCDP sublicenses the right to use certain of its themed elements:

Marvel

Universal Studios, Inc. has a license agreement with Marvel Characters, Inc. (“Marvel”) pursuant to which UCDP holds a sublicense to use properties and elements owned by Marvel. Marvel receives an annual license fee and a guaranteed annual royalty fee for all merchandise themed with Marvel characters. Pursuant to the license agreement, the Marvel properties are entitled to certain levels of advertising and publicity in connection with the marketing of our theme parks. Our use of the Marvel elements for theming, promotions and other purposes are subject to Marvel’s reasonable approval. We have geographical exclusivity east of the Mississippi River with regard to the specific Marvel characters we utilize. The license for the Marvel properties does not prohibit its assignment and is for the duration of our use of attractions themed around Marvel characters.

Dr. Seuss

Universal Studios, Inc. has a license agreement with Dr. Seuss Enterprises, L.P. (“Dr. Seuss Enterprises”) pursuant to which we obtain the right to use characters owned by Dr. Seuss Enterprises. Universal Studios, Inc. has world wide theme park exclusivity for use of the Dr. Seuss elements with the provision that Universal Studios, Inc. will not develop or operate more than three theme parks based on Dr. Seuss elements in the United States, as well as a non-exclusive license to make and sell Dr. Seuss themed merchandise. Dr. Seuss Enterprises is paid a guaranteed yearly merchandise royalty that varies with the paid attendance at our theme parks for the applicable year. The license will continue for so long as the Dr. Seuss properties are used in our theme parks and is assignable to a successor owner of theme parks containing Dr. Seuss elements.

DreamWorks

The term of the license agreement that Universal Studios, Inc. had with DreamWorks, L.L.C. (“DreamWorks”) and DreamWorks Animation, LLC, pursuant to which we held a sublicense allowing us to incorporate certain properties and elements owned or controlled by DreamWorks into our theme parks, was terminated on January 31, 2006; however the agreement provides for certain rights to be retained by Universal Studios Inc. pursuant to the “Post-Term Exploitation of Properties” section of the agreement. Pursuant to this section, we continue to hold a sublicense which allows us to continue to operate our Shrek 4-D™ attraction, use certain strolling characters, and develop and sell merchandise based upon DreamWorks properties we used prior to January 31, 2006, for so long as we continue to pay to DreamWorks the applicable annual fees and merchandise royalties for such use. Additionally, if we want to exploit any other properties released by DreamWorks or DreamWorks Animation on or prior to January 31, 2006, we will need to give notice to DreamWorks, and commence paying the applicable fees, by the third anniversary of the domestic release by DreamWorks of such other property (which means that, on any date, we will lose the right to exploit such other DreamWorks or DreamWorks Animation properties that were domestically released more than three years prior to such date). We have no rights with respect to any DreamWorks or DreamWorks Animation properties released after January 31, 2006.

King Features

Universal City Studios LLLP, a subsidiary of Universal Studios. Inc., has a license agreement with King Features, a division of The Hearst Corporation, pursuant to which we obtain the right to use certain characters, such as Popeye^®, Bluto™ and Olive Oyl™. We have a license to use the King Features elements for our theme park attractions, advertising, publicity and marketing, subject to reasonable approval rights of King Features, until 2019, with options to renew in ten-year successive increments so long as we continue to operate a Popeye^® themed attraction. The license is assignable and Universal City Studios LLLP has theme park exclusivity within the United States and Canada with respect to the use of the characters and a non-exclusive right to manufacture and sell related merchandise. King Features receives an annual fee and a guaranteed annual royalty fee for all merchandise themed with King Features characters.

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The following is a brief description of the material terms of the WB agreement, which UCDP licenses directly from Warner Bros. Consumer Products, Inc.

Harry Potter

Pursuant to the WB Agreement, UCDP has directly licensed certain rights to the characters and other intellectual property contained in the Harry Potter™ books and motion pictures. This license will be used, among other purposes, for appropriately themed attractions, merchandise stores and food venues which will be incorporated in a new “island” at Universal’s Islands of Adventure that will include a re-themed portion of one of its existing “islands” and additional undeveloped real estate. These attractions should be open by summer of 2010. Under the terms of the agreement, we have the right to use the licensed property until approximately ten years after the scheduled grand opening date of the attractions. We also have the ability to extend the term for two successive five-year renewal periods. Our use of the licensed property for the attractions, theming, promotions, merchandise and other purposes is subject to the sole approval of WB. The agreement provides us with the exclusive right to use the licensed property in theme parks, amusement parks, water parks and stand-alone themed venues similar to those found in a theme park within a 250-mile radius around Universal’s Islands of Adventure. UCDP will pay WB various license fees, merchandise royalty payments, and other payments throughout the term of the agreement.

The WB Agreement is terminable, subject to applicable cure periods, if we fail to maintain quality standards, fail to invest minimum required capital, fail to use the properties in accordance with the license, or upon other customary events of default. In addition, if we sell Universal’s Islands of Adventure, or if 50% of UCDP is not owned by NBC Universal, Inc. or any of its affiliates (collectively, “NBCU”), the agreement is terminable unless the buyer of Universal’s Islands of Adventure or of the interests in UCDP meets certain financial and reputation tests. In addition, Universal’s Islands of Adventure must either continue to be managed by NBCU or continue to be operated under a license from NBCU that enables NBCU to maintain the quality and reputation of Universal’s Islands of Adventure (the “NBCU License Agreement”). Our partnership agreement has been amended to provide that NBCU will execute the NBCU License Agreement with us, on the same financial terms as set forth in our existing partnership agreement and the Universal License Agreement, if, following such sale or change in control, we will no longer be managed by NBCU. In the event that, following such sale or change in control, in accordance with the WB Agreement, the name of the Universal’s Islands of Adventure theme park no longer contains the word “Universal” or “Universal’s”, then the Harry Potter, Jurassic Park, Seuss Landing and Marvel Super Hero Island and other themed areas of Universal’s Islands of Adventure need to be operated under the NBCU License Agreement, or the name of the theme park and resort must include the name of another major recognized theme park operator, major established motion picture and television studio or another name approved by WB. In the event of termination by WB due to our default, a sale of Universal’s Islands of Adventure or a change of control of UCDP for which the foregoing requirements are not satisfied, payments due with respect to the remaining term of the agreement will be accelerated and due immediately.

Competition

The Orlando theme park market is extremely competitive, with the highest concentration of theme parks per square mile in the world. There are currently seven major theme parks in Orlando. The Walt Disney Company owns four of these: Disney’s Magic Kingdom^®, Epcot^®, Disney’s Hollywood Studios^TM and Disney’s Animal Kingdom^®. The Magic Kingdom, Disney’s original Orlando theme park, targets families with young children and benefits from strong brand recognition of their flagship icon, Mickey Mouse. Epcot is a tour through the countries of the world, Disney’s Hollywood Studios^TM is a movie-based theme park and Disney’s Animal Kingdom is an animal based theme park featuring both live and imaginary animal attractions. In addition, Anheuser Busch has a local Sea World^® park, and on March 1, 2007 opened its Aquatica^® water park. Due partly to its longer operating history within the theme park industry, Disney has the highest level of unaided awareness in the theme park industry and commands the majority market share.

The Orlando theme parks compete with other theme parks around the country as well as other forms of entertainment and recreation around the world. These include sports and outdoor activities and other vacation travel (cruises, beaches, etc.). Other principal competitive factors of a theme park include location, price, uniqueness and quality of the rides and attractions, entertainment value, general atmosphere and cleanliness.

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Guests to our theme parks

Guests to our theme parks can be divided into three distinct points of origin: U.S. visitors from outside of Florida, international visitors and Florida residents. As measured internally through guest surveys, we believe our largest market is U.S. visitors from outside of Florida, representing approximately 42% of our admissions in 2007. We have actively pursued this market by employing media campaigns (such as our “A Vacation From the Ordinary” television commercials), partnering with travel agencies and enhancing our Internet marketing with the goal of increasing advance multi-day pass sales. In 2007, based on our survey data, we believe approximately 30% of our admissions were international visitors, approximately 50% of whom came from the United Kingdom. We encourage these international guests to buy multi-day passes in advance of traveling, by using a number of incentives, such as extended length of stay tickets and coupons for food and merchandise. We also partner with a number of major tour operators, particularly in the United Kingdom. In 2007, based on our survey data, we believe approximately 28% of our admissions were Florida residents. We have a series of special events to attract Florida residents to our theme parks during the non-peak seasons. Examples of these events include “Halloween Horror Nights^®”, “Mardi Gras”, “Grinchmas^TM” and the “Macy’s Holiday Parade”. To capitalize on the strength of these events, we have introduced annual pass programs in a further effort to maximize attendance from the Florida market. The following table summarizes our paid attendance by point of origin during our last three fiscal years ended December 31, (in millions):

	2007	2006	2005
Outer U.S.	4.5	4.5	4.7
International	3.2	3.2	3.6
Florida	3.1	2.7	2.5

Source: Internal guest surveys

Marketing and sales

In order to increase the number of visitors to our theme parks, we utilize various sales and marketing channels, including Internet sales channels, our subsidiary travel company (Universal Parks & Resorts Vacations), sales to timeshare operators, the establishment of joint marketing partnerships and other niche channels such as group sales. In addition, we also benefit from significant marketing spending by corporate sponsors on our behalf. Our sales and marketing expense for 2007 was $78.8 million. Our marketing activities are heavily weighted toward the key vacation planning period of February to May.

Internet sales

As measured internally through on-line surveys, approximately 63% of our theme park guests use the Internet to gather information about us, and Internet sales account for approximately 22% of our 2007 theme park pass revenue. We have increased our focus on improving and advancing our on-line presence and e-commerce capabilities by making graphical, copy and navigational modifications to strengthen brand linkage and increase ticket conversions to our online ticket store. Our online strategy also includes search engine optimization to enhance our message online while tying into our offline marketing and sales campaigns in order to increase brand recognition.

Universal Parks & Resorts Vacations

Our subsidiary, Universal Parks & Resorts Vacations, serves as our own wholesale and consumer direct travel company and accounted for approximately 6% of our 2007 theme park pass revenue. Universal Parks & Resorts Vacations primarily sells travel packages directly to consumers and through travel industry sales. This includes organizing vacation packages, including theme park passes to Universal Studios Florida and Universal’s Islands of Adventure, reservations for hotel accommodations and rental car transportation. In addition, Universal Parks & Resorts Vacations operates its own travel website, and guest service desks at approximately 31 locations, primarily at key hotels in Orlando.

Timeshare operators and other distribution channels

A significant portion of our pass revenue is generated through our relationships with timeshare operators in the Orlando area. Many timeshare operators purchase passes from us at a discounted price in order to offer those passes to consumers as a reward for taking a tour of their timeshare properties. We also sell discounted passes to timeshare operators for sale to visitors of their timeshare properties. Pass sales from the timeshare sales channel constituted approximately 11% of our 2007 theme park pass revenue. A majority of these passes are sold by a small group of major timeshare operators in the Orlando area. In addition, we have several other primary distribution channels, including AAA, which has approximately 60 distribution locations that we use across North America and accounted for approximately 4% of 2007 theme park pass revenue, hotel guest service desks which accounted for approximately 3% of 2007 theme park pass revenue and other key domestic and international travel operators. A dispute with one of our key distribution channels could adversely affect our business.

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Corporate sponsorships

We enter into sponsorship agreements and benefit from sponsorship agreements entered into by Vivendi Universal Entertainment and NBC Universal and their affiliates with national and international companies that provide us with significant marketing exposure but do not require significant cash expenditure on our part. The following is a brief summary of some of the major sponsorship agreements that benefit our business.

The Coca-Cola Company

The Coca-Cola Company has been granted certain designations, such as, the “Official Soft Drink, Fruit Juice and Sports Drinks of Universal Studios Florida, Universal’s Islands of Adventure and CityWalk,” and has been given exclusive marketing, advertising and associational rights in the soft drink, sports drink and juice categories with respect to Universal Studios Florida, Universal’s Islands of Adventure and CityWalk and has exclusive product availability with respect to soft drinks, juices and sports drinks sold at Universal Studios Florida, Universal’s Islands of Adventure and those portions of CityWalk wholly owned or controlled by us or our affiliates. In return, Coca-Cola pays annual sponsorship fees and established a marketing fund for joint promotional activities benefiting us as well as certain other affiliates of Universal Parks & Resorts. This sponsorship agreement continues through December 31, 2012.

MasterCard

MasterCard had been granted exclusive marketing and advertising rights as the “Official Credit Card” of our theme parks and certain other Universal properties owned by our affiliates. In return, MasterCard paid annual sponsorship fees and committed to certain minimum marketing and promotional expenditures benefiting us as well as certain other affiliates of Vivendi Universal Entertainment. This sponsorship agreement expired December 31, 2007.

JPMorgan Chase Bank

JPMorgan Chase Bank had been granted the right to market itself as the “Official Bank” or the “Official Bank Sponsor” of, and to install and operate ATM machines at, Universal Studios Florida, Universal’s Islands of Adventure and CityWalk and certain other Universal properties owned by our affiliates. JPMorgan Chase Bank was also designated as the sponsor of the Twister... Ride it Out^® attraction at Universal Studios Florida and the Jurassic Park River Adventure^® attraction at Universal’s Islands of Adventure and was given exclusive marketing, advertising and associational rights in the retail banking products and services categories with respect to our theme parks, CityWalk and certain other Universal properties owned by affiliates. In return, JPMorgan Chase Bank paid annual sponsorship and ATM fees and committed to certain minimum marketing and promotional expenditures benefiting us as well as certain other Universal affiliates. While the original sponsorship agreement expired November 27, 2007, the agreement had been extended with respect to the ATM machines only through December 31, 2007. In addition to this sponsorship agreement, JPMorgan Chase Bank had entered into a domestic marketing alliance agreement with Vivendi Universal Entertainment and other Universal affiliates to create a co-branded credit card. We shared revenue from card acquisition and card usage and participated in joint advertising and marketing programs. This alliance expired December 31, 2007.

GE Money Bank

Effective January 1, 2008, GE Money Bank succeeded JP Morgan Chase with the right to market itself as the “Official Financial Services Provider” or the “Official Financial Services Sponsor” of, and to install and operate ATM machines at, Universal Studios Florida, Universal’s Islands of Adventure and CityWalk and certain other Universal properties owned by our affiliates. Commencing January 1, 2008, GE Money Bank is the sponsor of the TWISTER... Ride it Out^® attraction at Universal Studios Florida and the Jurassic Park River Adventure^® attraction at Universal’s Islands of Adventure and has exclusive marketing, advertising and associational rights in the retail banking and financial services categories with respect to our theme parks, CityWalk and certain other Universal properties owned by affiliates. In return, GE Money Bank pays annual sponsorship and ATM fees and has committed to participate in mutually agreed upon marketing and promotional programs requiring expenditures by us and other Universal affiliates for our collective benefit. In addition to this sponsorship agreement, GE Money Bank has entered into a co-branded credit card program agreement with Vivendi Universal Entertainment and other Universal affiliates to create a co-branded credit card which was launched on March 10, 2008. We share revenue from card acquisition and card usage and participate in joint advertising and marketing programs. This agreement will continue through December 31, 2014.

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American Express

American Express has joined our family of sponsors and has been granted exclusive marketing and promotional rights as the “Official Payment Services Products Provider” of our theme parks, certain other Universal theme park properties and certain other entities owned by our affiliates. In return, American Express pays annual sponsorship and benefits fees and has committed to mutually agreed marketing and promotional programs benefiting us as well as our affiliates.

Nestle Waters

Nestle Waters has been granted the right to market itself as the “Official Bottled Water” of Universal Studios Florida, Universal’s Islands of Adventure and CityWalk, and has been designated as a sponsor of Shrek 4-D™, and has exclusive product availability with respect to bottled water at Universal Studios Florida, Universal’s Islands of Adventure and those portions of CityWalk wholly owned or controlled by us or our affiliates. Nestle Waters pays annual sponsorship fees and has committed to minimum marketing and promotional expenditures benefiting us as well as certain other affiliates of Universal Parks & Resorts. The sponsorship agreement continues through December 31, 2012.

Volkswagen

Volkswagen has been granted the right to market itself as the “Official Car/SUV/Vehicle” of Universal Studios, designated as a sponsor of Revenge of the Mummy^SM, and incorporated into the signage at attraction entrance sights, car displays and on theme park brochures at Universal Studios Florida, Universal’s Islands of Adventure and those portions of CityWalk wholly owned or controlled by us or our affiliates. Volkswagen pays annual sponsorship fees and has committed to minimum marketing and promotional expenditures benefiting us as well as certain other affiliates of NBC Universal. The sponsorship agreement continues through May 31, 2008, and is not expected to be extended.

Seasonality

Our business is seasonal. Though the weather in Orlando allows us to admit customers on almost every day of the year, our attendance follows a seasonal pattern which coincides closely with holiday and school schedules. We address this seasonality by attempting to attract business during non-peak times and by reducing variable expenses during non-peak times.

We attempt to increase attendance during traditionally slow months in a number of ways. For instance, we try to increase attendance by local customers by coordinating special events. Halloween Horror Nights^® in October covers approximately 23 nights and significantly increases our local attendance. In another effort to boost local attendance and mitigate the effects of seasonality, we host our Mardi Gras special event every Saturday from early February to early April. Other initiatives include renting the parks to corporate customers for after-hour events, providing discount ticket offers to Florida residents and packaging hotel-inclusive special deals to attract customers who do not live in the Orlando area but are close enough to drive.

The Atlantic Ocean hurricane season begins in June and ends in November of each year. Historically, hurricanes have had little impact on Orlando theme parks. From 1991 to 2003, our parks had been closed only once due to the inclement weather caused by hurricanes. However during 2004 and 2005, we closed our parks on four days as a result of hurricanes, but experienced no closures during 2006 or 2007.

We also attempt to reduce variable expenses by making a number of operational adjustments during non-peak periods. For example, we reduce our operating hours based on anticipated attendance, opening at 9 a.m. and closing as early as 6 p.m. Also, attractions, shows, restaurants and stores are operated at reduced capacity.

We also carefully tailor our staffing levels. For example, we only hire enough full-time employees to provide a full schedule during our non-peak periods. Increased labor requirements are handled through casual and seasonal employees, overtime and other approaches, such as having our full-time employees who do not normally work in the park, including our maintenance and support staff, fulfill shifts in the parks during peak times, or hiring employees from retirement communities. We also minimize our labor requirements by categorizing days, for purposes of staffing, based on estimated attendance at our theme parks. For each potential operating hour combination we have low, medium and high attendance levels, and we develop staffing grids to meet the capacity requirements of each particular situation.

Capital improvements

We make annual investments both to provide ongoing capital support for our existing park attractions and infrastructure, and also to fund the development of new park attractions and infrastructure. We believe these investments are critical in maintaining our position of having technologically advanced theme parks and to effectively compete with our competitors. These costs can vary from one year to the next, depending on the timing of the construction cycles. During 2007 and 2006, we spent $95.4 million and $41.4 million, respectively on capital expenditures, including intellectual property rights, and estimate our 2008 expenditures to be approximately $150.0 million. Our capital expenditures in excess of the amount permitted by the capital covenant in our senior secured credit agreement will be funded through partner equity contributions. A large portion of our estimated 2008 capital expenditures relate to the

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design and construction of our upcoming Simpsons™ attraction and Harry Potter™ island, which we anticipate opening during the spring of 2008 and by the summer of 2010, respectively. Additionally, we recently announced that we will construct a new roller coaster ride that will open in 2009. We estimate our total capital investment in these attractions will range from $275.0 million to $310.0 million. This includes all capital expenditures to build these attractions. This also takes into account the net present value of all license fee payments, including license fee payments to Warner Bros. Consumer Products Inc. that would become payable during the renewal option periods, but does not include merchandise royalties.

In order to ensure the creative content of the licensed movies and television shows is successfully translated into our newly developed rides and attractions, a worldwide creative team from Universal Parks & Resorts, Universal Creative, provides design and oversight for all new capital initiatives in our theme parks. For our rides and attractions that are also developed for other Universal theme parks, research and development costs are allocated pro rata among the various Universal theme parks that are building the same ride or attraction.

Maintenance and inspection

We maintain and develop our rides in accordance with standards developed by ASTM International for the design, manufacture, testing, operation, maintenance and inspection of amusement rides and devices. ASTM International is a not-for-profit organization that provides a global forum for the development and publication of voluntary consensus standards for design, materials, products, systems and services that are widely accepted within our industry. We use a computerized maintenance management system to manage our maintenance program, which includes daily, weekly, monthly and yearly inspections and extensive preventative maintenance.

Our in-house inspectors are certified by the National Association of Amusement Ride Safety Officials. Our in-house inspectors conduct regular inspections and file annual inspection affidavits with the State of Florida Department of Agriculture and Consumer Services, or the “FDA.” We have a memorandum of understanding with the FDA pursuant to which our inspection and maintenance personnel conduct an annual consultation at our theme parks with FDA officials and representatives from other major Florida theme parks. During those site visits, our in-house inspectors consult with the FDA on our ride safety programs and conduct an educational seminar for the FDA inspectors on recent developments in amusement ride technology and safety. We also report certain ride injuries to the FDA pursuant to the memorandum of understanding.

Federal legislation has been proposed to grant the federal Consumer Products Safety Commission jurisdiction to regulate fixed amusement park rides and attractions. Although the timing and specific language of any enacted legislation is uncertain, such regulation could result in increased costs for compliance and increased costs and delays in the event of an incident investigation.

Park operations

Although our theme parks are open almost every day of the year, we adjust our hours of operation, as well as our staffing levels, based on expected attendance. The management of the day-to-day operation of our theme parks by our management team is overseen by UCDP’s manager, Vivendi Universal Entertainment, pursuant to the terms of UCDP’s partnership agreement.

Principal Products

Pass sales

In connection with our strategy to maximize incremental revenue and profit opportunities, we regularly review our pass price levels and mix of pass category sales to capitalize on opportunities to implement selective price adjustments. We currently offer a number of pass options to our theme park guests. We offer two types of one-day passes. The first one-day pass entitles the guest to visit either Universal Studios Florida or Universal’s Islands of Adventure for an entire day. The second type of one-day pass entitles the guest to visit both Universal Studios Florida and Universal’s Islands of Adventure for an entire day. We currently offer at the front gate a two-day pass which entitles the guest to visit both of our theme parks freely for any two calendar days within a consecutive 7-day period. Through our online store we offer a 2-Park Unlimited Admission Ticket which allows the guest to visit both of our theme parks freely for seven consecutive calendar days. We offer two Orlando FlexTicket products. Until March 1, 2008, the 4-park Orlando FlexTicket entitled a guest to visit both of our theme parks as well as Wet ‘n Wild^® and Sea World^® Orlando over a two week period. There was also a five-park Orlando FlexTicket which included admission to Busch Gardens^® Tampa Bay in addition to the four parks listed previously. With the opening on March 1, 2008 of Aquatica, SeaWorld^® Orlando’s new water park, the 4-park Orlando FlexTicket and 5-park Orlando FlexTicket were replaced with the Orlando FlexTicket and Orlando FlexTicket Plus, respectively, which are a 5-park and 6-park admission ticket, respectively. We also have three annual pass options. The first annual pass option (Preferred Pass) entitles a guest to unlimited visits to both of our theme parks for a full year with no restrictions and includes free parking. The second annual pass option (Power Pass) is similar, but includes blackout dates and does not include free parking. The third annual pass option (Premier Pass) entitles a guest to unlimited visits to both of our theme parks for a full year with no restrictions and includes free parking and additional benefits not provided to the other two pass options. We offer our Flexpay option to annual pass holders only, which allows them to pay equal monthly installments on their credit card.

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The table below sets forth certain information relating to our pass sales in 2007 (visitors, attendance and revenue in millions):

Type of pass	Total number of unique visitors	Attendance per visitor		Average attendance	Price (1)			Revenue (1)		% of revenue
One-day	3.9	1.00		3.9	$	56.61		$	218.45	48	%
Two-day	0.6	1.95		1.2		81.65			50.19	11	%
Seven-day online bonus	1.2	2.52		3.2		84.25			105.23	24	%
Orlando FlexTicket	0.4	2.26		0.9		94.99			35.68	8	%
Annual pass	0.3	4.61		1.4		122.84			36.00	8	%
Other	0.1	2.33		0.2		78.88			5.29	1	%
Total	6.5	1.63	(2)	10.8	$	69.81	(2)	$	450.84	100	%

(1) Net of discounts and commissions.

(2) Reflects weighted average.

Sales from our passes were $420.7 million and $436.0 million during 2006 and 2005, respectively.

Merchandise, food and beverage sales

In addition to our pass sales, we derive revenue from the sale of theme park merchandise, food and beverage. Revenues from these products during the past three years are set forth in the table below (in millions):

	Fiscal year ended December 31,
	2007		2006		2005
Theme park food and beverage	$	115.2	$	108.6	$	105.2
Theme park merchandise	$	101.6	$	91.4	$	87.7

Employees

As of December 31, 2007, we had approximately 13,850 employees on our payroll of whom approximately 12,740 were hourly employees and approximately 1,110 were salaried employees. Certain of our executive officers are employed and compensated by Vivendi Universal Entertainment, but they work for us in operating Universal Orlando. We reimburse Vivendi Universal Entertainment or its affiliates for the value of any compensation paid to such employees allocated to us by an affiliate of Vivendi Universal Entertainment. We currently have no employees that are represented by a union. We consider relations with our employees to be satisfactory.

Environmental and other regulations

We are subject to various federal, state and local environmental laws and regulations, including those governing water discharges, air emissions, soil and groundwater contamination, the installation and operation of underground and above ground storage tanks, and the disposal of waste and hazardous materials. In the event of any violations of or liabilities under any of these environmental laws or instances of noncompliance with environmental permits required at our facilities, we could incur substantial costs, including cleanup costs, fines and civil or criminal penalties. Currently, we do not expect the costs of these environmental requirements to have a material impact on our business, results of operations or financial condition.

Geographic Financial Summary

We operate exclusively in the theme park industry. Substantially all revenues were the result of sales directly related to our theme parks, which are located in Orlando, Florida. Accordingly, all revenues and long-lived assets were earned and reside in the United States. For additional information about our revenues and long-lived assets please refer to our financial statements and notes thereto set forth in “Part II, Item 8. Financial Statements and Supplementary Data” of this report.

Available Information

We routinely file reports, as required, with the Securities and Exchange Commission (the “SEC”), including but not limited to Forms 10-Q, Forms 10-K and Forms 8-K (and amendments thereto). The public may read and copy any materials filed by us with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549 and may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

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Item 1A. Risk Factors

You should carefully consider the risks described below, together with the other information contained in this report. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially affect our business operations. If any of the events described in the risk factors below actually occurs, our business, financial condition, operating results, cash flows and prospects could be materially and adversely affected, which in turn could adversely affect our ability to operate. In such case, you may lose all or part of your original investment.

RISKS RELATED TO OUR INDEBTEDNESS

We may not be able to refinance or repay in full the April 2010 notes and Holdings may not be able to refinance or repay in full the May 2010 notes by 2010 when they all mature and if we are or Holdings is, as the case may be, unable to refinance or repay in full the April 2010 notes prior to December 1, 2009, or the May 2010 notes prior to January 1, 2010 then our amended and restated senior secured credit agreement will also become due and payable and we may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful.

The April 2010 notes mature on April 1, 2010. The May 2010 notes will mature on May 1, 2010. In addition, if we are unable to refinance or repay in full the April 2010 notes prior to December 1, 2009, or Holdings is unable to refinance or repay in full the May 2010 notes prior to January 1, 2010, then our amended and restated senior secured credit agreement will also become due and payable in full on those dates, respectively.

We cannot assure you that we will be able to refinance the amended and restated senior secured credit agreement in the timeframe anticipated, on commercially reasonable terms or at all. In addition, we cannot make assurances that we will be able to repay in full or refinance our April 2010 notes on commercially reasonable terms, or at all or that Holdings will be able to repay in full or refinance the May 2010 notes on commercially reasonable terms or at all. See “Item 7. Management’s discussion and analysis of financial condition and results of operations—Liquidity and capital resources”. If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional equity contributions or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances. These alternative measures may not be successful and may not permit us to meet scheduled debt service obligations. We could face substantial liquidity problems and might be required to sell material assets or operations in an attempt to meet our debt service and other obligations. Any of the foregoing could prevent us from paying principal, premium, if any, and interest on the April 2010 notes and substantially decrease the market value of the notes.

Our ability to refinance our debt obligations could be adversely impacted by the Consultant’s right, starting in June 2010, to terminate the periodic payments under the Consulting Agreement and receive instead one payment equal to the fair market value of the Consultant’s interest in the Orlando parks and any comparable projects.

We have an agreement (the “Consulting Agreement”) with a consultant, (the “Consultant,” as defined in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations”) under which we pay a fee for consulting services and exclusivity equal to a percentage of our gross revenues from the attractions and certain other facilities owned or operated, in whole or in part, by us. Under the terms of the Consulting Agreement, the Consultant is also entitled to a fee based on a percentage of gross revenues of comparable projects, which are gated motion picture and television themed attractions owned or operated, in whole or in part, by us, or any of our partners or any of their affiliates, other than in Universal City, California. At present, the only theme park that is a comparable project is Universal Studios Japan in Osaka, Japan. It is possible that comparable projects will be created in the future that would fall under the Consulting Agreement. We represented under the agreement that the Consultant’s interest in each of our parks and in any comparable projects will have priority over the interests of all financiers, lenders and others who may have an interest in that park or project. Under the terms of the May 2010 notes, the April 2010 notes, and our senior secured credit agreement, a lien to secure our obligations under the Consultant agreement would be a permitted lien. The existence of this permitted lien may make refinancing more difficult. For the fiscal year ended December 31, 2007 and December 31, 2006, we paid $19,577,000 and $18,108,000 respectively to the Consultant under this arrangement. The Consultant may also be entitled to participate in certain sales of equity by our partners and to participate in certain real estate development activities of our partners or their affiliates.

Although the agreement has no expiration date, starting in June 2010, the Consultant has the right, upon 90 days notice, to terminate the periodic payments under the Consulting Agreement and receive instead one cash payment equal to the fair market value of the Consultant’s interest in the revenue streams in the Orlando parks and any comparable projects, which fair market value could be significant. If the Consultant exercises the option and the parties cannot agree on the fair market value of the buyout option, the fair market value will be determined by binding appraisal. Due to uncertainties in the amount and timing of such cash payment and our ability to make such a cash payment, our ability to refinance our senior secured credit agreement, the April 2010 notes and the May 2010 notes, and our ability to incur future indebtedness could be adversely impacted by this right of the Consultant (see “Item 13. Certain relationships and related party transactions—Consultant agreement”).

We may not have the ability to raise the funds necessary to finance any change of control offer required by the indenture governing our April 2010 notes.

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Pursuant to the indenture governing the April 2010 notes, we may need to refinance large amounts of our debt, including our April 2010 notes and borrowings under the senior secured credit agreement, upon the incurrence of specific kinds of change of control events. The indenture defines a change of control as either (1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of our assets and the assets of our subsidiaries, taken as a whole (other than to Blackstone, Vivendi Universal Entertainment or an entity with at least 75% of its capital stock owned collectively by Blackstone or Vivendi Universal Entertainment, which is referred to as a “Permitted Holder”), or (2) when the issuers of our April 2010 notes become aware of an acquisition of more than 50% of the total voting power or economic interests in us by someone other than a Permitted Holder. If a change of control occurs, we must offer to purchase all of the April 2010 notes then outstanding for a price equal to 101% of the principal amount of the notes, plus any accrued and unpaid interest. We cannot assure you that there will be sufficient funds available for us to make any required repurchases of our April 2010 notes upon a change of control. In addition, our senior secured credit agreement may prohibit us from repurchasing the April 2010 notes until we first repay outstanding indebtedness under our senior secured credit agreement in full. If we fail to repurchase our notes in that circumstance, we will go into default under the indenture governing our April 2010 notes and under our senior secured credit agreement. Any future debt that we incur may also contain restrictions on repayment upon change of control. If any change of control occurs, we cannot assure you that we will have sufficient funds to satisfy all of our debt obligations.

Our partners may not have the ability to raise the funds necessary to finance any change of control offer required by the indenture governing the May 2010 notes.

Pursuant to the indenture governing the May 2010 notes, Holdings must offer to purchase all of the May 2010 notes then outstanding for a price equal to 101% of the principal amount of the notes, plus any accrued and unpaid interest, upon the occurrence of specific kinds of change of control events. The indenture governing the May 2010 notes defines a change of control as either (1) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of Holdings assets and our assets, taken as a whole, other than to a Permitted Holder, (2) when Holdings becomes aware of an acquisition of more than 50% of the total voting power or economic interests in Holdings and Finance (the collective issuers of the May 2010 notes), taken together, by someone other than a Permitted Holder, or (3) Holdings ceases to own 100% of our outstanding capital stock. We cannot assure you that there will be sufficient funds available for Holdings to make any required repurchase of the May 2010 notes upon a change of control. Given the restrictions in our debt (in particular, our senior secured credit agreement and the April 2010 notes), we currently anticipate that, in order for Holdings to pay the principal amount at maturity of the May 2010 notes or to repurchase the notes upon a change of control as defined in the indenture governing the May 2010 notes, Holdings would be required to adopt one or more alternatives, such as refinancing all of our indebtedness, selling its equity securities or the equity securities or assets in us or seeking capital contributions or loans from Holdings’ affiliates. None of Holdings’ affiliates is required to make any capital contributions, loans or other payments to Holdings with respect to its obligations on the May 2010 notes. We cannot assure you that any of the foregoing actions could be effected on satisfactory terms, if at all, or that any of the foregoing actions would enable Holdings to refinance its indebtedness or pay the principal amount of the May 2010 notes or that any such actions would be permitted by the terms of the indenture governing the notes or any of Holdings’ other debt instruments or our debt instruments then in effect. Any future debt that Holdings incurs may also contain restrictions on repayment upon change of control. If any change of control occurs, we cannot assure you that Holdings will have sufficient funds to satisfy all of its debt obligations.

Our debt agreements contain restrictions that limit our flexibility in operating the business.

Our senior secured credit agreement and the indenture under which our April 2010 notes are issued (see note 5 to our consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data”) contain a number of significant covenants that, among other things, restrict our ability to:

• incur additional indebtedness;

• create liens on its assets;

• to issue dividends;

• engage in mergers or acquisitions; and

• make investments.

These restrictive covenants may not allow us the flexibility needed to operate the business in an effective and efficient manner and may prevent us from taking advantage of strategic opportunities that would benefit the business.

In addition, we are required under our senior secured credit agreement to satisfy specified financial ratios and tests. Our ability to comply with those financial ratios and tests may be affected by events beyond our control, and we may not be able to meet those ratios and tests. A breach of any of those covenants could result in a default under our senior secured credit agreement and the lenders could elect to declare all amounts borrowed under the senior secured credit agreement, together with accrued interest, to be immediately due and payable and could proceed against the collateral securing that indebtedness. Substantially all of our assets are pledged as collateral pursuant to the terms of our senior secured credit agreement. If any of our indebtedness were to be accelerated, our consolidated assets may not be sufficient to repay in full that indebtedness.

We may not be able to generate sufficient cash to service all of our indebtedness for reasons beyond our control.

Our ability to generate cash depends on many factors beyond our control. Our ability to make scheduled payments or to refinance our indebtedness, including the April 2010 notes, depends on our ability to generate cash from operations in the future. This is subject, in part, to general economic, financial, competitive, legislative, regulatory, social, political and other factors that are beyond our control. In addition, Blackstone and Vivendi Universal Entertainment may have interests adverse to parties with which we would like to enter into sponsorship relationships, and thus certain sponsorship relationships may be unavailable to us. Additionally, because our sponsorship relationships change over time, the sponsorship relationships that we may have in the future may not benefit our business to the extent they do currently by providing marketing exposure for us.

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our senior secured credit agreement, or otherwise, in an amount sufficient to enable us to fund planned capital expenditures, pay our indebtedness, including the April 2010 notes, or to fund our other liquidity needs.

Federal and state statutes allow courts, under specific circumstances, to void the notes, subordinate claims in respect of the notes and require note holders to return payments received from us.

The issuance of the April 2010 notes may be subject to review under state and federal laws if a bankruptcy, liquidation or reorganization case or a lawsuit, including in circumstances in which bankruptcy is not involved, were commenced at some future date by, or on behalf of, our unpaid creditors. Under the federal bankruptcy laws and comparable provisions of state fraudulent transfer laws, a court may void or otherwise decline to enforce the notes or subordinate the notes to our existing and future indebtedness. While the relevant laws may vary from state to state, a court might do so if it found that when we issued the notes or, in some states, when payments became due under the notes, we received less than reasonably equivalent value or fair consideration and either:

• were insolvent or rendered insolvent by reason of such incurrence; or

• were engaged in a business or transaction for which our remaining assets constituted unreasonably small capital; or

• intended to incur, or believed that we would incur, debts beyond our ability to pay such debts as they mature.

The court might also void the notes, without regard to the above factors, if the court found that we issued the notes with actual intent to hinder, delay or defraud our creditors. In addition, any payment by us pursuant to the notes could be voided and required to be returned to us or to a fund for the benefit of our creditors.

A court would likely find that we did not receive reasonably equivalent value or fair consideration for the notes if they did not substantially benefit directly or indirectly from the issuance of the notes. If a court were to void the notes, you would no longer have a claim against us. Sufficient funds to repay the notes may not be available from other sources. In addition, the court might direct you to repay any amounts that you already received from us.

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, we would be considered insolvent if:

• the sum of our debts, including contingent liabilities, was greater than the fair saleable value of our assets; or

• if the present fair saleable value of our assets were less than the amount that would be required to pay our probable liability on our existing debts, including contingent liabilities, as they become absolute and mature; or

• we could not pay our debts as they become due.

To the extent a court voids the notes as fraudulent transfers or holds the notes unenforceable for any other reason, holders of notes would cease to have any direct claim against us. If a court were to take this action, our assets would be applied first to satisfy our liabilities, if any, before any portion of our assets could be applied to the payment of notes.

Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the April 2010 notes. In addition, we are highly leveraged and have substantial debt service obligations.

As of December 31, 2007, the April 2010 notes were effectively subordinated $509.0 million of secured indebtedness under our amended and restated senior secured credit facilities and $211.9 million of payables and other liabilities. An additional $100.0 million is available for future borrowings under the revolving portion of the amended and restated senior secured credit facilities and, in addition, we may borrow up to $200.0 million of uncommitted incremental term loans from time to time, all of which would be secured and effectively senior to our noteholders. As a result, we are highly leveraged. This level of indebtedness could have important consequences to you, including the following:

• it may limit our ability to borrow money for working capital, capital expenditures, acquisitions, debt service requirements and general corporate or other purposes;

• it may limit our flexibility in planning for, or reacting to, changes in our business and future business opportunities;

• we may be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;

• it may make us more vulnerable than less leveraged companies to a downturn in our business or the economy;

• the debt service requirements of our indebtedness could make it more difficult to generate cash;

• a substantial portion of our cash flow from operations will be dedicated to the repayment of our indebtedness, including indebtedness we may incur in the future, and will not be available for other purposes; and

• there would be a material adverse effect on our business and financial condition if we were unable to service our indebtedness or obtain additional financing, as needed.

Our substantial debt could have other important consequences to you. For example, our failure to comply with the restrictive covenants in the indenture governing the April 2010 notes, which limit our ability to incur debt and sell assets, could result in an event of default that, if not cured or waived, could harm our business or prospects and could result in our bankruptcy.

Despite our substantial indebtedness, we may still incur significantly more debt. This could exacerbate the risks described above.

The terms of the indenture governing the April 2010 notes and the senior secured credit agreement permit us to incur significant additional indebtedness in the future. As of December 31, 2007, we had $100.0 million available for additional borrowing under the revolving credit portion of the senior secured credit facilities. In addition, we may borrow up to $200.0 million of uncommitted incremental term loans from time to time. All of those borrowings are effectively senior to the April 2010 notes. If new debt is added to our current debt levels, this will increase the risks described above. Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under the April 2010 notes.

RISKS RELATED TO OUR BUSINESS

Attendance at our theme parks is influenced by general economic and other conditions.

Attendance at our theme parks is heavily dependent upon consumer spending on travel and other leisure activities. Because consumer spending on travel and other leisure activities is discretionary, this is usually the first type of spending to be curtailed by consumers during economic downturns. As a result, we have historically experienced weaker attendance during economic downturns and during other events affecting travel and leisure activities. Any substantial deterioration in general economic conditions, increases in the cost of travel, additional outbreaks or escalation of war, or terrorist or political events that diminish consumer spending and confidence could reduce attendance at our theme parks.

Our business is largely dependent on air travel.

We estimate that approximately half of the visitors to our theme parks travel to Orlando by air. An increase in the price of jet fuel may serve to increase the price of air travel and reduce demand. In addition, the recent economic difficulties facing the airline industry may result in a reduction in scheduled flights to Orlando and an increase in the price of air travel which in turn may have a negative effect on the number of visitors to Orlando. In addition, another terrorist attack in the United States or in one of our major international attendance markets or the mere threat of a terrorist attack is likely to result in a decline in air travel. A significant decline in visitors traveling to Orlando by air would negatively affect attendance at our theme parks, possibly dramatically.

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We are subject to the risks inherent in deriving substantially all of our revenue from one location.

Substantially all of our revenue is derived from the operation of our two theme parks and CityWalk in Orlando, Florida. This subjects us to a number of risks. Our business is and will continue to be influenced by local economic, financial and other conditions affecting the Orlando area. This may include prolonged or severe inclement weather in the Orlando area, a catastrophic event such as a hurricane or tornado, or the occurrence or threat of a terrorist attack in the Orlando area, any of which could significantly reduce attendance at our theme parks. In addition, the partial or total destruction of our theme parks requiring either of them to be closed for an extended period of time would have a material adverse effect on our ability to generate revenue.

The United States is currently engaged in military operations in Iraq and elsewhere, which could drive up the price of gas and air travel and increase the chance of another terrorist attack in the United States or key international markets, each of which would have a negative impact on attendance at our theme parks.

The United States and certain of its allies are currently engaged in military operations in Iraq. This military action could exacerbate the risks identified above and have a number of other consequences, many of which would likely have a negative impact on attendance at our theme parks and, as a result, our prospects. The military operations in Iraq could further increase the price of crude oil, which in turn would increase the price of gasoline and jet fuel. The price of gas has increased to as much as $3.36 per gallon in Florida in 2007. If gas prices remain at these high levels or increase substantially, it may cause significant numbers of domestic consumers to forego taking a vacation, which could negatively affect our attendance, as approximately 25% of our visitors drive more than 200 miles to our theme parks and approximately half of our visitors travel by air to our theme parks. The current military operations in Iraq may increase the likelihood of another major terrorist attack in the United States or one or more of our key international markets. The threat or occurrence of a terrorist attack could serve to discourage many consumers from travel or otherwise participating in leisure activities.

Loss of key distribution channels for pass sales may reduce our revenues.

Approximately 41% of our annual theme park pass sales are generated by third party distribution channels, the majority of which are concentrated among 40 third-party customers. As an example, approximately 11% of our annual theme park pass sales are derived from time-share operators, which are dominated by a few major operators in the Orlando area. Other significant distribution channels include AAA, which has approximately 60 distribution locations across North America that we use, guest service desk locations operated by Universal Parks & Resorts Vacations at approximately 31 stand-alone properties throughout Orlando and other key domestic and international travel operators. A dispute with or loss of any key distribution channel could have a negative effect on our pass sales.

The theme park industry competes with numerous vacation and entertainment alternatives; the Orlando theme park market is extremely competitive.

Our theme parks compete with other theme, water and amusement parks in Orlando and around the country and with other types of recreational facilities and forms of entertainment, including cruise ships, other vacation travel, major sports attractions and other major entertainment activities. Our business is also subject to factors that affect the recreation, vacation and leisure industries generally, such as general economic conditions, consumer confidence and changes in consumer spending habits.

The Orlando theme park market is extremely competitive. There are currently seven major theme parks in the Orlando area including our competitors: Walt Disney World’s Magic Kingdom^®, Epcot^®, Disney’s Hollywood Studios^TM, Disney’s Animal Kingdom^® and Anheuser Busch’s Sea World^®. Additionally, on March 1, 2008, Anheuser Busch opened its Aquatica^® water park. All of these theme parks are located within a 10-mile radius of our theme parks. Some of these theme parks, particularly those affiliated with The Walt Disney Company, enjoy better name recognition than our theme parks do. This puts us at a disadvantage in our attempts to attract guests to our theme parks over those of our competitors. Additionally, because our sponsorship relationships change over time, the sponsorship relationships that we may have in the future may not benefit our business to the extent they do currently by providing marketing exposure for us.

The close proximity to us of so many of our direct competitors has various other adverse consequences on our business. For example, we offer significant commissions to travel agents and wholesalers in order to provide them with an incentive to encourage their customers to purchase passes to our theme parks rather than those of our competitors in the Orlando area. Also, it has the effect of increasing competition for market share among the major competitors.

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There is the risk of accidents occurring at theme parks, which may create negative publicity which may reduce attendance and thereby negatively impact our results of operations.

Our theme parks feature “thrill rides.” There are inherent risks involved with these sorts of rides and attractions. An accident or an injury at our theme parks or at another theme park may result in negative publicity which could reduce attendance and thereby negatively impact our results of operations.

If we are unable to adequately protect the right to use the intellectual property of the themed elements of our rides and attractions, we may be required to re-theme certain rides and attractions, which will be expensive and time consuming. In addition, if there is an uncured event of default under certain of our intellectual property agreements and such agreements are terminated, we may suffer negative consequences such as acceleration of payments due thereunder.

The use of themed elements in our rides and attractions is dependent upon our obtaining and maintaining intellectual property licenses granting us the rights to use those elements. Failure to protect our existing intellectual property rights may result in the loss of those rights or require us to make significant additional payments to third parties for infringing their intellectual property rights. The loss of the right to use a particular themed element means that we would be unable to operate the rides or attractions that utilize the relevant element. This may require us to re-theme those rides or attractions which may involve taking the relevant ride or attraction out of service and may require significant capital expenditures. Any of those actions could negatively impact our results of operations, name recognition and growth prospects. In addition, if there was an event of default that we failed to cure under one of our intellectual property agreements and such agreement was terminated, we may become subject to accelerated payments. For example, in the event of termination of the WB Agreement due to our breach, or in certain cases following a sale of Universal’s Islands of Adventure or a change in control of the partnership interests in us, payments due with respect to the remaining term of the WB Agreement will be accelerated and due immediately. In addition, we license various elements based on the Simpsons^TM, including certain characters under the Fox Agreement from Twentieth Century Fox Licensing & Merchandising (“Fox”). The Fox Agreement would be terminable in the event of our breach, or in certain cases following a change of control to which Fox did not consent. If Fox were to terminate the Fox Agreement, payments due with respect to the remaining term of the Fox Agreement will continue to be due and payable as and when they would have become due and payable, except that if the breach is a result of a change of control, then 50% of such remaining payments allocated to us shall be due and payable as and when they would have become due and payable. See “Item 1: Business—Intellectual property.”

The loss of key personnel could hurt our operations.

Our success depends upon the continuing contributions of our executive officers and other key operating personnel. The complete or partial loss of their services could adversely affect our business. Two of our executive officers are employees of, and have employment agreements with, Vivendi Universal Entertainment. We cannot be certain that we will be able to retain their services or to find adequate replacements for them in the event we were to lose their services. If Vivendi Universal Entertainment were to cease acting as our manager, we could lose the services of those executive officers.

Our business is seasonal and bad weather can adversely impact attendance at our theme parks.

Our business is seasonal. Attendance at our theme parks follows a seasonal pattern which coincides closely with holiday and school schedules. Because many of the attractions at our theme parks are outdoors, attendance at our theme parks is adversely affected by bad weather. Prolonged bad or mixed weather conditions during our seasonal peak attendance periods may reduce attendance causing a more severe decline in revenues than if those conditions occurred during a low attendance period. In addition, temporary but severe weather conditions, such as a hurricane, can adversely impact attendance at our theme parks.

If our computer network security is compromised we could be subject to financial liability and our reputation could be harmed.

Despite the Company’s considerable efforts and technology to secure our computer network, security could be compromised, confidential information, such as customer credit card numbers, could be misappropriated, or system disruptions could occur. This could lead to adverse publicity, loss of sales and profits, or cause the Company to incur significant costs to reimburse third parties for damages which could impact profits.

RISKS RELATED TO OUR PARTNERS

Risks related to the right of first refusal agreement between our partners.

Pursuant to a right of first refusal provision in an amended and restated partners’ agreement between Blackstone and Vivendi Universal Entertainment (the “partners’ agreement”), at any time after December 31, 2007, if either Blackstone or Vivendi Universal Entertainment desires to sell its ownership interest in Holding I and Holding II, it shall make a binding offer, specifying the proposed

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sale price, to sell to the other its entire interest in each of Holding I and Holding II. The non-offering partner will then have 90 days after receipt of an offer to accept the offer to sell. If Blackstone exercises its rights under this provision by accepting a binding offer, it may result in 100% control and ownership of us being acquired by Blackstone, which could pose a number of risks to our business. This event could impact our continued use of the “Universal” name and certain intellectual property as discussed in Item 1A.Risk Factors, Risks related to use of the “Universal name and certain intellectual property. These same risks would be present if a third party unaffiliated with Vivendi Universal Entertainment were to acquire control of us. In addition, we face risks related to a change of control under certain of our business agreements. See “Risk Factors—Risks Related to our Partners.”

Risks related to use of the “Universal” name and certain intellectual property-Our continued use of the “Universal” name and our future access to new intellectual property from the Universal License Parties is dependent on there not being a change of control as defined under the Universal License Agreement. In addition, a change of control could have other negative consequences for us, including potential termination of the WB Agreement, acceleration of payments due under certain of our license agreements and the loss of significant benefits we enjoy from our relationship with certain of our affiliates. Accordingly, a change of control under our license agreements could impair our name recognition, growth prospects and negatively impact our results of operations.

We license the right to use the “Universal” name and a substantial number of intellectual properties as street entertainment characters and as themed elements in rides and attractions from the Universal License Parties. See “Item 1: Business—Intellectual property.” Our right to use the “Universal” name in connection with Universal Orlando continues indefinitely at no cost to us until the latest of (i) 30 months after a change of control (as described in our partnership agreement), (ii) 30 months after any termination of the WB Agreement prior to its scheduled expiration, or (iii) the expiration of the WB Agreement in accordance with its terms. Under the Universal License Agreement, a change of control is described as when (a) Universal CPM is no longer a wholly owned subsidiary of USI, Vivendi Universal Entertainment, or any of their respective affiliates, or (b) the Universal License Parties do not own any interest in us. A change of control under our license agreements, such as Blackstone or a third party unaffiliated with the Universal License Parties acquiring all of the partnership interests in us, would not necessarily constitute a change of control under the indentures governing the April 2010 notes and the May 2010 notes. If we are unable to use the “Universal” name, and if we are unable to partner with another similar, recognizable brand, the name recognition of our theme parks could be impaired.

Our right to use the creative and proprietary elements controlled by the Universal License Parties continues at no cost to us, subject to third party contractual limitations, until the later of the expiration or termination of the WB Agreement in accordance with its terms or, if sooner, the date that neither we nor a permitted successor or assign is a party to the WB Agreement, or the date such intellectual property rights would otherwise cease to be licensed to us. The Universal License Parties are required to continue to license those intellectual properties that are currently licensed to us for as long as we or our permitted successor or assign remains a party to the WB Agreement and such WB Agreement remains in effect, and we continue to operate our theme parks at a substantially similar standard, even if the Universal License Parties no longer have an ownership interest in us. However, in a situation where Blackstone or a third party unaffiliated with the Universal License Parties acquires all of the partnership interests in us, the Universal License Parties are not required to grant us a license to any new intellectual property rights that they may acquire in the future that may be or become useful or necessary for the operation of our theme parks. Our inability to acquire proprietary and creative elements for possible new attractions could impair the growth prospects of our theme parks. The Universal License Parties could also claim that our theme parks were not being operated to a sufficiently high standard after Blackstone or a third party unaffiliated with the Universal License Parties acquired all of the partnership interests in us, and revoke the license completely. If this were to occur, we may be unable to operate our theme parks for an extended period of time, and may not be able to continue operating our theme parks at all. In addition, the WB Agreement is terminable if the Universal License Parties fail to remain involved either as a 50% owner or through certain license arrangements, unless WB consents to the assignment or the entity to which Universal’s Islands of Adventure or our partnership interests are transferred meets other tests designed to ensure the financial capability of the buyer and to maintain the reputation of our theme parks. In the event of termination by WB due to our default or a sale of Universal’s Islands of Adventure or a change of control of the us for which the foregoing requirements are not satisfied, payments due with respect to the remaining term of the WB Agreement will be accelerated and due immediately.

We also rely on Vivendi Universal Entertainment and its affiliates for management oversight, advisory and other services. In its capacity as our manager, Vivendi Universal Entertainment provides creative services in relation to development of our rides and attractions. Most of our insurance is arranged by GE through global programs for its businesses via licensed insurers issuing enforceable policies. We have numerous other arrangements with affiliates of Vivendi Universal Entertainment and, indirectly, NBC Universal and GE, which provide us with significant benefits that may be reduced or lost completely if Blackstone or a third party unaffiliated with Vivendi Universal Entertainment gains control of us pursuant to the right of first refusal or otherwise. For a better understanding of these arrangements, see “Item 13: Certain relationships and related party transactions.” Although Vivendi Universal Entertainment is required by the terms of the partners’ agreement to provide us with the same level of services for a

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transitional twelve-month period if Blackstone were to acquire all of our partnership interests in us pursuant to the right of first refusal, there can be no guarantee that Vivendi Universal Entertainment and Blackstone will reach agreement regarding the provision of such services beyond this twelve-month period or that Blackstone will thereafter find a third party with the experience and expertise to provide comparable services to those provided by Vivendi Universal Entertainment and its affiliates. In addition, the costs of the services currently provided by Vivendi Universal Entertainment may be significantly more expensive if they were purchased from a third party.

A change of control in us could impair our continued use of the “Universal” name and our future access to new intellectual property rights, terminate or accelerate payments under the WB Agreement and reduce or increase the cost of the benefits we enjoy from our relationships with certain affiliates, thus negatively impacting our name recognition, our growth prospects and our results of operations. In addition, we face risks related to a change of control under certain of our business agreements. See “risk factors—risks related to our partners.”

If the equity holders of Holding I and Holding II that are controlled by Blackstone default on certain indebtedness, Blackstone’s equity interests in Holding I and Holding II will be subject to foreclosure.

Concurrently with the consummation of the 2004 Amendment (see note 5 to our consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data”), JPMorgan Chase Bank and another lender made loans to the equity holders of Holding I and Holding II that are controlled by Blackstone in the aggregate principal amount of $178.0 million and made commitments for additional loans of up to $52.0 million under a revolving credit facility. The obligations of the borrowers under the loans are secured by their equity interests in Holding I and Holding II and are guaranteed by NBC Universal on a deficiency basis, subject to the terms of the guarantee. The loans will mature in 2008. Blackstone and NBC Universal have agreed to cooperate to obtain refinancing of the loans, if not fully paid at that time, with credit enhancement provided by NBC Universal. It is anticipated that the only assets of the borrowers will be their equity interests in Holding I and Holding II. If the borrowers default on, or are unable to refinance the loans, the borrowers’ equity interests in Holding I and Holding II will be subject to foreclosure by the lenders. Any such foreclosure will not constitute a change in control for purposes of our senior secured credit facility or our April 2010 notes (see note 5 to our consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data”).

Potential deadlock between the partners of our general partner could prevent us from executing certain aspects of our business strategy.

Major decisions by Holding II regarding our business generally require the consent of both Blackstone and Vivendi Universal Entertainment who are representatives of Holding I and Holding II and members of UCDP’s Park Advisory Board. This creates a potential for deadlocks. Any deadlock could delay us from taking certain actions in the future which would be beneficial to the business and may prevent or delay us from executing certain aspects of its business strategy.

Blackstone and Vivendi Universal Entertainment control us and may have conflicts of interest with us or you in the future.

Their conflicts of interests may make unavailable to us certain sponsorship relationships that would provide us with significant marketing exposure. Blackstone and Vivendi Universal Entertainment, together, beneficially own 100% of our equity interests. As a result, Blackstone and Vivendi Universal Entertainment have control over our decisions to enter into any corporate transaction and will have the ability to prevent any transaction that requires the approval of equity holders regardless of whether or not noteholders believe that any such transactions are in their own best interests. For example, Blackstone and Vivendi Universal Entertainment could cause us to distribute our cash resources to them or make distributions to service the loan to the Blackstone entities guaranteed by NBC Universal rather than invest such resources in our business. In addition, Blackstone and Vivendi Universal Entertainment may have interests adverse to parties with which we would like to enter into sponsorship relationships, and thus certain sponsorship relationships may be unavailable to us.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

Universal Studios Florida, Universal’s Islands of Adventure, CityWalk, our film production studios, our guest parking structures, our employee parking lots, our executive offices and various administrative buildings as well as extensive landscaping and water systems, are located on 441 acres which we own in Orlando, Florida. In addition, we own approximately 137 acres on which the three themed hotels are located which are leased to UCF Hotel Venture under a long-term ground lease. During 2007, we sold approximately 2 acres for $3.1 million with a cost basis of $0.3 million. After the reduction of related expenses, we recorded a gain of approximately $2.8 million. During 2006, we sold approximately 4 acres for $6.4 million with a cost basis of $0.8 million. After the reduction of related expenses, we recorded a gain of approximately $5.2 million.

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We have approximately 104 acres of undeveloped land which has planning approval for additional hotels and other uses. The development of hotels on these vacant sites is subject to a right of first refusal by Loews Hotels to participate in the development. We have identified approximately 35+ acres of this undeveloped land that would not be necessary for the hotel development and are considering the sale of this land for retail, office or other uses. In addition, we have other smaller parcels of land that are not essential to our operations. As of December 31, 2007, two of these parcels are classified as held for sale in the financial statements.

As of December 31, 2007, we leased three off-site retail stores, two stores at the Orlando Airport and one off-site liquidation retail store at the Festival Bay Mall. In addition, we lease off-site office and warehouse space of approximately 280,000 square feet for merchandise inventory and entertainment props as well as 25,000 square feet for the manufacture of replacement prosthetic skins for some of our attractions.

We believe that our facilities, whether owned or leased, are in satisfactory working order to meet our current and anticipated needs.

Item 3. Legal Proceedings

2007 Assessments

On September 18, 2007, UCDP filed petitions to the Orange County Value Adjustment Board seeking review and adjustment of the 2007 assessments by the Orange County Property Appraiser (the “Property Appraiser”) of certain real and tangible personal property owned by UCDP. The Special Magistrates recommended that UCDP’s petitions be denied as to the USF and IOA tangible personal property and real property and recommended that the assessment as to UCDP’s parking garages be reduced. Although UCDP may challenge these assessments in circuit court, UCDP paid the full assessment with respect to the 2007 real and personal property on November 30, 2007. Accordingly, an adverse resolution of these assessments would not create any exposure beyond the amount already paid by UCDP.

2006 Assessments

In the second quarter of 2007, UCDP received and recorded a refund of approximately $1.0 million ( the “2006 Refund”) with respect to an adjustment of the 2006 assessments by the Orange County Property Appraiser (the “Property Appraiser”) reducing the assessed property values of certain real and tangible personal property owned by UCDP.

Meanwhile, on April 17, 2007, the Property Appraiser filed a Complaint in state circuit court challenging the 2006 tangible personal property assessments ( the “Property Appraiser’s 2006 Tangible Personal Property Complaint”). On May 16, 2007 UCDP filed two lawsuits against the Property Appraiser, Orange County Tax Collector (the “Tax Collector”) and the Florida Department of Revenue (the “FDOR”), challenging the Property Appraiser’s 2006 assessments for (i) real property at USF and IOA and for (ii) UCDP’s parking garages. The parties are currently engaged in motion practice and discovery and we cannot predict the outcome of these cases. In the event of an adverse determination, UCDP may be required to repay the amount of the 2006 Refund, plus interest and penalties if awarded by the court. It is premature to assess the likelihood of any material impact to UCDP’s results of operations, financial position or cash flows.

Back Assessments

On December 21, 2006, the Property Appraiser concluded an audit of UCDP’s 2003, 2004 and 2005 tangible personal property returns, asserting that UCDP underreported its tangible personal property in each of those years. The Property Appraiser issued back assessments resulting in back taxes, interest and penalties being charged by the Orange County Tax Collector. On February 19, 2007, UCDP filed a complaint in state circuit court challenging the legality of the back assessments and seeking other relief. On April 25, 2007, the Court dismissed the portions of UCDP’s complaint pertaining to the back assessments on Universal’s Islands of Adventure, and it also dismissed UCDP’s due process claim. On May 7, 2007, UCDP also re- filed the complaint (“UCDP’s Re-filed Back Assessment Complaint”) as to Islands of Adventure and also filed motions seeking rehearing, clarification and leave to amend the original complaint. On September 12, 2007, the Florida Department of Revenue filed an Answer. On February 15, 2008, the court denied the Property Appraiser’s motion to dismiss UCDP’s Re-filed Back Assessment Complaint. The Property Appraiser and the Tax Collector are appealing the denial of the dismissal of UCDP’s Re-filed Back Assessment Complaint. UCDP intends to oppose the appeal. It is premature to assess the likelihood of any material impact to UCDP’s results of operations, financial position or cash flows.

Patent Infringement

On March 1, 2007, Safety Braking Corporation, Magnetar Technologies Corp. and G&T Conveyor Co. filed a Complaint for Patent Infringement (the “Complaint”) in the United States District Court for the District of Delaware naming NBCU, USI and Blackstone Group L.P. as defendants, along with other theme park industry owners or operators which was later amended to add UCDP and Universal City Studios LLLP (“UCS”) and to dismiss NBCU, USI and The Blackstone Group, (the “Amended Complaint”). The Amended Complaint alleged that the defendants were liable for direct or indirect infringement of various patents because of their

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ownership and/or operation of various theme park rides. On August 16, 2007, the plaintiffs, UCDP and UCS agreed to settle the claims set forth in the Amended Complaint, and on November 12 and 19, 2007, the parties executed the final settlement documents. On December 10, 2007, the court entered an order endorsing the Stipulation of Dismissal agreed to by the plaintiffs, UCDP and UCS. The resolution was within the amount accrued for the loss contingency and was paid during the fourth quarter of 2007.

Other

UCDP is threatened with or involved in various other legal actions and claims incidental to the conduct of its business. Management does not expect a material impact to its results of operations, financial position or cash flows by reason of these actions.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Not applicable.

Item 6. Selected Financial Data

The following table sets forth certain of our financial data. The selected financial data as of and for the fiscal years ended December 31, 2007 and 2006, have been derived from our audited consolidated financial statements and the related notes included elsewhere in this report. The selected financial data as of and for the years ended December 31, 2005, December 31, 2004 and December 27, 2003 have been derived from our audited consolidated financial statements and the related notes thereto which are not included in this report. This report contains financial measures not prepared in accordance with United States generally accepted accounting principles, including EBITDA (as defined). Certain items in the prior years’ consolidated financial statements have been reclassified to conform to the 2007 presentation. These reclassifications are described in note 2 to our consolidated financial statements in “Item 8. Financial Statements and Supplementary Data.” All periods presented have been audited. The information set forth below should be read in conjunction with “Management’s discussion and analysis of financial condition and results of operations” and our consolidated financial statements and the related notes included elsewhere in this report.

	2007		2006		2005		2004		2003
	(Dollars in thousands)
Statement of operations data:
Operating revenues:
Theme park passes	$	450,844	$	420,654	$	436,015	$	452,113	$	378,351
Theme park food and beverage		115,166		108,595		105,179		112,520		96,382
Theme park merchandise (1)		101,596		91,418		87,719		97,040		81,282
Other theme park related (2)		99,478		81,878		69,075		61,310		47,069
Other (3)		164,759		152,841		152,608		142,525		126,224
Total operating revenues		931,843		855,386		850,596		865,508		729,308
Costs and operating expenses:
Theme park operations		175,231		166,268		165,160		162,179		152,185
Theme park selling, general and administrative		148,501		144,742		138,231		156,980		127,025
Theme park cost of products sold		112,865		104,342		100,858		108,410		93,001
Special fee payable to Vivendi Universal Entertainment and consultant fee		57,996		53,408		53,084		55,179		46,159
Depreciation and amortization		110,327		111,210		117,308		120,235		131,826
Other		136,125		130,440		134,630		125,074		108,191
Total costs and operating expenses		741,045		710,410		709,271		728,057		658,387
Operating income		190,798		144,976		141,325		137,451		70,921
Total other expense, net		98,910		103,016		106,057		114,967		123,205
Net income (loss)	$	91,888	$	41,960	$	35,268	$	22,484	($	52,284	)

(1) Sales of Universal Express Plus (“UEP”) sold in our merchandise locations were reported in merchandise revenues prior to 2007. In 2007, these sales were reclassified to other theme park related revenues and therefore, the years prior to 2007 have been reclassified to conform to 2007 presentation. UEP is a pass that allows guests to experience reduced wait times at certain rides and attractions.

(2) Consists primarily of UEP sales, aged pass sales, theme park corporate special events and the parking facility. We host special events for corporate guests whereby a portion of the theme park is rented for corporate functions.

(3) Consists primarily of CityWalk, Universal Parks & Resorts Vacations and hotel rent received from our on-site hotels.

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	2007		2006		2005		2004		2003
	(Dollars in thousands, except other operational data)
Other data:
EBITDA (as defined) (4)	$	302,852	$	258,133	$	258,217	$	254,995	$	198,973
Net cash and cash equivalents provided by operating activities		241,518		165,792		117,813		185,139		143,895
Net cash and cash equivalents used in investing activities		46,066		44,163		32,303		36,053		12,976
Net cash and cash equivalents used in financing activities		134,195		101,845		62,556		239,185		29,200
Capital expenditures		60,912		45,313		38,374		40,195		53,471
Other operational data:
Turnstile admissions in thousands(5)		11,514		11,209		11,498		12,881		11,502
Paid admissions in thousands(6)		10,758		10,468		10,772		12,110		10,598
Theme park pass revenue per paid admission	$	41.91	$	40.18	$	40.48	$	37.33	$	35.70
Theme park food, beverage and merchandise revenue per turnstile admission		18.83		17.84		16.78		16.27		15.45
Other theme park related revenue per turnstile admission		8.64		7.30		6.01		4.76		4.09
	2007		2006		2005		2004		2003
	(Dollars in thousands)
Balance sheet data:
Total cash and equivalents	$	127,874	$	66,617	$	46,833	$	23,879	$	113,978
Total assets		1,986,022		1,926,911		1,967,004		2,034,616		2,207,484
Total long-term obligations(7)		1,125,847		1,087,162		1,110,634		1,137,934		1,276,152
Total equity		636,288		678,484		696,616		706,088		719,843

(4) We have included EBITDA (as defined) because it is used by some investors as a measure of our ability to service debt and with cash flow, to measure company operating performance under our Annual Incentive Plan. EBITDA (as defined) represents earnings before interest, taxes and depreciation and amortization. EBITDA (as defined) is not prepared in accordance with United States generally accepted accounting principles and should not be considered an alternative for net income, net cash and equivalents provided by operating activities and other consolidated income or cash flow statement data prepared in accordance with United States generally accepted accounting principles or as a measure of profitability or liquidity. EBITDA (as defined), because it is before debt service, capital expenditures and working capital needs, does not represent cash that is available for other purposes at our discretion. Our presentation of EBITDA (as defined) may not be comparable to similarly titled measures reported by other companies. EBITDA (as defined) is the primary basis in the UCDP senior secured credit agreement to determine our quarterly compliance with our funded debt ratio and the interest coverage ratio, which is computed based on the prior twelve months. The calculation of EBITDA under our indentures is different, although it generally results in a similar figure. We have defined EBITDA in accordance with our credit agreement because it is an important liquidity measure. For a reconciliation of EBITDA (as defined) from net income and from net cash and cash equivalents provided by operating activities, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of operations.”

(5) Turnstile admissions represent total admissions to our theme parks, which includes paid admissions and complimentary passes.

(6) Paid admissions represent the total paid admissions to our theme parks.

(7) Long-term obligations include long-term borrowings (excluding current portions), long-term capital lease and financing obligations and long-term deferred special fees.

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	2007			2006			2005			2004			2003
Net cash and cash equivalents provided by operating activities	$	241,518		$	165,792		$	117,813		$	185,139		$	143,895
Adjustments:
Interest expense		107,906			109,733			106,701			116,546			119,027
Interest income		(7,269	)		(4,270	)		(1,451	)		(1,069	)		(831	)
Amortization of deferred finance costs		(5,164	)		(5,374	)		(5,251	)		(6,898	)		(6,840	)
Interest on financing obligations		(1,166	)		—			—			—			—
Changes in deferred special fee payable and related interest payable to Vivendi Universal Entertainment		(6,735	)		(6,168	)		22,169			(9,436	)		(35,534	)
Gain on non-monetary asset acquisition		—			—			—			812			—
Gain (loss) on sale of property and equipment		2,776			5,195			2,180			1,007			(1,285	)
Distributions from investments in unconsolidated entities, net		(3,681	)		(164	)		(529	)		(559	)		(1,147	)
Income (loss) from investments in unconsolidated entities		1,724			(711	)		(178	)		(1,161	)		(481	)
Accretion of bond discount		(837	)		(851	)		(844	)		(832	)		(625	)
Minority interest in net earnings of UCRP		(2,773	)		(2,537	)		(2,418	)		(2,537	)		(2,008	)
Change in working capital accounts		(23,447	)		(2,512	)		20,025			(26,017	)		(15,198	)
EBITDA (as defined)	$	302,852		$	258,133		$	258,217		$	254,995		$	198,973

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to help the reader understand our financial results, strategies and business environment from our viewpoint. The MD&A should be read in conjunction with our consolidated financial statements and the accompanying notes (see Item 8. Financial Statements and Supplementary Data). This overview summarizes the MD&A, which includes the following sections:

• Our operations—a brief description of our operations and our business environment.

• Ownership and basis of presentation—a summary of our company structure including our partners and subsidiaries and other factors impacting our financial presentation.

• Critical accounting policies and estimates—a discussion of our accounting policies requiring critical estimates and judgment.

• Results of operations—an analysis of our results of operations for the three-year fiscal period presented in our consolidated financial statements.

• Liquidity, capital resources and financial position—a discussion of our sources and uses of cash, our financial position, and contractual obligations.

• Forward-looking statements—cautionary information about forward-looking statements and a discussion of potential risks that could cause our future results to differ from past experience or current projections.

Our operations

We own and operate two theme parks (Universal’s Islands of Adventure and Universal Studios Florida), an entertainment complex (Universal’s CityWalk Orlando), sound stages and movie and production facilities, all located in Orlando, Florida. Our operations are heavily dependent on theme park attendance, which we consider our most important operating indicator. We use two different metrics to gauge theme park attendance: paid attendance and turnstile attendance, which includes complimentary attendance. Additionally, we track our theme park attendance from three distinct points of origin: international, Florida and the outer-U.S., which is the domestic excluding the state of Florida. Theme park attendance is affected by macroeconomic, competitive and seasonal forces. As our entertainment product is a component of our customers’ discretionary spending, macroeconomic factors, such as consumer sentiment and foreign currency exchange rates, play an important role in our attendance. Consumer sentiment is an important economic indicator, especially in relation to our outer-U.S. market where travel costs are higher when compared to our Florida market. Oil and gas prices affect consumer sentiment for all of our markets due to their impact on discretionary income and travel costs. Foreign currency exchange rates affect the relative prices for our international guests and therefore impact attendance from that market.

Orlando has seven large theme parks in the metro area. As a result, our attendance is also affected by competitive forces. Our largest competitor is Walt Disney World, which contains four of the parks in Orlando. Additionally, Anheuser Busch owns and operates Sea World and its new waterpark, Aquatica^®. Due to the high level of competition in our market, theme park pass pricing and the introduction of new attractions are factors significantly impacting theme park attendance.

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Theme park attendance follows a seasonal pattern which coincides closely with holiday and school schedules. The year begins with the end of the peak Christmas and New Year’s holiday period. When children return to school, attendance levels subside. During the March to April timeframe, spring break and Easter vacation periods drive seasonally high attendance. Since the peak spring break period fluctuates from year to year between the end of the first quarter and the beginning of the second quarter, historical quarterly financial information might not be comparable. May is a traditionally slow attendance period. June marks the beginning of the summer attendance peak when local schools are out for the summer. This peak attendance period continues throughout the month of June, as schools outside of Florida finish their terms. The peak summer period includes the entire month of July and the first few weeks in August, when the local schools begin to go back into session. Attendance levels continue to decline through Labor Day, when schools outside of Florida begin. Excluding special events such as “Rock the Universe” in September and “Halloween Horror Nights” in October, the period from September through November is seasonally slow, with an attendance spike around Thanksgiving week. Attendance falls again after Thanksgiving weekend, and does not pick up until the third week of December, when the peak Christmas and New Year’s holiday period begins. The Atlantic Ocean hurricane season begins in June and ends in November of each year. Historically, hurricanes have had little impact on Orlando theme parks. From 1991 to 2003, our parks had been closed only once due to the inclement weather caused by hurricanes. However, during the 2004 and 2005 seasons, we closed our parks on four days as a result of hurricanes. During 2007 and 2006, there were no storms that caused us to close our parks.

In 2007, approximately 48.4% of our revenues are derived from theme park passes. We analyze our theme park pass revenue based on revenue per paid admission. Sales of food, beverage and merchandise constitute approximately 23.3% of our revenues. We analyze our theme park food, beverage and merchandise revenues based on revenue per turnstile admission. We derive approximately 9.5% of our revenue from our CityWalk complex, which includes retail, dining, cinema and nightclub entertainment. Our primary operating costs include theme park operations, theme park selling, general and administrative costs, theme park cost of products sold, a special fee payable to Vivendi Universal Entertainment, a consultant fee, depreciation and amortization, and interest. We also monitor EBITDA (as defined) and certain of our debt covenant ratios as these items impact our ability to service our debt, make distributions to our partners (see the Ownership and basis of presentation section below) and make payments of special fees to our manager, Vivendi Universal Entertainment. EBITDA (as defined) is the primary basis in the UCDP senior secured credit agreement to determine our quarterly compliance with our funded debt ratio and the interest coverage ratio, which is computed based on the prior twelve months. These items are discussed in greater detail within the section entitled Liquidity, capital resources and financial position.

Ownership and basis of presentation

Our ultimate owners, each having a 50% interest in us, are Universal CPM and Blackstone. Universal CPM is a wholly owned subsidiary of Vivendi Universal Entertainment, which in turn is an indirect subsidiary of NBC Universal (“NBCU”). Prior to May 11, 2004, Vivendi Universal Entertainment was owned by Vivendi Universal, S.A. (“Vivendi”). On May 11, 2004, General Electric Company (“GE”), National Broadcasting Company Holding, Inc. (“NBC Holding”), National Broadcasting Company, Inc. (“NBC”), Vivendi, and Universal Studios Holding III Corp. (“USH3”), concluded a transaction pursuant to which GE and Vivendi combined the respective businesses of NBC, Universal Studios, Inc. (“USI”), Universal Pictures International Holdings B.V., and Universal Pictures International Holdings 2 B.V. and their respective subsidiaries (the “NBC Universal Transaction”). In connection with the NBC Universal Transaction, NBC changed its corporate name to NBC Universal. GE owns 80% of NBC Universal and Vivendi owns the remaining 20%. After the NBC Universal Transaction, NBCU indirectly owned approximately 94.5% of Vivendi Universal Entertainment. During June 2005, NBCU purchased the remaining 5.5% minority interest in Vivendi Universal Entertainment.

Our consolidated financial statements include the amounts of Universal City Development Partners, Ltd. (“UCDP Ltd.”), Universal Parks & Resorts Vacations (“UPRV”), Universal City Restaurant Partners, Ltd. (“UCRP”), and UCDP Finance, Inc. (collectively “UCDP”). All significant intercompany balances and transactions have been eliminated upon consolidation. UCDP Ltd. is our primary operating company, while UPRV is our travel company that sells and coordinates vacation packages for some of our guests.

Critical accounting policies and estimates

In the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our consolidated financial statements in conformity with United States generally accepted accounting principles. Results could differ significantly from those estimates under different assumptions and conditions. We believe that the application of the following accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management. For a summary of all of our significant accounting policies, including the accounting policies discussed below, see note 2 in our consolidated financial statements. These accounting policies have been discussed and reviewed with the representatives of Holdings’ and UCDP’s audit committees, which consist of representatives from both Vivendi Universal Entertainment and Blackstone.

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Revenue recognition

Operating revenue primarily consists of sales related to theme park passes, merchandise and food and beverage. Revenue from theme park passes is recognized at the time passes are redeemed. For passes not redeemed, revenue is recorded after one year from the date of purchase. Proceeds related to the sale of theme park or entertainment complex passes are exempt from unclaimed property reporting within the State of Florida. Revenue from theme park annual passes is recognized in equal installments over the life of the annual pass. Revenue from food and beverage and merchandise is recognized at the time of sale. In addition to unredeemed passes, we also defer revenue on admissions to CityWalk venues until redemption and on corporate sponsorships, which are recognized as revenue over the period of benefit. Revenue from hotel rent is recognized when earned.

Property and equipment

Property and equipment is recorded at cost and is depreciated on a straight-line basis over the estimated useful lives of those assets. Changes in circumstances such as changes to our business model could result in an impairment of our property and equipment. In addition, it could also result in the actual useful lives differing from our estimates. We review our assumptions whenever a change in these circumstances occurs. We currently depreciate our rides using a 20-year useful life.

If we determine that the carrying value of our property and equipment is not recoverable, we would record a property and equipment impairment adjustment. If we determine that the useful life of property and equipment should be shortened, such as finalizing the date a ride will be closed as part of developing a new ride, we would depreciate the net book value in excess of the salvage value, over the revised remaining useful life, thereby increasing depreciation expense. Our consolidated financial statements do not include any significant adjustments related to property and equipment impairment. During 2007, we accelerated depreciation on certain assets, primarily in our Lost Continent Island that will be disposed of during 2008 and 2009 as part of our Harry Potter construction. As a result, additional depreciation expense of approximately $2.8 million was recorded during 2007. Our 2006 and 2005 results do not include significant amounts of additional depreciation.

Provision for inventory

Inventory, which primarily includes spare parts for the theme park rides, food and beverage and merchandise, is recorded at the lower of cost or market. Cost is determined using the average cost method. We periodically make judgments regarding the realizable value of certain slow-moving and obsolete inventory. For spare parts, these judgments are based on the usage of the parts on specific rides. If we decide to close down a ride as part of developing a new ride, we specifically review spare parts related to the ride being closed for impairment. For merchandise, these judgments are based on the demand of our customers. When the realizable value is less than the average cost, we record an inventory provision.

At December 31, 2007, we had a $1.4 million inventory provision, which included $0.9 million for slow-moving merchandise, $0.3 million for food supplies and $0.2 million for obsolete spare parts. At December 31, 2006, we had a $1.2 million inventory provision, which included $0.7 million for slow-moving merchandise, $0.2 million for food supplies and $0.3 million for obsolete spare parts.

Litigation

We are currently involved in certain legal proceedings and other claims, including those discussed within Item 3. Legal Proceedings of this document. If we believe that costs from these matters are probable and the amount of the costs can be reasonably estimated, we will accrue the amount of the costs. Accordingly, we have accrued our estimate of the probable legal and settlement costs for the resolution of these claims. This estimate has been developed in consultation with outside counsel and is based upon an analysis of potential results, assuming a combination of litigation and settlement strategies. It is possible, however, that future results of operations for any particular quarterly or annual period could be materially affected by changes in our assumptions or the effectiveness of our strategies related to these proceedings. As additional information becomes available, we will reassess any potential liability related to these matters and, if necessary, revise our estimates. See note 13 to our consolidated financial statements for more detailed information on litigation related exposure.

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Recent accounting pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. This statement does not require any new fair value measurements; rather, it applies under other accounting pronouncements that require or permit fair value measurements. The provisions of this statement are to be applied prospectively as of the beginning of the fiscal year in which this statement is initially applied, with any transition adjustment recognized as a cumulative-effect adjustment to the opening balance of retained earnings. The provisions of SFAS 157 are effective for the fiscal years beginning after November 15, 2007; therefore, we anticipate adopting this standard as of January 1, 2008. The adoption of SFAS 157 is not expected to have a material impact on our financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value. SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, or our first fiscal quarter of 2008. Early adoption is permitted. The adoption of SFAS 159 is not expected to have a material impact on our financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”), which replaces SFAS No. 141. SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any resulting goodwill, and any non-controlling interest in the acquiree. The Statement also provides for disclosures to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008, or our first fiscal quarter of 2009 and must be applied prospectively to business combinations completed on or after that date. We do not believe adoption of SFAS 141R will have a material impact on our financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements — an amendment of Accounting Research Bulletin No. 51” (“SFAS 160”), which establishes accounting and reporting standards for non-controlling interests (“minority interests”) in subsidiaries. SFAS 160 clarifies that a non-controlling interest in a subsidiary should be accounted for as a component of equity separate from the parent’s equity. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, or our first fiscal quarter of 2009 and must be applied prospectively, except for the presentation and disclosure requirements, which will apply retrospectively. We are currently evaluating the potential impact of the adoption of SFAS 160 on our financial position, results of operations and cash flows.

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Results of operations

Overview

During 2007, our paid admissions increased 3% compared to 2006. This was driven primarily by our Florida market, which experienced low double digit percentage growth. Through this attendance growth, enhanced product offerings and pricing initiatives, total operating revenues increased 9%. This included increasing overall per guest spending on food, beverage and merchandise by 6% and increasing overall guest spending on other theme park related products by 18%. These results in conjunction with diligent management of our variable labor and operating expenses, particularly during non-peak times, helped us increase EBITDA (as defined) by 17% over 2006 as well as increase our net income by $49.9 million. At December 31, 2007, we had $227.9 million in cash and unused revolving credit, consisting of $127.9 million in cash and $100.0 million available under our revolving credit facilities. Additionally, as of December 31, 2007, we carried $1,007.1 million in total debt.

2007 compared to 2006

The following table summarizes our results of operations during the years ended December 31, (in thousands except per capita amounts and percentages):

	2007		2006		% Change Favorable/ (Unfavorable)
Operational data:
Paid theme park admissions		10,758		10,468	2.8	%
Turnstile theme park admissions		11,514		11,209	2.7	%
Theme park pass revenue per paid admission	$	41.91	$	40.18	4.3	%
Theme park food, beverage and merchandise revenue per turnstile admission		18.83		17.84	5.5	%
Other theme park related revenue per turnstile admission		8.64		7.30	18.4	%
Statement of operations data:
Operating revenues:
Theme park pass revenue	$	450,844	$	420,654	7.2	%
Theme park food and beverage		115,166		108,595	6.1	%
Theme park merchandise		101,596		91,418	11.1	%
Other theme park related		99,478		81,878	21.5	%
Other		164,759		152,841	7.8	%
Total operating revenues		931,843		855,386	8.9	%
Costs and operating expenses:
Theme park operations		175,231		166,268	(5.4	)%
Theme park selling, general and administrative		148,501		144,742	(2.6	)%
Theme park cost of products sold		112,865		104,342	(8.2	)%
Special fee payable to Vivendi Universal Entertainment and consultant fee		57,996		53,408	(8.6	)%
Depreciation and amortization		110,327		111,210	0.8	%
Other		136,125		130,440	(4.4	)%
Total costs and operating expenses		741,045		710,410	(4.3	)%
Operating income		190,798		144,976	31.6	%
Non-operating expenses, net		98,910		103,016	4.0	%
Net income	$	91,888	$	41,960	119.0	%

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Paid Theme Park Admissions increased by 3% primarily due to low double digit percentage growth in our Florida market, as previously described in the Overview section.

Theme park related revenues increased $64.5 million or 9% to 2006 which was driven by the attendance growth and an increase in guest spending. Theme park pass revenue per paid admission increased 4%, per turnstile admission spending on food and beverage and merchandise increased 6%. Per turnstile admission spending on other theme park related items increased 18%. Other theme park related items primarily include sales of Universal Express Plus tickets, parking revenue, park special events, stroller rentals and aged pass sales. Additionally, other revenue generating programs increased $11.9 million or 8%. The increase in other revenue was principally due to $2.5 million in incremental rental income from our onsite resort hotels. In addition to our additional hotel rental income, we also experienced $5.4 million in higher revenue related to our CityWalk venues and $4.1 million of increased revenue from our travel company, Universal Parks & Resorts Vacations. These were offset partially by a $1.0 million decrease in revenue from our corporate sponsorships.

Theme park operations costs increased 5% year over year due to the increased cost of entertainment, maintenance and other operational expenses driven by higher attendance. This was partially offset by reduced utility costs from various company initiatives. Theme park selling, general and administrative costs were unfavorable by $3.8 million primarily due to an increase in marketing spend, an increase in bonus accruals and an investment in information technology infrastructure and support, partially offset by a reduction in property tax and insurance costs. Theme park cost of product sold remained consistent to 2006 at approximately 52%. Other expenses increased by $5.7 million, primarily due to $1.8 million in increased costs relating to our travel company’s increase in revenues, $1.2 million in increase credit card fees due to increased sales and a continuing shift towards credit card transactions from cash transactions, and $2.3 million increased costs relating to the increased CityWalk revenues. These were offset by lower costs related to park special events due to a decreased number of events over prior year. Non-operating expenses decreased by $4.1 million primarily due to decreased debt interest of $2.0 million which was attributable to the lower interest rates during the year and an increase in interest income of $3.0 million which was attributable to higher cash balances throughout the year.

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2006 compared to 2005

The following table summarizes our results of operations during the years ended December 31, (in thousands except per capita amounts and percentages):

	2006		2005		% Change Favorable/ (Unfavorable)
Operational data:
Paid theme park admissions		10,468		10,772	(2.8	)%
Turnstile theme park admissions		11,209		11,498	(2.5	)%
Theme park pass revenue per paid admission	$	40.18	$	40.48	(0.7	)%
Theme park food, beverage and merchandise revenue per turnstile admission		17.84		16.78	6.3	%
Other theme park related revenue per turnstile admission		7.30		6.01	21.5	%
Statement of operations data:
Operating revenues:
Theme park pass revenue	$	420,654	$	436,015	(3.5	)%
Theme park food and beverage		108,595		105,179	3.2	%
Theme park merchandise		91,418		87,719	4.2	%
Other theme park related		81,878		69,075	18.5	%
Other		152,841		152,608	0.2	%
Total operating revenues		855,386		850,596	0.6	%
Costs and operating expenses:
Theme park operations		166,268		165,160	(0.7	)%
Theme park selling, general and administrative		144,742		138,231	(4.7	)%
Theme park cost of products sold		104,342		100,858	(3.5	)%
Special fee payable to Vivendi Universal Entertainment and consultant fee		53,408		53,084	(0.6	)%
Depreciation and amortization		111,210		117,308	5.2	%
Other		130,440		134,630	3.1	%
Total costs and operating expenses		710,410		709,271	(0.2	)%
Operating income		144,976		141,325	2.6	%
Non-operating expenses, net		103,016		106,057	2.9	%
Net income	$	41,960	$	35,268	19.0	%

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Paid Theme Park Admissions decreased by 3% primarily due to weakness in our international and outer-U.S. point of origin markets. These markets experienced a combined percentage decrease in the mid single digits, partially offset by high single digit percentage growth in our Florida market.

Theme park pass spending per paid admission decreased by 1%. This was however, partially offset by an increase in per turnstile admission spending on food and beverage and merchandise of 6%. Per turnstile admission spending on other theme park related items increased 22%. This led to an overall operating revenue increase of approximately $4.8 million, or 1%. The increase in revenue was principally due to $3.1 million in incremental rental income from our onsite resort hotels. We are entitled to receive additional ground rent from the onsite hotels upon their achievement of certain cash flow targets. Although we believe these targets will be met in the coming year, the amount of any additional rent is subject to variation as well as a cap. Furthermore, we can not assure you that the targets will be met in future periods. In addition to our additional hotel rental income, we also experienced $1.6 million in higher revenue related to our CityWalk venues, $1.4 million relating to increased sales at our off-site retail stores and a $7.1 million increase in the sale of Universal Express Plus tickets, which are passes that allow guests express access on our rides. These were offset partially by a $1.0 million decrease in revenue from our corporate sponsorships and $5.2 million of decreased revenue from our travel company, Universal Parks & Resorts Vacations. We utilize our travel company as a vehicle to help improve profits by increasing attendance, not by marking up the cost of the hotels and airfares purchased on behalf of our guests. During 2006, we repositioned our travel to focus more on Universal Orlando products.

Theme park operations increased 1% year over year as the increased cost of $2.1 million for utilities due to rising prices was nearly offset by the decreased cost of entertainment and other operational expenses. Theme park selling, general and administrative costs were unfavorable by $6.5 million primarily due to an increase in marketing spend driven by $4.0 million in additional advertising and promotions and $0.6 million related to the expansion of our sales team. Theme park cost of product sold remained consistent to 2005 at approximately 52%. Depreciation and Amortization was favorable largely due to certain assets with lives of 5 years becoming fully depreciated during 2006 and 2005. Other expenses decreased by $4.2 million, primarily due to $2.6 million in decreased costs relating to our travel company and certain one-time charges incurred during 2005, including $3.1 million in legal costs; $1.9 million in environmental, health and safety costs; and $2.3 million in reorganization costs. This was offset by higher costs related to credit card fees and special events. Non-operating expenses decreased $3.0 million despite an increase in debt interest of $3.0 million which was attributable to the rising interest rates during the year and a change in the fair value of our interest rate swaps of $0.9 million. These were offset by an increase in interest income of $2.8 million due to increased cash balances throughout the year and an increased gain on sales of land of $3.0 million.

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Liquidity, capital resources and financial position

Overview

We believe our ability to generate cash flows from operations is a key financial strength as well as our principal source of liquidity. We have generated positive cash flows from operations for each of the past five years, and we believe that we will continue to generate positive cash flows from operations in 2008 and in future years. In addition to the cash flow generated from our operations, our available cash and our unused revolving credit facilities also provide liquidity. As such, we believe that we have the financial resources necessary to meet business requirements for the next 12 months. Historically, our principal liquidity requirements have been for capital expenditures, special fee payments, debt retirements, and working capital. Our strategy includes rationalizing our land holdings, which may involve sales from time to time of non-core land assets. As of December 31, 2007, we had two parcels of land held for sale and are actively evaluating our land assets for optimization potential. We cannot assure you as to the timing, size or proceeds with respect to any land sale and we may not be able to sell land assets on commercially reasonable terms or at all.

Our current business structure is heavily leveraged, and as of December 31, 2007, our total debt was $1,007.1 million. This included $509.0 million outstanding under our senior secured credit agreement and $498.1 million outstanding under the April 2010 notes ($500.0 million, net of a remaining unamortized discount of $1.9 million). At December 31, 2006, our total debt was $1,006.4 million. This primarily included $509.0 million outstanding under our senior secured credit agreement and $497.3 million outstanding under the April 2010 notes ($500.0 million, net of a remaining unamortized discount of $2.7 million). The April 2010 notes are due in 2010, while our senior secured credit agreement calls for quarterly principal installments of 0.25% with the remainder due in 2011. During 2006, we made a voluntary additional $30.0 million principal payment, effectively prepaying all of the required principal payments until the facility’s maturity date. Our senior secured credit facility is repayable in full at December 1, 2009, or January 1, 2010, respectively if the April 2010 notes or May 2010 notes are not refinanced or repaid in full prior to such date. It is highly unlikely that we will be able to generate enough cash to pay these balances in full prior to the specified due dates which would then necessitate refinancing our long-term debt. Furthermore, our access to capital markets and our ability to issue various securities to raise capital could be affected by changes in our bond ratings. Although our bond rating remained consistent throughout 2007, we can not be assured that future changes in our ratings will not occur.

Additionally, we have an agreement (the “Consulting Agreement”) with Steven Spielberg (the “Consultant”) under which we pay a fee for consulting services and exclusivity equal to a percentage of our gross revenues from the attractions and certain other facilities owned or operated, in whole or in part, by us. Under the terms of the Consulting Agreement, the Consultant is also entitled to a fee based on a percentage of gross revenues of comparable projects, which are gated motion picture and television themed attractions owned or operated, in whole or in part, by us, or any of our partners or any of their affiliates, other than in Universal City, California. At present, the only theme park that is a comparable project is Universal Studios Japan in Osaka, Japan. It is possible that comparable projects will be created in the future that would fall under the Consulting Agreement. The Consultant may also be entitled to participate in certain sales of equity by our partners and to participate in certain real estate development activities of our partners or their affiliates. Although the Consulting Agreement has no expiration date, starting in June 2010, the Consultant has the right, upon 90 days notice, to terminate the periodic payments under the Consulting Agreement and receive instead one cash payment equal to the fair market value of the Consultant’s interest in the revenue streams in the Orlando parks and any comparable projects, which fair market value could be significant. If the Consultant exercises the option and the parties cannot agree on the fair market value of the buyout option, the fair market value will be determined by a binding appraisal procedure. We represented under the agreement that the Consultant’s interest in each of our parks and in any comparable projects will have priority over the interests of all financiers, lenders and others who may have an interest in that park or project. Our obligations under the agreement are guaranteed by Universal Studios, Inc., as successor to MCA Inc., and Universal Studios, Inc.’s obligations under that guarantee have in turn been assumed by Vivendi Universal Entertainment. Vivendi Universal Entertainment has indemnified us against any liability under the Consulting Agreement related to any comparable project that is not owned or controlled by UCDP. Under the terms of the May 2010 notes, the April 2010 notes and our senior secured credit agreement, a lien to secure our obligations under the Consultant Agreement would be a permitted lien. This event could impact our liquidity as discussed in Item 1A. Risk Factors – Risks related to our Indebtedness. For further information on the Consulting Agreement please refer to Item 13. Certain relationships and related party transactions—Consultant agreement.

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our amended and restated senior secured credit facilities in an amount sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs. Our ability to continue to fund these items and to continue to reduce debt could be adversely affected by the occurrence of unfavorable events.

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As a significant portion of our debt is subject to variable rates, we have entered into interest rate swap agreements to help reduce our interest rate risk. Please refer to Item 7A. Quantitative and Qualitative Disclosures About Market Risk for further discussion of these agreements and our strategy to manage our interest rate risk. The following table summarizes key aspects in our financial position and liquidity as of December 31, (in thousands):

	2007		2006
Cash and cash equivalents	$	127,874	$	66,617
Unused portion of revolving credit facility		100,000		100,000
Current portion of long-term borrowings, capital lease and financing obligations		375		709
Current portion of special fees		8,967		8,214
Total long-term obligations (1)		1,125,847		1,087,162

(1) Long-term obligations include long-term borrowings (excluding current portions), long-term capital lease and financing obligations and long-term deferred special fees. For more information regarding long-term capital lease and financing obligations, see note 8 to the Consolidated Financial Statements.

Our management assesses operational performance using EBITDA (as defined) because it is used by some investors as a measure of our ability to service debt. In addition, it is the primary basis in our senior secured credit agreement to determine our quarterly compliance with our funded debt ratio and the interest coverage ratio, which is computed based on the prior twelve months. We believe our senior secured credit agreement is a material agreement as it represents a critical component of our capital structure and an important source of our liquidity. Our failure to comply with the financial maintenance covenants in the senior secured credit agreement would result in an event of default occurring under the agreement which would give our lenders the right to accelerate all of the indebtedness then outstanding under that agreement. EBITDA (as defined) represents earnings before interest, taxes and depreciation and amortization. EBITDA (as defined) is not prepared in accordance with United States generally accepted accounting principles and should not be considered as an alternative for net income, net cash provided by operating activities and other consolidated income or cash flow statement data prepared in accordance with United States generally accepted accounting principles or as a measure of profitability or liquidity. EBITDA (as defined), because it is before debt service, capital expenditures, and working capital needs, does not represent cash that is available for other purposes at our discretion. Our presentation of EBITDA (as defined) may not be comparable to similarly titled measures reported by other companies. The following is a reconciliation of net cash provided by operating activities to EBITDA (as defined) for each of the last three fiscal years ended December 31 (in thousands):

	2007			2006			2005
Net cash and cash equivalents provided by operating activities	$	241,518		$	165,792		$	117,813
Adjustments:
Interest expense		107,906			109,733			106,701
Interest income		(7,269	)		(4,270	)		(1,451	)
Amortization of deferred finance costs		(5,164	)		(5,374	)		(5,251	)
Interest on financing obligations		(1,166	)		—			—
Changes in deferred special fee payable and related interest payable to Vivendi Universal Entertainment		(6,735	)		(6,168	)		22,169
Gain on sale of property and equipment		2,776			5,195			2,180
Distributions from investments in unconsolidated entities, net		(3,681	)		(164	)		(529	)
Income/(loss) from investments in unconsolidated entities		1,724			(711	)		(178	)
Accretion of bond discount		(837	)		(851	)		(844	)
Minority interest in net earnings of UCRP		(2,773	)		(2,537	)		(2,418	)
Change in working capital accounts		(23,447	)		(2,512	)		20,025
EBITDA (as defined)	$	302,852		$	258,133		$	258,217

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The following is reconciliation of net income to EBITDA (as defined) for the years ended December 31 (in thousands):

	2007			2006			2005
Net income	$	91,888		$	41,960		$	35,268
Adjustments:
Interest expense		107,906			109,733			106,701
Depreciation and amortization		110,327			111,210			117,308
Change in fair value of interest rate swaps		—			(500	)		391
Interest income		(7,269	)		(4,270	)		(1,451	)
EBITDA (as defined)	$	302,852		$	258,133		$	258,217

Financing transactions

On December 9, 2004, we refinanced our senior secured credit facility with JPMorgan Chase (the “2004 Amendment”) resulting in amended and restated senior secured credit facilities consisting of a $550.0 million term loan (the “senior secured credit facility”) and a $100.0 million revolving credit facility. In addition, we may borrow up to $200.0 million of uncommitted incremental term loans from time to time. Our refinanced loan now requires quarterly principal installments of 0.25% with the balance due in 2011 (due in 2009 or 2010 if our April 2010 or Holdings’ May 2010 notes are not repaid or refinanced as discussed previously). The borrowings under our senior secured credit agreement bear interest at a rate equal to an applicable margin plus, at our option, either (a) a base rate determined by reference to the higher of (1) JPMorgan Chase Bank’s prime rate and (2) the federal funds rate plus 1/2 of 1% or (b) LIBOR. As a result of the refinancing of our senior secured credit facility, the margin was adjusted from approximately 4.0% to 1.75% with respect to the LIBOR borrowings. Funds borrowed on the revolving credit facility accrue interest at an incremental 0.25% compared to borrowings on the senior secured credit facility. In addition to paying interest on outstanding debt, we pay a commitment fee equal to 0.5% per annum of the unutilized commitments under UCDP’s revolving credit facility.

Cash flow summary

The following table summarizes key aspects of our cash flows for each of the last three fiscal years ended December 31 (in thousands):

	2007		2006		2005
Net cash and cash equivalents provided by operating activities	$	241,518	$	165,792	$	117,813
Net cash and cash equivalents used in investing activities		46,066		44,163		32,303
Capital expenditures		60,912		45,313		38,374
Net cash and cash equivalents used in financing activities		134,195		101,845		62,556

The increase in cash flow from operations from 2006 to 2007, which totaled $75.7 million, or 46%, resulted primarily from a $49.9 million increase in net income and $23.4 million in changes to our working capital, driven largely by the increase in the accounts payable and accrued liabilities relating to marketing and capital expenditures.

The increase in cash flow from operations from 2005 to 2006, which totaled $48.0 million, or 41%, resulted from a $6.7 million increase in net income, $26.6 million in deferred special fee payments to Vivendi Universal Entertainment during 2005, $18.0 million in lower payments related to our incentive plans, which were also paid in 2005, $6.2 million in long-term special fees payable to Vivendi Universal Entertainment and changes in other working capital. These items were partially offset by an increased gain on land sales of $3.0 million and a decrease in depreciation expense of $6.1 million.

Cash flows used in investing activities for 2007, 2006 and 2005 consisted primarily of capital expenditures partially offset by total proceeds from land sales, capital reimbursements and capital claims settlements of $14.8 million, $1.2 million and $6.1 million, respectively.

We make annual investments both to provide ongoing capital support for our existing park attractions and infrastructure, and also to fund the development of new park attractions and infrastructure. We believe these investments are critical in maintaining our position of having technologically advanced theme parks and to effectively compete with our competitors. These costs can vary from one year to the next, depending on the timing of the construction cycles. During 2007 and 2006, we spent $95.4 million and $41.4 million, respectively on capital expenditures, including intellectual property rights and estimate our 2008 expenditures to be approximately $150.0 million. Our capital expenditures in excess of the amount permitted by the capital covenant in our senior secured credit agreement will be funded through partner equity contributions. A large portion of our estimated 2008 capital expenditures relate to the design and construction of our upcoming Simpsons™ attraction and Harry Potter™ island, which we anticipate opening during the spring of 2008 and by the summer of 2010, respectively. Additionally, we recently announced that we will construct a new roller coaster ride that will open in 2009. We estimate our total capital investment in these attractions will range from $275.0 million to $310.0 million. This includes all capital expenditures to build these attractions. This also takes into account the net present value of all license fee payments, including license fee payments to Warner Bros. Consumer Products Inc. that would become payable during the renewal option periods, but does not include merchandise royalties, which will be paid as merchandise is sold.

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During each of 2007, 2006 and 2005, the primary components of our financing outflows related to Partner distributions and payments on UCDP’s long term obligations.

Special fee requirements

Under UCDP’s partnership agreement, a “special fee” is payable to Vivendi Universal Entertainment through Universal CPM. The special fee is calculated at 5% of certain gross operating revenues, as defined in UCDP’s partnership agreement, generated from each of Universal Studios Florida and Universal’s Islands of Adventure. For 2007, 2006 and 2005, the special fee amounted to $38.4 million, $35.3 million and $35.3 million, respectively. For 2007, 2006 and 2005, the interest incurred on the deferred special fee payable to Vivendi Universal Entertainment, including the long term portion, was $7.5 million, $7.2 million and $6.1 million, respectively.

Historically, under the terms of our senior secured credit facility and the April 2010 notes, the special fee related to both Universal Studios Florida and Universal’s Islands of Adventure could only be paid upon achievement of certain but different leverage ratios. These ratios were met as of our quarter end throughout 2007, 2006 and 2005, thus allowing the special fee to be paid. Under the terms of our partnership agreement, fees related to revenue derived from operations of Universal’s Islands of Adventure were deferred since its opening in 1999 until equity distributions to Blackstone, from operating profits generated from Universal’s Islands of Adventure, totaled an amount equal to $234.7 million. As a result of distributions made in December 2004 to Blackstone by Holdings, Blackstone acknowledged, as between the partners, that the equity distribution condition to the payment of Universal’s Islands of Adventure special fees had been satisfied. Accordingly, going forward, the special fee payable related to Universal’s Islands of Adventure is able to be paid when leverage ratios are met.

Subsequent to the 2004 Amendment, the most restrictive quarterly covenant for payment of the special fee is a debt to EBITDA ratio (as defined in the senior secured credit facility) of 5.0 to 1.0 or less related to the current special fees below $20.0 million and 4.0 to 1.0 or less related to the current and deferred special fees in excess of $20.0 million annually. As of each quarter end, we believe these ratios were met. Accordingly, during 2007 and 2006, we paid total fees of $38.5 million and $35.9 million, respectively, to Vivendi Universal Entertainment. At December 31, 2007 and 2006, the current portion of our consolidated balance sheet included $9.0 million and $8.2 million, respectively, related to the special fees payable to Vivendi Universal Entertainment. At December 31, 2007 and 2006, we had accrued long-term special fees payable to an affiliate of Vivendi Universal Entertainment of $87.6 million and $80.9 million, respectively.

Covenant stipulations

Our senior secured credit agreement and the April 2010 notes contain a number of covenants that, among other things, restrict, subject to certain exceptions, our ability, and the ability of our subsidiaries, to sell assets, incur additional indebtedness, repay other indebtedness (including the April 2010 notes), pay certain distributions, create liens on assets, make investments, loans or advances, make certain acquisitions, engage in mergers or consolidations, enter into sale and leaseback transactions, engage in certain transactions with affiliates, amend certain material agreements governing our indebtedness and change the business conducted by us and our subsidiaries. In addition, the amended and restated senior secured credit agreement contains the following financial covenants: a maximum total leverage ratio; a minimum interest coverage ratio; and a limitation on capital expenditures. We believe that we were in compliance with all financial covenants as of December 31, 2007 and 2006.

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Contractual obligations

The following table reflects our estimated contractual obligations as of December 31, 2007:

			Payments due by fiscal period
	Total		2008		2009 to 2010		2011 to 2012		2013 and Beyond
	(in millions)
Contractual obligations:
Long-term borrowings(1)	$	1,009.0	$	—	$	500.0	$	509.0	$	—
Interest payments on long-term borrowings		277.8		100.2		161.9		15.7		—
Operating lease obligations		12.2		3.5		5.4		3.1		0.2
Purchase obligations		129.5		59.2		25.1		17.7		27.5
Special fee payable to Vivendi Universal Entertainment		96.6		9.0		—		—		87.6
Other long-term liabilities		11.0		2.1		—		—		8.9
Total contractual obligations	$	1,536.1	$	174.0	$	692.4	$	545.5	$	124.2

(1) Amounts exclude discounts and therefore represent gross maturities. The maturity date of the senior secured credit facility in the amount of $509.0 million is June 6, 2011, however, it is repayable in full at December 1, 2009, if the April 2010 notes are not refinanced or repaid in full prior to such date.

Forward Looking Statements

This report contains “forward looking statements.” Forward looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information and, in particular, appear under the headings “Summary,” “Management’s discussion and analysis of financial condition and results of operations,” “Industry overview” and “Business.” When used in this report, the words “estimates,” “expects,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” or future or conditional verbs, such as “will,” “should,” “could” or “may” and variations of such words or similar expressions are intended to identify forward looking statements. All forward looking statements, including, without limitation, management’s examination of historical operating trends and data, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward looking statements contained in this report. Important factors that could cause our actual results to differ materially from the forward looking statements we make in this report include:

• the risks and uncertainties relating to a general economic downturn;

• the dependence of our business on air travel;

• the risks inherent in deriving substantially all of our revenues from one location;

• the loss of key distribution channels for pass sales;

• competition within the Orlando theme park market;

• publicity associated with accidents occurring at theme parks;

• the loss of material intellectual property rights used in our business;

• the seasonality of our business;

• the substantial indebtedness of us and of our subsidiaries;

• our dependence on Universal Studios, Inc. and its affiliates; and

• the additional risks set forth in this report, including under the heading “Item 1A. Risk Factors.”

There may be other factors that may cause our actual results to differ materially from the forward looking statements.

All forward looking statements attributable to us or persons acting on our behalf apply only as of the date of this report and are expressly qualified in their entirety by the cautionary statements included in this report. We undertake no obligation to update or revise forward looking statements which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as required by law.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The following is a schedule of our fixed and variable rate debt maturities and principal payments for each of the next five years, and thereafter (in thousands):

	2008		2009		2010			2011			2012		Total		Fair value
Debt:
Fixed rate debt	$	—	$	—	$	500,000		$	—		$	—	$	500,000	$	517,500
Average rate		n/a		n/a		11.75	%		n/a			n/a
Variable rate debt	$	—	$	—	$	—		$	509,000		$	—	$	509,000	$	497,550
Average interest rate		n/a		n/a		n/a			6.45	%		n/a
Total gross debt	$	—	$	—	$	500,000		$	509,000		$	—	$	1,009,000	$	1,015,050

We are exposed to market risks relating to fluctuations in interest rates. We may mitigate this risk by paying down additional outstanding balances on our variable rate loans, refinancing with fixed rate permanent debt or obtaining cash flow hedge instruments. As a result, we have $134.0 million of unhedged variable rate debt. Based on these variable-rate obligations, each 1% increase or decrease in the level of interest rates would, respectively, increase or decrease our annual interest expense and related cash payments by approximately $1.3 million.

The sensitivity analysis described above, contains certain simplifying assumptions, (for example, it assumes a constant level of variable-rate debt for all maturities and an immediate, across-the-board increase or decrease in the level of interest rates with no other subsequent changes for the remainder of the period). Therefore, although it gives an indication of our exposure to changes in interest rates, it is not intended to predict future results and our actual results will likely vary.

We are exposed to credit loss in the event of nonperformance by the other party to the derivative financial instruments. We limit this exposure by entering into agreements directly with a number of major financial institutions that meet our credit standards and that are expected to satisfy fully their obligations under the contracts. For more information about our interest rate swaps, see note 6 to the Consolidated Financial Instruments.

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Item 8. Financial Statements and Supplementary Data

The following consolidated financial statements, and the related notes thereto, of Universal City Development Partners, Ltd. and subsidiaries and the Report of the Independent Registered Public Accounting Firm are filed as a part of this report.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	41
Consolidated Balance Sheets	42
Consolidated Statements of Operations	44
Consolidated Statements of Comprehensive Income and Changes in Partners’ Equity	45
Consolidated Statements of Cash Flows	46
Notes to Consolidated Financial Statements	48

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Report of Independent Registered Public Accounting Firm

The Partners

Universal City Development Partners, Ltd.

We have audited the accompanying consolidated balance sheets of Universal City Development Partners, Ltd. and subsidiaries (UCDP) as of December 31, 2007 and 2006, and the related consolidated statements of operations, comprehensive income and changes in partners’ equity, and cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of UCDP’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of UCDP’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of UCDP’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Universal City Development Partners, Ltd. and subsidiaries at December 31, 2007 and 2006, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Certified Public Accountants

Orlando, Florida

March 17, 2008

41

UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31, 2007			December 31, 2006
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	127,874		$	66,617
Accounts receivable, net		34,025			30,034
Receivables from related parties		5,053			7,576
Inventories, net		42,240			43,816
Prepaid expenses and other assets		5,731			3,923
Notes receivable		—			4,960
Total current assets		214,923			156,926
Property and equipment, at cost:
Land and land improvements		473,656			488,675
Buildings and building improvements		1,380,898			1,377,175
Equipment, fixtures and furniture		1,074,322			1,105,048
Construction in process		72,568			17,652
Total property and equipment, at cost:		3,001,444			2,988,550
Less accumulated depreciation		(1,340,091	)		(1,273,232	)
Property and equipment, net		1,661,353			1,715,318
Other assets:
Interest rate swap assets, at fair market value		—			4,050
Investments in unconsolidated entities		12,828			7,097
Intangible assets, net		55,107			13,283
Deferred finance costs, net		14,592			19,756
Assets held for sale		18,205			2,551
Other assets		9,014			7,930
Total other assets		109,746			54,667
Total assets	$	1,986,022		$	1,926,911

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	December 31, 2007			December 31, 2006
	(In thousands)
LIABILITIES AND PARTNERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	130,870		$	89,065
Unearned revenue		46,681			47,250
Due to related parties		22,583			8,476
Current portion of capital lease and financing obligations		375			634
Current portion of long-term borrowings		—			75
Total current liabilities		200,509			145,500
Long-term liabilities:
Long-term borrowings, net of current portion		1,007,126			1,006,289
Deferred special fee payable to affiliates		87,608			80,873
Capital lease and financing obligations, net of current portion		31,113			—
Minority interest in equity of UCRP		7,294			8,066
Interest rate swap liability, at fair market value		5,106			—
Other		10,978			7,699
Total long-term liabilities		1,149,225			1,102,927
Partners’ equity:
Vivendi Universal Entertainment		320,697			337,217
Blackstone		320,697			337,217
Accumulated other comprehensive (loss)/income		(5,106	)		4,050
Total partners’ equity		636,288			678,484
Total liabilities and partners’ equity	$	1,986,022		$	1,926,911

See accompanying notes.

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UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2007			2006			2005
	(In thousands)
Operating revenues:
Theme park passes	$	450,844		$	420,654		$	436,015
Theme park food and beverage		115,166			108,595			105,179
Theme park merchandise		101,596			91,418			87,719
Other theme park related		99,478			81,878			69,075
Other		164,759			152,841			152,608
Total operating revenues		931,843			855,386			850,596
Costs and operating expenses:
Theme park operations		175,231			166,268			165,160
Theme park selling, general and administrative		148,501			144,742			138,231
Theme park cost of products sold		112,865			104,342			100,858
Special fee payable to Vivendi Universal Entertainment and consultant fee		57,996			53,408			53,084
Depreciation and amortization		110,327			111,210			117,308
Other		136,125			130,440			134,630
Total costs and operating expenses		741,045			710,410			709,271
Operating income		190,798			144,976			141,325
Other (expense) income:
Interest expense		(107,906	)		(109,733	)		(106,701	)
Interest income		7,269			4,270			1,451
Change in fair value of interest rate swaps and amortization of accumulated other comprehensive income (loss)		—			500			(391	)
Income (loss) from joint ventures		1,724			(711	)		(178	)
Gain from sale of property and equipment		2,776			5,195			2,180
Minority interest in net earnings of UCRP		(2,773	)		(2,537	)		(2,418	)
Total other expense, net		(98,910	)		(103,016	)		(106,057	)
Net income	$	91,888		$	41,960		$	35,268

See accompanying notes.

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UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND CHANGES IN PARTNERS’ EQUITY

	Vivendi Universal Entertainment			Blackstone			Accumulated Comprehensive (Loss) Income			Total Partners’ Equity			Comprehensive Income
	(In thousands)
Balance at December 31, 2004	$	355,855		$	355,855		$	(5,622	)	$	706,088		$	—
Change in fair value of interest rate swaps designated as hedges		—			—			2,469			2,469			2,469
Amortization of accumulated other comprehensive (loss) income from interest rate swaps previously designated as hedges		—			—			5,401			5,401			5,401
Partner distributions		(26,305	)		(26,305	)		—			(52,610	)		—
Net income		17,634			17,634			—			35,268			35,268
Balance at December 31, 2005		347,184			347,184			2,248			696,616			43,138
Change in fair value of interest rate swaps designated as hedges		—			—			1,580			1,580			1,580
Amortization of accumulated other comprehensive (loss) income from interest rate swaps previously designated as hedges		—			—			222			222			222
Partner distributions		(30,947	)		(30,947	)		—			(61,894	)		—
Net income		20,980			20,980			—			41,960			41,960
Balance at December 31, 2006		337,217			337,217			4,050			678,484			43,762
Change in fair value of interest rate swaps designated as hedges		—			—			(9,156	)		(9,156	)		(9,156	)
Partner distributions		(62,464	)		(62,464	)		—			(124,928	)		—
Net income		45,944			45,944			—			91,888			91,888
Balance at December 31, 2007	$	320,697		$	320,697		$	(5,106	)	$	636,288		$	82,732

See accompanying notes.

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UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended December 31,
	2007			2006			2005
Cash flows from operating activities
Net income	$	91,888		$	41,960		$	35,268
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Depreciation		108,861			109,764			115,842
Amortization of intangible assets		1,466			1,446			1,466
Amortization of deferred finance costs		5,164			5,374			5,251
Accretion of bond discount		837			851			844
Interest on financing obligations		1,166			—			—
Distributions from investments in unconsolidated entities, net		3,681			164			529
Gain on sale of property and equipment		(2,776	)		(5,195	)		(2,180	)
Change in fair value of interest rate swaps		—			(500	)		391
(Income)/loss from investments in unconsolidated entities		(1,724	)		711			178
Minority interest in net earnings of UCRP		2,773			2,537			2,418
Changes in operating assets and liabilities:
Accounts receivable, net		(3,991	)		(5,480	)		(5,563	)
Notes receivable		70			(70	)		—
Receivables from related parties		2,523			(2,705	)		2,112
Inventories, net		1,576			(2,313	)		(760	)
Prepaid expenses and other assets		(1,808	)		2,300			(1,413	)
Other long-term assets		(1,084	)		(1,001	)		1,917
Accounts payable and accrued liabilities		20,954			4,321			(12,404	)
Unearned revenue		(569	)		7,768			4,494
Due to related parties		2,497			(1,034	)		(8,583	)
Deferred special fees payable to Vivendi Universal Entertainment		6,735			6,168			(22,169	)
Other long-term liabilities		3,279			726			175
Net cash and cash equivalents provided by operating activities		241,518			165,792			117,813
Cash flows from investing activities
Property and equipment acquisitions		(60,912	)		(45,313	)		(38,374	)
Proceeds relating to capital reimbursements		6,898			—			—
Proceeds relating to notes receivable from sale of property and equipment		4,890			—			—
Proceeds relating to settlement of capital claims		—			—			2,500
Proceeds relating to sale of property and equipment		3,058			1,150			3,571
Net cash and cash equivalents used in investing activities	$	(46,066	)	$	(44,163	)	$	(32,303	)

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	Year ended December 31,
	2007			2006			2005
Cash flows from financing activities
Payment of partner distributions	$	(113,318	)	$	(61,894	)	$	(52,610	)
Distributions of minority interest in equity of UCRP		(3,545	)		(2,962	)		(3,606	)
Contributions to investments in unconsolidated entities		(3,655	)		—			—
Payments on long-term borrowings, capital lease and financing obligations, net		(13,677	)		(36,989	)		(6,298	)
Payments for financing costs		—			—			(42	)
Net cash and cash equivalents used in financing activities		(134,195	)		(101,845	)		(62,556	)
Net increase in cash and cash equivalents		61,257			19,784			22,954
Cash and cash equivalents at beginning of year		66,617			46,833			23,879
Cash and cash equivalents at end of year	$	127,874		$	66,617		$	46,833
Supplemental disclosure of cash flow information
Cash paid for interest, including interest rate swaps	$	100,802		$	109,056		$	91,941
Supplemental disclosures of noncash information
Accrual of partner distribution to partners’ equity		11,610			—			—
Notes payable issued for purchase of property and equipment		—			642			565
Financing obligations		43,290			—			—
Increase/(decrease) of property and equipment in accrued liabilities		20,851			(3,901	)		(7,933	)
(Decrease)/Increase in interest rate swap asset		(4,050	)		2,214			1,836
(Increase)/decrease in interest rate swap liability		(5,106	)		88			5,643
Disposal of fully depreciated assets		42,002			4,054			2,057
Notes receivable issued for sale of property and equipment		—			4,890			—

See accompanying notes.

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UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business

Ownership

Universal City Development Partners, LP (“UCDP LP”) was a limited partnership organized in Delaware. Effective June 5, 2002, UCDP LP became organized in Florida and changed its legal name to Universal City Development Partners, Ltd. (“UCDP LTD” or the “Company”). Through Universal City Florida Holding Co. I and Universal City Florida Holding Co. II (collectively, “Holdings”), UCDP LTD’s ultimate owners (the “Partners”), each having a 50% interest in us are Universal City Property Management II, LLC (“Universal CPM”) and Blackstone Capital Partners (“Blackstone”). Universal CPM is a wholly owned subsidiary of Vivendi Universal Entertainment LLLP (“Vivendi Universal Entertainment”), an affiliate of Universal Studios, Inc. (“USI”), which effective May 11, 2004, became an indirect subsidiary of NBC Universal, Inc. Both Partners share in profits and losses, contributions and distributions of UCDP LTD in accordance with their ownership percentage. Subject to certain exceptions, neither Partner may transfer or sell their respective partnership interests, sell, pledge or encumber significant assets, issue securities or admit any additional partner or change the primary business without the consent of the other Partner.

Prior to May 11, 2004, Vivendi Universal Entertainment was owned by Vivendi Universal, S.A. (“Vivendi”). On May 11, 2004, General Electric Company (“GE”), National Broadcasting Company Holding, Inc., National Broadcasting Company, Inc. (“NBC”), Vivendi, and Universal Studios Holding III Corp., concluded a transaction pursuant to which GE and Vivendi combined the respective businesses of NBC, Universal Studios, Inc. (“USI”), Universal Pictures International Holdings B.V., and Universal Pictures International Holdings 2 B.V. and their respective subsidiaries (the “NBC Universal Transaction”). In connection with the NBC Universal Transaction, NBC changed its corporate name to NBCU. GE owns 80% of NBCU, and Vivendi controls the remaining 20%. After this transaction, NBCU indirectly owned approximately 94.5% of Vivendi Universal Entertainment which indirectly owns a 50% interest in UCDP LTD (through Holdings). Vivendi Universal Entertainment is a non-wholly owned subsidiary of USI and certain of its affiliates, which are in turn indirect wholly owned subsidiaries of NBCU. The 50% ownership interest in UCDP LTD held by Blackstone was not affected by the NBC Universal Transaction.

During June 2005, NBCU purchased the 5.5% minority interest in Vivendi Universal Entertainment. As a result of the transaction, Vivendi Universal Entertainment is now wholly owned by NBCU.

Operations

UCDP LTD owns and operates two themed attractions, Universal’s Islands of Adventure (“IOA”) and Universal Studios Florida (“USF”); an entertainment complex, Universal CityWalk Orlando (“CityWalk”); sound stages; and movie and television production facilities all located in Orlando, Florida.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the amounts of UCDP LTD and all of its subsidiaries, Universal City Travel Partners d/b/a Universal Parks & Resorts Vacations (“UPRV”), UCDP Finance, Inc., and Universal City Restaurant Partners, Ltd. (“UCRP”) (collectively, “UCDP”). All significant intercompany balances and transactions have been eliminated upon consolidation.

UCRP is deemed a variable interest entity in accordance with Financial Accounting Standards Board issued Interpretation 46R (“FIN 46(R)”), Consolidation of Variable Interest Entities, which is owned 50% by UCDP. Accordingly, the consolidated financial statements of UCDP include the results of UCRP for all years presented. Total assets of UCRP at December 31, 2007 and 2006, were approximately $16,183,000 and $18,028,000, respectively. Total revenues of UCRP during the years ended December 31, 2007, 2006 and 2005, were approximately $29,287,000, $27,421,000 and $26,905,000, respectively, and were included in other operating revenues in the accompanying financial statements.

Use of Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires management of UCDP to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Reclassification

Certain items in the prior years’ consolidated financial statements have been reclassified to conform to the 2007 presentation. Various components of merchandise revenue and other revenue have been reclassified to other theme park related revenue in the consolidated statement of operations to more clearly isolate components of our theme park business. The 2005 distributions from unconsolidated entities, net on the consolidated statement of cash flows, have been reclassified to the operating activities section, in accordance with Statement of Financial Accounting Standards No. 95, “Statement of Cash Flows”. Additionally, the non-cash portion of property and equipment included in accrued liabilities has been reclassified and reflected as non-cash transactions for 2006 and 2005. These reclassifications had no impact on net income or partners’ equity.

Cash and Cash Equivalents

Cash and cash equivalents consist of amounts held as bank deposits and marketable securities with original maturities of 90 days or less.

Accounts Receivable and Allowance for Doubtful Accounts

UCDP carries its accounts receivables at their net realizable value thereby making judgments regarding the collectability of outstanding accounts receivables and providing appropriate allowances when collectability becomes in doubt. In addition, UCDP provides a general allowance for outstanding receivables in good standing based on historical bad debt experience. The allowance for doubtful accounts was approximately $767,000 and $605,000, respectively, at December 31, 2007 and 2006.

Inventories

Inventories, principally spare parts, merchandise and food, are stated at the lower of cost or market. Cost is determined using the average cost method. UCDP records a provision for the value of inventory, which has been deemed to have a realizable value that is less than the average cost.

Investments in Unconsolidated Entities

In conjunction with the construction and operation of CityWalk, UCDP has joint venture relationships in which it shared in construction costs and the profits and losses, as defined in each separate agreement. After an evaluation under FIN 46(R), where the venture is not considered to be a variable interest entity or UCDP is not considered to be the primary beneficiary, the interest in the joint venture is accounted for under the equity method in the accompanying consolidated financial statements. The investment in unconsolidated entities is recorded as UCDP’s share of construction costs, adjusted for profits and losses, distributions and contributions for each joint venture.

Property and Equipment

Property and equipment is recorded at cost and is depreciated on a straight-line basis over the estimated useful lives of those assets as follows:

	Useful Life (In Years)
Land improvements	15
Buildings and building improvements	20-40
Equipment, fixtures and furniture	3-20

Maintenance and repairs are charged directly to expense as incurred.

Impairment of Long-Lived Assets and Intangibles

UCDP follows Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting For the Impairment or Disposal of Long-Lived Assets (“SFAS 144”). SFAS 144 requires that one accounting impairment model be used for long-lived assets to be disposed of by sales, whether previously held and used or newly acquired, and broadens the presentation of discontinued operations to include more disposal transactions.

UCDP reviews its long-lived assets and identifiable intangibles for impairment whenever circumstances indicate that the carrying amount of an asset may not be recoverable. If the review reveals impairment as indicated based on undiscounted cash flows, the carrying amount of the related long-lived assets or identifiable intangibles are adjusted to fair value. There have been no material impairment losses recognized on UCDP’s long-lived assets or identifiable intangibles.

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Intangible Assets

Intangible assets primarily consist of the rights to use certain characters and trademarks. Intangible assets are recorded at cost and amortized on a straight-line basis over a period ranging from 10 to 20 years, which results in a weighted average life of 11 years. Intangible assets totaled $55,107,000 and $13,283,000, respectively, as of December 31, 2007 and 2006. This included $12,570,000 and $11,104,000 in accumulated amortization, respectively, as of December 31, 2007 and 2006. Amortization expense amounted to $1,466,000, $1,446,000 and $1,446,000 during the years ended December 31, 2007, 2006 and 2005, respectively. Amortization of existing intangible assets will be approximately $1,981,000 and $2,151,000, respectively, for the years ending December 31, 2008 and 2009 and $5,441,000 for each of the following three years.

Capital Reimbursements

UCDP receives capital reimbursements for research and development costs on existing rides when VUE licenses the technology and schematics for various components of those rides either to affiliates of VUE or licensees of other Universal theme parks. Under this arrangement, UCDP collected approximately $6,898,000 during the year ended December 31, 2007, stemming from Universal licensed theme parks under construction in Singapore and Dubai. These costs are accounted for by reducing the cost basis of the various asset components along with the corresponding adjustment to future depreciation over the remaining life of the asset. In instances where the individual asset components are, or become fully depreciated, the remaining allocation is recorded as other income. As such, approximately $217,000 was recorded as other income during the year ended December 31, 2007. UCDP did not receive any capital reimbursements during the years ended December 31, 2006 and 2005.

Financing Obligations

Financing obligations represent the net present value of future payment obligations of certain intellectual property rights acquired under long term contracts. These obligations increase monthly for imputed interest costs and decrease when payments are made. Financing obligations are reported on the consolidated balance sheet under capital lease and financing obligations.

Assets held for sale

At the time management deems a property as held for sale, the cost basis of the land and any improvements made to that parcel are reclassified to assets held for sale on the balance sheet. Additionally, land sold in any year presented is reclassified in each prior year presented to assets held for sale. As of December 31, 2007, two properties were considered held for sale and are expected to close within twelve months.

Deferred Finance Costs

UCDP capitalizes certain costs related to the issuance of debt. The amortization of such costs is recognized as interest expense based on the effective interest method over the term of the respective debt issuance. Deferred finance costs totaled $14,592,000 and $19,756,000, respectively, as of December 31, 2007 and 2006. This included $48,400,000 and $43,236,000 in accumulated amortization, respectively, as of December 31, 2007 and 2006. Amortization expense amounted to $5,164,000, $5,374,000 and $5,251,000, respectively, during the years ended December 31, 2007, 2006 and 2005.

Revenue Recognition

Revenue from theme park pass sales is recognized at the time passes are redeemed. Revenue from theme park annual pass sales is recognized over the period of benefit, which is typically one year from the initial redemption date. Revenue from food and beverage and merchandise sales is recognized at the time of sale. Unearned revenue primarily consists of amounts received from the sale of theme park passes, which have not yet been redeemed. In addition to unredeemed passes, unearned revenue includes up-front payments related to CityWalk venues, advance sales from our travel company and corporate sponsorships, which are recognized into revenue over the period of benefit.

Other Theme Park Related Revenues

Other theme park related revenues, which consist primarily of Universal Express Plus (“UEP”) sales, aged pass sales, theme park corporate special events and the parking facility, are recognized as earned. UCDP hosts special events for corporate guests whereby a portion of the theme park is rented for corporate functions. UEP is a pass that allows guests to experience reduced wait times at certain rides and attractions.

Other Operating Revenues

Other operating revenues, which consist primarily of sales generated by CityWalk, UPRV and hotel rent received from our on-site hotels, are recognized as earned.

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Advertising, Sales and Marketing Costs

The costs of advertising, sales and marketing are charged to operations in the year incurred. Production costs of advertising are charged to operations at the first showing of the related advertisement. Total costs of advertising, sales and marketing amounted to approximately $78,821,000, $77,458,000 and $72,804,000, respectively, during the years ended December 31, 2007, 2006, and 2005, and are primarily included in theme park selling, general and administrative expenses in the accompanying consolidated statements of operations.

Sales Taxes

Sales taxes collected from the sale of theme park passes, food and beverage and merchandise are reported net in the statement of operations, as the taxes collected are passed through to the applicable taxing authorities.

Theme Park Cost of Products Sold

Theme park cost of products sold consists of payroll and product costs related to the sale of food and beverage and merchandise at the theme parks.

Other Costs and Operating Expenses

Other costs and operating expenses consist primarily of costs incurred by CityWalk, UPRV, UCRP and corporate special events.

Financial Instruments

The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the immediate or short-term maturity of these financial instruments.

The estimated fair values of other financial instruments subject to fair value disclosures, determined based on quotes from major financial institutions, and the related carrying amounts are as follows (in thousands):

	December 31, 2007				December 31, 2006
	Carrying Value		Fair Value		Carrying Value			Fair Value
Long-term borrowings	$	1,007,126	$	1,015,050	$	1,006,364		$	1,045,345
Interest rate swap assets		—		—		(4,050	)		(4,050	)
Interest rate swap liabilities		5,106		5,106		—			—
Total	$	1,012,232	$	1,020,156	$	1,002,314		$	1,041,295

Concentration of Credit Risk

Financial instruments that potentially subject UCDP to concentrations of credit risk consist primarily of accounts receivable and interest rate swaps. The credit risk associated with accounts receivable is limited by the volume of customers as well as the establishment of credit limits. UCDP is exposed to credit loss in the event of nonperformance by the counterparties to interest rate swap transactions. The counterparties to these contractual arrangements are major financial institutions that meet UCDP’s credit standards with which UCDP also has other financial relationships. UCDP does not anticipate nonperformance by such parties.

Interest Rate Swaps

UCDP utilizes interest rate swap agreements as a risk management tool to manage a portion of its interest rate exposures. The principal objective of the swap agreements is to minimize the risks and costs associated with financial activities. UCDP does not use financial instruments for trading purposes. UCDP specifically designates interest rate swap hedges of outstanding debt instruments and recognizes interest differentials in the period they occur.

UCDP follows SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”), as amended by SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”, to account for its interest rate swaps. This standard established accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives), and for hedging activities. It requires that the entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those assets at fair value. The fair values are the estimated amounts that UCDP would pay or receive upon termination of the swap agreements at the reporting date, taking into account current interest rates and the current creditworthiness of the counterparties. Changes in the underlying market value of swap arrangements that qualify as cash flow hedging activities under SFAS 133 are recognized as other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income and changes in partners’ equity. Changes in the underlying market value of swap arrangements that do not qualify as hedging activities under SFAS 133 are recognized as a change in the fair value of interest rate swaps in the

51

accompanying consolidated statements of operations. Additionally, the accumulated other comprehensive income (loss) related to interest rate swaps that become ineffective is amortized on a straight-line basis through the change in the fair value of interest rate swaps in the accompanying consolidated statements of operations.

We are exposed to credit loss in the event of nonperformance by the other party to the derivative financial instruments. We limit this exposure by entering into agreements directly with a number of major financial institutions that meet our credit standards and that are expected to satisfy fully their obligations under the contracts.

Income Taxes

No provision for income taxes has been recorded in the consolidated financial statements, as the owners are required to report their share of UCDP’s earnings or losses in their respective income tax returns. The Partners’ tax returns and the amounts of allocable income or loss are subject to examination by federal and state taxing authorities. If such examinations result in changes to income or loss, the tax liability of the Partners could be changed accordingly.

Certain transactions of UCDP may be subject to accounting methods for income tax purposes which differ from the accounting methods used in preparing these consolidated financial statements in accordance with United States generally accepted accounting principles. Accordingly, the net income or loss of UCDP reported for income tax purposes may differ from the balances reported for those same items in the accompanying consolidated financial statements. The difference in the assets as reported in the consolidated financial statements at December 31, 2007 and as reported for tax purposes is approximately $984,456,000, while the difference in liabilities is approximately $8,804,000. The majority of the differences arise primarily due to the use of different estimated useful lives for property and equipment for income tax reporting purposes as compared to those used for financial reporting purposes.

Litigation

UCDP is currently involved in certain legal proceedings and has accrued its estimate of the probable legal and settlement costs for the resolution of these claims. If UCDP believes that costs from these matters are probable and the amount of the costs can be reasonably estimated, it will accrue the estimated costs. If UCDP believes a loss is less than probable but more than remote, it will disclose the nature of the matter and, if possible, disclose the estimate of the possible loss (see note 13).

Segments

UCDP operates and tracks its results in one reportable segment in accordance with the aggregation provision of SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.”

Recently Issued Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. This statement does not require any new fair value measurements; rather, it applies under other accounting pronouncements that require or permit fair value measurements. The provisions of this statement are to be applied prospectively as of the beginning of the fiscal year in which this statement is initially applied, with any transition adjustment recognized as a cumulative-effect adjustment to the opening balance of retained earnings. The provisions of SFAS 157 are effective for the fiscal years beginning after November 15, 2007; therefore, we anticipate adopting this standard as of January 1, 2008. UCDP does not believe the adoption of SFAS 157 will have a material impact on its financial position, results of operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value. SFAS 159 is effective for financial statements issued for fiscal years beginning after November 15, 2007, or our first fiscal quarter of 2008. Early adoption is permitted. UCDP does not believe the adoption of SFAS 159 will have a material impact on its financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141R”), which replaces SFAS No. 141. SFAS 141R establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any resulting goodwill, and any non-controlling interest in the acquiree. The Statement also provides for disclosures to enable users of the financial statements to evaluate the nature and financial effects of the business combination. SFAS 141R is effective for financial statements issued for fiscal years beginning after December 15, 2008, or our first fiscal quarter of 2009 and must be applied prospectively to business combinations completed on or after that date. UCDP does not believe the adoption of SFAS 141R will have a material impact on its financial position, results of operations or cash flows.

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In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements — an amendment of Accounting Research Bulletin No. 51” (“SFAS 160”), which establishes accounting and reporting standards for non-controlling interests (“minority interests”) in subsidiaries. SFAS 160 clarifies that a non-controlling interest in a subsidiary should be accounted for as a component of equity separate from the parent’s equity. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, or our first fiscal quarter of 2009 and must be applied prospectively, except for the presentation and disclosure requirements, which will apply retrospectively. We are currently evaluating the potential impact of the adoption of SFAS 160 on our financial position, results of operations and cash flows.

3. Inventories

UCDP’s inventories are comprised of the following components as of December 31, (in thousands):

	2007			2006
Merchandise	$	12,648		$	12,709
Food and beverage		3,944			4,259
Operating supplies and maintenance parts		27,028			28,051
Less: reserves		(1,380	)		(1,203	)
Total	$	42,240		$	43,816

During the years ended December 31, 2007, 2006 and 2005, UCDP used approximately $2,642,000, $1,065,000 and $2,432,000, respectively, of the inventory reserves.

4. Investments in Unconsolidated Entities

As of December 31, 2007, UCDP had the following investments in unconsolidated entities:

Name	Year of inception	Ownership interest as of December 31, 2007	Description
NASCAR Café/Orlando Joint Venture (1)	1997	17%	Operates a restaurant in CityWalk.
Universal/Cineplex Orlando Joint Venture (2)	1997	50%	Operates a 20 screen cinema in CityWalk.
Uniman, LLC (3)	2006	50%	Licenses the rights to produce a live Blue Man Group show.

(1) NASCAR Café/Orlando Joint Venture (“NASCAR”), is 17% owned by UCDP and 83% owned by NC Orlando, LLC. The entity operates the NASCAR Café restaurant located within CityWalk. In February 2007, the renovation of the NASCAR Café was completed and re-opened as the NASCAR Sports Grille. UCDP did not participate financially in the cost of the renovation, thus in accordance with an amended joint venture agreement, UCDP’s ownership percentage decreased from 25% to 17% on the day of re-opening. UCDP’s interest in NASCAR is accounted for under the equity method.

(2) Universal/Cineplex Orlando Joint Venture (“Cineplex”), is 50% owned by UCDP and 50% owned by Plitt Theatres, Inc. The entity operates a 20-screen Cineplex located within CityWalk. UCDP’s interest in Cineplex is accounted for under the equity method.

(3) Uniman, LLC (“Uniman”), is 50% owned by UCDP and 50% owned by Zebra Horse, LLC, an affiliate of Blue Man Group Productions, Inc. The entity presents a live theatrical production that combines music, comedy and multimedia artistry to create a unique form of entertainment at a theater within CityWalk. The show opened to the public in June 2007. UCDP’s interest in Uniman is accounted for under the equity method.

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5. Long-Term Borrowings

Indebtedness consisted of the following as of December 31 (dollars in thousands):

	Interest Rate		Maturity Date		2007		2006
Senior secured credit facility	(1	)	(2	)	$	509,000	$	509,000
Fixed rate senior notes (“April 2010 notes”)	11.75	%	April 1, 2010			500,000		500,000
Equipment financing note	5.35	%	April 1, 2007			—		75
Gross principal payable						1,009,000		1,009,075
Unamortized discounts						1,874		2,711
Total debt					$	1,007,126	$	1,006,364

(1) The senior secured credit facility bears interest based at UCDP’s option on either the prime rate publicly announced by Morgan Guaranty Trust Company of New York plus 100 bps, or at the 3-month LIBOR plus 175 bps.

(2) The maturity date of the senior secured credit facility is June 6, 2011, however, it is repayable in full at December 1, 2009, or January 1, 2010, respectively, if the April 2010 or May 2010 notes are not refinanced or repaid in full prior to such date.

On December 9, 2004, the senior secured credit facility was refinanced (“2004 Amendment”), resulting in amended and restated senior secured credit facilities consisting of a $550,000,000 term loan and a $100,000,000 revolving credit facility. In addition, UCDP may borrow up to $200,000,000 of incremental debt from time to time, with modified covenants.

The senior secured credit facility consists of both term loan and revolving credit components with a consortium of lenders led by JPMorgan. The revolving credit component had a maximum available credit line of approximately $100,000,000 at December 31, 2007 and 2006. On those dates, no funds were outstanding on the revolving credit facility. Additionally, a commitment fee of 0.5% per annum is payable on the unused amounts of the revolving credit facility.

The senior secured credit facility is secured by a mortgage on substantially all of UCDP’s real and personal property. Currently, the senior secured credit facility is repayable in quarterly installments of 0.25%, which commenced on March 31, 2005, and ends on December 31, 2010. This equates to annual principal payments of 1.0% with the balance due in 2011. Accordingly, UCDP paid regular principal payments of $5,500,000 during the year ended December 31, 2006 in connection with the senior secured credit facility’s principal amortization schedule. Additionally, during 2006, UCDP made a voluntary prepayment in the amount of $30,000,000; effectively prepaying all principal amounts that would have been due up until the facility’s maturity date. As such, no principal payment was due nor paid during 2007. The senior secured credit facility also requires a prepayment of 50% of UCDP’s annual excess cash flow if certain financial ratios were not met beginning in 2005. These ratios were met during 2007 and 2006. As such, no such excess cash flow payment was required as of December 31, 2007 and 2006. Furthermore, all prepayments are applied in forward order of maturity. The senior secured credit facility contains certain customary limitations. The most restrictive limitations relate to the incurrence of liens, additional indebtedness and maintenance of funded debt and interest coverage ratios, among others.

Scheduled maturities of amounts drawn at December 31, 2007 are as follows (in thousands):

Fiscal Year	Amount
2008	$	—
2009		—
2010		500,000
2011		509,000
	$	1,009,000

UCDP capitalizes interest on significant capital projects, which require an extended period of time to complete. UCDP capitalized interest of approximately $1,848,000, $817,000 and $244,000, respectively, during the years ended December 31, 2007, 2006, and 2005.

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6. Interest Rate Swaps

The following table summarizes the notional values and fair values of our derivative financial instruments as of December 31, 2007 (dollars in thousands):

Notional value		Expiration date	Fair value			Interest rate		Accounting treatment	Terms
$	200,000	November 20, 2009	$	(1,382	)	4.77	%	OCI	Fixed
	175,000	October 15, 2009		(3,724	)	4.41	%	OCI	Fixed
$	375,000		$	(5,106	)

The following table summarizes the changes in fair value of our interest rate swaps during the years ended December 31, (in thousands):

	2007					2006					2005
	Recorded in statement of operations		Recorded in other comprehensive income (loss)			Recorded in statement of operations			Recorded in other comprehensive income (loss)		Recorded in statement of operations			Recorded in other comprehensive income (loss)
Swap #1 (1)(2)	$	—	$	—		$	30		$	—	$	1,270		$	—
Swap #2 (1)(2)		—		—			30			—		1,273			—
Swap #3 (1)(2)		—		—			30			—		1,291			—
Swap #4 (1)(2)		—		—			30			—		1,283			—
Swap #5 (2)		—		—			(36	)		—		(895	)		—
Swap #6 (3)		—		—			638			—		788			—
Swap #7		—		(4,195	)		—			355		—			10
Swap #8		—		(4,961	)		—			1,225		—			2,459
Ineffective amortization(1)		—		—			(222	)		222		(5,401	)		5,401
Total	$	—	$	(9,156	)	$	500		$	1,802	$	(391	)	$	7,870

(1) Swaps #1 through #4 became ineffective as the result of the refinancing in December 2004.

(2) These swaps expired during 2006.

(3) This swap expired during 2007.

7. Operating Lease Obligations

UCDP has entered into various leases for equipment, office and warehouse space. The leases are noncancelable operating leases which expire at various dates through 2013.

The following is a five-year schedule of minimum future rental payments under the non-cancelable operating leases at December 31, 2007 (in thousands):

Fiscal Year	Amount
2008	$	3,462
2009		2,995
2010		2,384
2011		1,970
2012		1,111
Thereafter		275
	$	12,197

During the years ended December 31, 2007, 2006, and 2005, respectively, UCDP incurred rent expense under the operating leases of approximately $3,406,000, $3,318,000 and $3,837,000, which is included in the related costs and operating expenses in the accompanying consolidated statements of operations.

8. Capital Leases and Financing Obligations

On May 25, 2007, UCDP entered into an agreement with Warner Bros. Consumer Products Inc. (“WB”), pursuant to which UCDP licensed certain rights to the characters and other intellectual property contained in the Harry Potter™ books and motion pictures (the

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“WB Agreement”). This license will be used for appropriately themed attractions, merchandise stores and food venues which will be incorporated in a new “island” that will include a re-themed portion of one of the “islands”, and additional undeveloped real estate at IOA. These attractions should be open by summer of 2010. Under the terms of the agreement, we have the right to use the licensed property until approximately ten years after the scheduled grand opening date of the attractions. We also have the ability to extend the term for two successive five-year renewal periods. Our use of the licensed property for the attractions, theming, promotions, merchandise and other purposes is subject to approval of WB. The agreement provides us with the exclusive right to use the licensed property in theme parks, amusement parks, water parks and stand-alone themed venues similar to those found in a theme park within a radius of 250 miles around Universal’s IOA. UCDP will pay WB various license fees, merchandise royalty payments, and other payments throughout the term of the agreement.

UCDP has other intellectual property agreements. UCDP also leases certain equipment under capital leases. Intangible assets and equipment, fixtures and furniture included approximately $42,590,000 and $5,233,000, related to financing obligations and capital leases as of December 31, 2007 and 2006, respectively. This included $0 and $4,753,000 in accumulated depreciation and amortization, respectively, as of December 31, 2007 and 2006. Depreciation and amortization expense related to assets under financing obligations and capital leases amounted to $481,000, $587,000 and $796,000, respectively, during the years ended December 31, 2007, 2006, and 2005. At December 31, 2007, future minimum payments due under financing obligations and capital leases totaled approximately $31,488,000 (net of $15,637,000 in interest). The net present value of future minimum payments include $375,000, $5,151,000, $3,747,000, $3,482,000, $3,236,000 and $15,497,000 due in the years ending December 31, 2008, 2009, 2010, 2011, 2012, and years subsequent to 2012, respectively.

9. Compensation Plans

Deferred Compensation Plan

UCDP has a deferred compensation plan (the “Plan”) that permits eligible executives and members of management to defer a specified portion of their compensation. Under the plan, employees may defer up to 80% of base salary and/or up to 100% of bonus compensation. The deferred compensation, together with limited partnership matching contributions, which vest immediately, accrue earnings based on elected investment alternatives. Employees are eligible to receive distributions at death or at termination of their employment or after specified waiting periods, as they elect at the time of deferral. Funds are also available at their election at retirement, at termination of their employment, at death or during specified in-service periods, or in the event of an approved unforeseeable financial emergency. At December 31, 2007 and 2006, respectively, UCDP had accrued approximately $8,915,000 and $7,699,000 for its obligations to participating employees under the Plan, which is included in other long-term liabilities in the accompanying consolidated balance sheets. To fund the Plan, UCDP purchased partnership-owned life insurance contracts. The cash surrender value of these policies was approximately $8,998,000 and $7,757,000, respectively, at December 31, 2007 and 2006, and is included in other assets in the accompanying consolidated balance sheets.

Long-Term Growth Plan

On September 6, 2005, the Park Advisory Board approved a Long-Term Growth Plan (the “2007 Growth Plan”) effective as of January 1, 2005. The 2007 Growth Plan also provides key employees the opportunity to benefit from UCDP’s growth in value. Employees who are eligible to participate in the plan are limited to UCDP’s Executive Committee members, UCDP’s business unit heads, and a select group of Universal Parks & Resorts and other UCDP executives. Under the plan, which is administered by the Park Advisory Board, each participant is granted one or more Value Appreciation Rights (“VARs”). The value of a VAR is generally based on the growth in market value of the equity interests of the Partners in UCDP. A pool is established for valuing the VARs and such pool is equal to 2% of the growth in UCDP’s equity value. The value of a VAR is calculated by dividing the total pool value by the total number of outstanding VARs. Each VAR will be triggered and automatically exercisable upon the earlier of a change in UCDP’s ownership structure which results in NBCU owning less than 50%, or January 1, 2008. If a change of ownership occurs, the payout value is calculated based on the sales price of this ownership change. Since a change in ownership did not occur, the payout value was calculated based on an earnings multiple from financial results generated during 2007, subject to specific caps so that the payout value for each participant is no more than 100% of their total compensation as of January 1, 2005. UCDP accrued the estimated payout value of the 2007 Growth Plan straight line over its term. Under the plan, all awards are paid in cash. As of December 31, 2007 and 2006, UCDP had approximately $8,571,000 and $5,072,000 respectively, accrued under this plan. The amount accrued for at December 31, 2007 was paid in February 2008.

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10. Accounts Payable and Accrued Liabilities

The following presents major components of accounts payable and accrued liabilities as of December 31, (in thousands):

	2007		2006
Accounts payable		11,602	$	6,603
Capital expenditures		24,817		3,966
Marketing and advertising		10,322		5,444
Interest		19,844		21,788
Compensation and benefits		32,826		26,131
Operating accruals		17,716		14,268
Consulting fees		4,464		4,244
Property and sales tax		2,301		1,507
Other		6,978		5,114
Total	$	130,870	$	89,065

11. Related Party Transactions

Vivendi Universal Entertainment’s Special Fee

Under the terms of UCDP’s partnership agreement, a special fee is payable to Vivendi Universal Entertainment through Universal CPM equal to 5% of certain revenue, as defined, generated by Universal Studios Florida and Universal’s Islands of Adventure. The special fee amounted to approximately $38,419,000, $35,300,000 and $35,251,000, respectively, during the years ended December 31, 2007, 2006, and 2005. Interest expense incurred on the deferred special fee, including the long term portion, was approximately $7,541,000, $7,164,000 and $6,066,000, respectively, during the years ended December 31, 2007, 2006, and 2005.

Concurrent with the 2004 Offering and the 2004 Amendment, Vivendi Universal Entertainment and Blackstone entered into an agreement pursuant to which Blackstone acknowledged, as between the partners, that the equity distribution condition to the payment of Universal’s Islands of Adventure special fees was satisfied. Accordingly, going forward, the special fee related to Universal’s Islands of Adventure can also be paid if certain leverage ratios are met. These ratios were met as of UCDP’s fiscal quarter end dates in 2007 and 2006. In addition, Holdings purchased from Vivendi Universal Entertainment the right to receive from UCDP the most recently accrued $70,000,000 of deferred special fees relating to Universal’s Islands of Adventure for $70,000,000. Also, $50,000,000 of the next most recently accrued deferred special fees related to Universal’s Islands of Adventure and Universal Studios Florida was forgiven and treated as an equity contribution by both Vivendi Universal Entertainment and Blackstone. Pursuant to certain subordination aspects of UCDP’s senior secured credit facility and the UCDP notes, the special fee may not be paid if there is an event of default (or to the knowledge of UCDP’s officers a default).

During the years ended December 31, 2007 and 2006, UCDP paid total fees of approximately $38,471,000 and $35,893,000, respectively, to Vivendi Universal Entertainment. The amount due to Vivendi Universal Entertainment as of December 31, 2007 and 2006 approximated $8,967,000 and $8,214,000. The balances payable as of December 31, 2007 and 2006 were classified as current. In addition, at December 31, 2007 and 2006, we had accrued $87,608,000 and $80,873,000 related to the long-term portion of fees payable to an affiliate of Vivendi Universal Entertainment.

Partner Distributions

UCDP paid distributions to the Partners of $113,318,000, $61,894,000, and $52,610,000, respectively, during the years ended December 31, 2007, 2006, and 2005. Additionally, at December 31, 2007, we have accrued $11,610,000 in distributions that will be paid in April 2008 to the Partners for their expected payments of income taxes based on our financial results.

Other Partner Matters

Pursuant to a right of first refusal provision in an amended and restated partners’ agreement between Blackstone and Vivendi Universal Entertainment (the “partners’ agreement”), at any time after December 31, 2007, if either Blackstone or Vivendi Universal Entertainment desires to sell its ownership interest in Holding I and Holding II, it shall make a binding offer, specifying the proposed sale price, to sell to the other its entire interest in each of Holding I and Holding II. The non-offering partner will then have 90 days after receipt of an offer to accept the offer to sell. If the other party declines the opportunity to purchase, the offering party shall market both parties’ interest in Holdings to third parties, and both parties are required to sell their interests if a third party offers a price that is at least 90% of the price for both parties’ interests that is imputed from the offer made by the first party to the second party (i.e., as long as Vivendi Universal Entertainment and Blackstone each own 50% of Holdings, then both parties are required to sell to a third party that offers at least 180% of the price quoted by either party to the other party). If the interests in Holdings are not sold to a third party in connection with the marketing process, then the offering party shall be prohibited from making another offer to the other party for a period of one year from expiration date of the 90-day offer period, and during such period, the other party may

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agree to sell its ownership interest without restriction. If Blackstone exercises its rights under this provision by accepting a binding offer, it may result in 100% control and ownership of Holdings being acquired by Blackstone, which could pose a number of risks to our business. UCDP licenses the right to use the “Universal” name and a substantial number of intellectual properties as street entertainment characters and as themed elements in rides and attractions from the Universal License Parties. See “Item 1: Business—Intellectual property.” Our right to use the “Universal” name in connection with Universal Orlando continues indefinitely at no cost to us until the latest of (i) 30 months after a change of control (as described in UCDP’s partnership agreement), (ii) 30 months after any termination of the WB Agreement prior to its scheduled expiration, or (iii) the expiration of the WB Agreement in accordance with its terms. Under the Universal License Agreement, a change of control is described as when (a) Universal CPM is no longer a wholly owned subsidiary of USI, Vivendi Universal Entertainment, or any of their respective affiliates, or (b) the Universal License Parties do not own any interest in us. A change of control under UCDP’s license agreements, such as Blackstone or a third party unaffiliated with the Universal License Parties acquiring all of the partnership interests in us, would not necessarily constitute a change of control under the indentures governing the April 2010 notes and the May 2010 notes. If we are unable to use the “Universal” name, and if we are unable to partner with another similar, recognizable brand, the name recognition of our theme parks could be impaired.

Entry into a Contribution Agreement

Effective February 29, 2008, the partners entered into a contribution agreement (the “2008 Contribution Agreement”) with UCDP, allowing UCDP to request, through Holdings, cash contributions not to exceed a total of $50,000,000 to fund ongoing capital expenditure needs. The capital expenditures funded from such capital contributions will not count against the limitations on capital expenditures under UCDP’s existing bank credit agreement with JPMorgan Chase. In connection with the 2008 Contribution Agreement, Blackstone amended its loan with JPMorgan Chase and another Lender to allow for the capital contribution.

Reimbursement of UCDP’s Manager’s Costs

Vivendi Universal Entertainment provides UCDP with services relating to the management and operation of the theme parks, the costs of which are reimbursed to Vivendi Universal Entertainment under the terms of UCDP’s partnership agreement. These services include: blanket insurance coverage; creative design of new rides and attractions; procurement of merchandise; management of corporate sponsorship; shared services of a number of senior executives; and other miscellaneous services. These costs are allocated to UCDP by Vivendi Universal Entertainment. Insurance premiums are allocated based upon relative payroll, revenues and claims experience. Creative design labor is allocated based upon time spent on UCDP projects. Procurement of merchandise allocation involves the allocation of costs between international and domestic businesses and then among the domestic properties based upon proportionate share of retail revenues. Corporate sponsorship expenses are allocated in proportion to the share of corporate sponsorship revenues. Corporate sponsorship revenues are allocated to the business units that benefit from the sponsorship. Labor cost for shared senior executives is allocated based upon estimated time incurred. UCDP receives an allocation of other shared services provided based upon the relative number of transactions processed. Universal Parks & Resorts, a division of Vivendi Universal Entertainment that administers the allocations, has indicated to UCDP that their allocation methods are reasonable. During the years ended December 31, 2007, 2006, and 2005, respectively, UCDP incurred approximately $22,300,000, $21,367,000 and $21,763,000 related to these services.

Advisory Services Agreements

UCDP has an Advisory Services Agreement (“Services Agreement”) in which the Partners provide UCDP with advisory and consulting services in connection with the ongoing strategic and operational oversight of UCDP’s affairs in such areas as financing structures, public and private offerings of debt and equity securities and property dispositions and acquisitions. In connection with the Services Agreement, UCDP pays each Partner $1,250,000 annually. During the years ended December 31, 2007, 2006, and 2005, UCDP incurred $2,500,000 per year related to the Services Agreement. These amounts were included in other costs and operating expenses in the accompanying consolidated statements of operations.

Directors Fees

In 2007, the Agreement of Limited Partnership of Universal City Development Partners, Ltd., was amended to add a provision which permits VUE and Blackstone to be reimbursed up to $125,000 each for payments made to their respective, appointed representatives to the Park Advisory Board, who function effectively as Directors of the Partnership. For the year ending December 31, 2007, UCDP paid $250,000 under this amended provision.

Transactions with UCF Hotel Venture

UCDP has a lease agreement with UCF Hotel Venture (“UCF HV”), an entity partially owned by Vivendi Universal Entertainment. The lease is for the land under three hotel sites, which requires lease payments based on a percentage of hotel revenue. UCF Hotel Venture is also required to pay UCDP an additional ground rent based on their cash available after their partners’ distributions, subject to an annual cap. The cash flow threshold was met during each of the years presented, therefore UCDP received additional

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rental revenue. During the years ended December 31, 2007, 2006 and 2005, respectively, UCDP recorded approximately $13,598,000, $10,802,000 and $7,680,000, related to hotel land lease revenue. These amounts are included in other operating revenues in the accompanying consolidated statements of operations.

Hotel guests may charge theme park passes, food and beverage and merchandise sold at IOA, USF and certain CityWalk venues to their hotel room account by presenting their room key. UCDP then collects this revenue by billing UCF HV. In addition, UCDP provides and is partially reimbursed for bus and boat transportation for hotel guests, maintenance of the related waterways and pedestrian walkways, and hotel marketing. During the years ended December 31, 2007, 2006, and 2005, respectively, total amounts received from UCF HV were approximately $17,788,000, $16,827,000 and $17,143,000.

Transactions with Related Theme Parks

Vivendi Universal Entertainment owns the Wet n Wild^® water park in Orlando (“WNW”). UCDP participates in and manages a ticketing program, which permits customers to visit several local amusement parks on one ticket, including IOA, USF and WNW. Revenue is then shared among the participating amusement parks. During the years ended December 31, 2007, 2006, and 2005, respectively, UCDP’s share of revenue from this ticketing program was approximately $38,574,000, $39,323,000 and $44,207,000. During the years ended December 31, 2007, 2006, and 2005, respectively, WNW’s share of this ticketing program was approximately $7,291,000, $7,400,000 and $8,317,000.

Vivendi Universal Entertainment has entered into licensing arrangements for Universal theme parks in Singapore and Dubai, which will use our technology and schematics for various components on some of their rides. For the year ended December 31, 2007, we received approximately $6,898,000 from these parks as capital reimbursements.

Transactions with NBCU and GE

As a result of the NBC Universal Transaction, UCDP is realizing synergies with other NBCU businesses which include cross-promotion with a variety of NBCU television and cable services, in particular advertising time on the NBC television network and other promotions. In response, NBC television and cable services receive visual identification in UCDP’s parks. UCDP estimates the value of both sides of these transactions during the years ended December 31, 2007, 2006 and 2005 to be approximately $5,100,000, $4,700,000 and $3,000,000, respectively.

UCDP leases certain trailers through a subsidiary of GE. During the years ended December 31, 2007 and 2006, the cost of these leases was approximately $191,000 and $176,000, respectively. The majority of these leases expire in 2010, while the minimum future lease payments under the leases totaled approximately $483,000 as of December 31, 2007. These leases existed prior to the NBC Universal Transaction.

We have also entered into a sponsorship agreement with GE Money Bank.

Receivables from Related Parties

Receivables from related parties are comprised of the following amounts as of December 31, (in thousands):

	2007		2006
UCF HV	$	2,667	$	5,936
HR Florida Partners (1)		—		869
Cineplex Odeon		533		237
Uniman LLC		456		—
Other		1,397		534
Total	$	5,053	$	7,576

(1) On December 31, 2006, Vivendi Universal Entertainment sold its interest in HR Florida Partners.

12. Retirement Plan

UCDP has a defined contribution plan (the “Contribution Plan”) covering all eligible employees. Participation in the Contribution Plan is voluntary. Salaried employees of UCDP are eligible to participate upon their date of hire. Nonexempt employees are eligible to participate in the Contribution Plan upon the accumulation of 1,000 hours of service and may enroll any time after the first Contribution Plan Entry Date (January 1, April 1, July 1 or October 1) that coincides with or immediately follows the date upon which the employees becomes eligible. UCDP provides a discretionary matching contribution equal to 100% up to the first 3% of compensation and 50% of all participant contributions up to the next 2%. Employee and employer contributions are 100% vested immediately. Total contributions made by UCDP under the Contribution Plan were approximately $4,189,000, $3,853,000 and $3,698,000, respectively, during the years ended December 31, 2007, 2006, and 2005.

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13. Commitments and Contingencies

Consulting Agreement

UCDP has an agreement (the “Consulting Agreement”) with a Consultant, (as defined in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations”) under which UCDP pays a fee for consulting services and exclusivity equal to a percentage of UCDP’s gross revenues from the attractions and certain other facilities owned or operated, in whole or in part, by UCDP. The accompanying consolidated statements of operations include consulting fee expense under the Consulting Agreement of approximately $19,577,000, $18,108,000 and $17,833,000, respectively, during the years ended December 31, 2007, 2006, and 2005.

Under the terms of the Consulting Agreement, the Consultant is also entitled to a fee based on a percentage of gross revenues of comparable projects, which are gated motion picture and/or television themed attractions owned or operated, in whole or in part, by UCDP, or any of UCDP’s partners or any of their affiliates, other than in Universal City, California. At present, the only theme park which is a comparable project under the Consulting Agreement is Universal Studios Japan. The Consultant may also be entitled to participate in certain sales of equity by the Company’s partners and to participate in certain real estate development activities of the Company’s partners or their affiliates. USI has guaranteed UCDP’s obligations under the Consulting Agreement for the benefit of the Consultant and Vivendi Universal Entertainment has assumed USI’s obligations under that guarantee. Accordingly, fees with respect to Universal Studios Japan are paid by an affiliate of Vivendi Universal Entertainment and are not paid by UCDP. The unpaid fees were approximately $4,202,000 and $3,961,000, respectively, as of December 31, 2007 and 2006. These amounts were paid in the following year. Vivendi Universal Entertainment has indemnified UCDP against any liability under the Consulting Agreement related to any comparable project that is not owned or controlled by UCDP.

Although the agreement has no expiration date, starting in June 2010, the Consultant has the right, upon 90 days notice, to terminate the periodic payments under the Consulting Agreement and receive instead one cash payment equal to the fair market value of the Consultant’s interest in the revenue streams in the Orlando parks and any comparable projects, which fair market value could be significant. If the Consultant exercises the option and the parties cannot agree on the fair market value of the buyout option, the fair market value will be determined by binding appraisal. Due to uncertainties in the amount and timing of such a cash payment and the Company’s ability to make such a cash payment, the Company’s ability to refinance UCDP’s senior secured credit agreement, the April 2010 notes and the May 2010 notes, and the Company’s ability to incur future indebtedness could be adversely impacted by this right of the Consultant.

Litigation

2007 Assessments

On September 18, 2007, UCDP filed petitions to the Orange County Value Adjustment Board seeking review and adjustment of the 2007 assessments by the Orange County Property Appraiser (the “Property Appraiser”) of certain real and tangible personal property owned by UCDP. The Special Magistrates recommended that UCDP’s petitions be denied as to the USF and IOA tangible personal property and real property and recommended that the assessment as to UCDP’s parking garages be reduced. Although UCDP may challenge these assessments in circuit court, UCDP paid the full assessment with respect to the 2007 real and personal property on November 30, 2007. Accordingly, an adverse resolution of these assessments would not create any exposure beyond the amount already paid by UCDP.

2006 Assessments

In the second quarter of 2007, UCDP received and recorded a refund of approximately $1.0 million (the “2006 Refund”) with respect to an adjustment of the 2006 assessments by the Orange County Property Appraiser (the “Property Appraiser”) reducing the assessed property values of certain real and tangible personal property owned by UCDP.

Meanwhile, on April 17, 2007, the Property Appraiser filed a Complaint in state circuit court challenging the 2006 tangible personal property assessments (the “Property Appraiser’s 2006 Tangible Personal Property Complaint”). On May 16, 2007, UCDP filed two lawsuits against the Property Appraiser, Orange County Tax Collector (the “Tax Collector”) and the Florida Department of Revenue (the “FDOR”), challenging the Property Appraiser’s 2006 assessments for (i) real property at USF and IOA and for (ii) UCDP’s parking garages. The parties are currently engaged in motion practice and discovery and we cannot predict the outcome of these cases. In the event of an adverse determination, UCDP may be required to repay the amount of the 2006 Refund, plus interest and penalties if awarded by the court. It is premature to assess the likelihood of any material impact to UCDP’s results of operations, financial position or cash flows.

Back Assessments

On December 21, 2006, the Property Appraiser concluded an audit of UCDP’s 2003, 2004 and 2005 tangible personal property returns, asserting that UCDP underreported its tangible personal property in each of those years. The Property Appraiser issued back

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assessments resulting in back taxes, interest and penalties being charged by the Orange County Tax Collector. On February 19, 2007, UCDP filed a complaint in state circuit court challenging the legality of the back assessments and seeking other relief. On April 25, 2007, the Court dismissed the portions of UCDP’s complaint pertaining to the back assessments on Universal’s Islands of Adventure, and it also dismissed UCDP’s due process claim. On May 7, 2007, UCDP also re- filed the complaint (“UCDP’s Re-filed Back Assessment Complaint”) as to Islands of Adventure and also filed motions seeking rehearing, clarification and leave to amend the original complaint. On September 12, 2007, the Florida Department of Revenue filed an Answer. On February 15, 2008, the court denied the Property Appraiser’s motion to dismiss UCDP’s re-filed Back Assessment Complaint. The Property Appraiser and the Tax Collector are appealing the denial of the dismissal of UCDP’s Re-filed Back Assessment Complaint. UCDP intends to oppose the appeal. It is premature to assess the likelihood of any material impact to UCDP’s results of operations, financial position or cash flows.

Patent Infringement

On March 1, 2007, Safety Braking Corporation, Magnetar Technologies Corp. and G&T Conveyor Co. filed a Complaint for Patent Infringement (the “Complaint”) in the United States District Court for the District of Delaware naming NBCU, USI and Blackstone Group L.P. as defendants, along with other theme park industry owners or operators, which was later amended to add UCDP and Universal City Studios LLLP (“UCS”) and to dismiss NBCU, USI and The Blackstone Group, (the “Amended Complaint”). The Amended Complaint alleged that the defendants were liable for direct or indirect infringement of various patents because of their ownership and/or operation of various theme park rides. On August 16, 2007, the plaintiffs, UCDP and UCS agreed to settle the claims set forth in the Amended Complaint and on November 12 and 19, 2007, the parties executed the final settlement documents. On December 10, 2007, the court entered an order endorsing the Stipulation of Dismissal agreed to by plaintiffs, UCDP and UCS. The resolution was within the amount accrued for the loss contingency and was paid during the fourth quarter of 2007.

Other

UCDP is threatened with or involved in various other legal actions and claims incidental to the conduct of its business. Management does not expect a material impact to its results of operations, financial position or cash flows by reason of these actions.

14. Land Sales

From time to time, UCDP sells portions of its undeveloped land that is not required to support its long-term growth plans.

In June 2007, UCDP sold 2 acres of land. The cost basis of the land approximated $300,000. In connection with this sale, UCDP recorded a gain of approximately $2,776,000 during the year ended December 31, 2007.

In December 2006, UCDP sold 4 acres of undeveloped land. The cost basis of the land approximated $845,000. In connection with this sale, UCDP recorded a gain of $5,195,000 during the year ended December 31, 2006. As part of the transaction, UCDP received a promissory note from the buyer in the amount of $4,890,000, which was repaid during 2007.

In December 2005, UCDP sold 4 acres of undeveloped land. The cost basis of the land approximated $1,391,000. In connection with this sale, UCDP recorded a gain of $2,180,000 during the year ended December 31, 2005.

15. Quarterly Data (Unaudited)

UCDP’s quarterly results are subject to seasonal variations. UCDP’s quarterly financial data is as follows (in thousands):

	First Quarter			Second Quarter		Third Quarter		Fourth Quarter
2007
Operating revenues	$	186,593		$	260,577	$	266,685	$	217,988
Operating income		9,039			60,423		80,658		40,678
Net (loss) income		(18,514	)		36,312		57,274		16,816
2006
Operating revenues	$	181,559		$	249,687	$	225,521	$	198,619
Operating income		2,832			55,184		52,868		34,092
Net (loss) income		(25,738	)		27,468		28,096		12,134

The quarterly results above were impacted by the following discrete transactions:

(1) During the fourth quarter of 2006, UCDP recorded a gain of $5,195,000 related to a land sale. (see note 14).

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(2) During the second quarter of 2007, UCDP recorded a gain of $2,776,000 related to a land sale. (see note 14).

16. Subsequent Events

Effective February 6, 2008, Gretchen Hofmann, Executive Vice President of Sales and Marketing of UCDP, retired.

Effective February 29, 2008, the partners entered into a contribution agreement with UCDP, allowing UCDP to request, through Holdings, cash contributions not to exceed a total of $50,000,000 to fund ongoing capital expenditure needs. The capital expenditures funded from such capital contributions will not count against the limitations on capital expenditures under UCDP’s existing bank credit agreement with JPMorgan Chase.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Universal City Development Partners, Ltd.

The management of Universal City Development Partners, Ltd. carried out an evaluation, with the participation of UCDP’s Principal Executive Officer and Principal Financial Officer, of the effectiveness of UCDP’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, UCDP’s Principal Executive Officer and Principal Financial Officer concluded that UCDP’s disclosure controls and procedures were effective to ensure that information required to be disclosed by UCDP in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules, regulations and forms promulgated by the Securities and Exchange Commission, as of the end of the period covered by that report.

There was no change in UCDP’s internal control over financial reporting during the year ended December 31, 2007 that materially affected, or is reasonably likely to materially affect, UCDP’s internal control over financial reporting.

UCDP Finance, Inc.

The management of UCDP Finance, Inc. (“Finance”) carried out an evaluation, with the participation of Finance’s Principal Executive Officer and Principal Financial Officer, of the effectiveness of Finance’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, Finance’s Principal Executive Officer and Principal Financial Officer concluded that Finance’s disclosure controls and procedures were effective to ensure that information required to be disclosed by Finance in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules, regulations and forms promulgated by the Securities and Exchange Commission, as of the end of the period covered by that report.

There was no change in Finance’s internal control over financial reporting during the year ended December 31, 2007 that materially affected, or is reasonably likely to materially affect, Finance’s internal control over financial reporting.

Report of Management on Internal Control Over Financial Reporting

March 20, 2008

We, as members of management of Universal City Development Partners, Ltd., are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

We, under the supervision of and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, assessed the Company’s internal control over financial reporting as of December 31, 2007, based on criteria for effective internal control over financial reporting described in “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, we concluded that we maintained effective internal control over financial reporting as of December 31, 2007, based on the specified criteria.

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This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

March 20, 2008

We, as members of management of UCDP Finance, Inc., are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

We, under the supervision of and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, assessed the Company’s internal control over financial reporting as of December 31, 2007, based on criteria for effective internal control over financial reporting described in “Internal Control—Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, we concluded that we maintained effective internal control over financial reporting as of December 31, 2007, based on the specified criteria.

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report

Item 9B. Other Information

Not applicable.

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PART III

Item 10. Directors and Executive Officers of the Registrant

Directors and Executive Officers

Pursuant to the terms of UCDP’s partnership agreement, UCDP is governed and managed by its general partner, Holding II, through a six-member committee of representatives of the partners of Holding II, known as the Park Advisory Board. Three members of the Park Advisory Board are designated by Blackstone and three are designated by Universal CPM. Holding II has the exclusive right to manage and control UCDP and may execute documents, instruments and agreements on UCDP’s behalf. All actions of the Park Advisory Board must be approved by the representatives of both Blackstone and Universal CPM (except when the capital account balance of either Blackstone or Universal CPM is half that of the other, then the partner with the greater capital account balance is entitled to exclusively govern and manage UCDP for so long as its capital account balance is twice that of the other partner). UCDP’s partnership agreement provides for Vivendi Universal Entertainment to manage the day-to-day operation of our theme parks subject to the supervision and oversight of the Park Advisory Board.

We employ most of our executive officers and employees. However, some of our executive officers and certain of our employees are employed by our manager, Vivendi Universal Entertainment, or its affiliates and their services are provided to us on a reimbursement basis.

See “Item 13. Certain relationships and related transactions—Reimbursement of UCDP’s manager’s costs” for a better description of this relationship.

Set forth below is certain information regarding our representatives, the members of our Park Advisory Board, our executive officers and certain other key employees. In this report, “Universal Orlando” refers to the business conducted by UCDP.

Name	Age	Position
Thomas L. Williams(1)	60	Universal CPM representative on UCDP’s Park Advisory Board and Universal CPM representative for each of Holding I and Holding II
John R. Sprouls(1)	49	Executive Vice President, Human Resources, Legal and Business Affairs, Universal Parks & Resorts, President/Chief Executive Officer for each of Holding I and Holding II, Chief Executive Officer for UCDP and Universal CPM representative for each of Holding I and Holding II
Christy R. Shibata	35	Universal CPM representative on UCDP’s Park Advisory Board and Universal CPM representative for each of Holding I and Holding II
Jean Louis Bonnier (1)	45	Universal CPM representative on the audit committee for each of Holding I and Holding II and UCDP
Salil K. Mehta	44	Universal CPM representative on UCDP’s Park Advisory Board
Michael S. Chae	39	Blackstone representative on UCDP’s Park Advisory Board and Blackstone representative for each of Holding I and Holding II
Thomas B. McGrath	53	Blackstone representative on UCDP’s Park Advisory Board and Blackstone representative for each of Holding I and Holding II

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Jill Greenthal	51	Blackstone representative on UCDP’s Park Advisory Board, Blackstone representative on the audit committee for each of Holding I and Holding II, and UCDP, and Blackstone representative for each of Holding I and Holding II
William A. Davis	61	President and Chief Operating Officer, Universal Orlando
Tracey L. Stockwell	43	Senior Vice President and Chief Financial Officer, Universal Orlando, Treasurer/Chief Financial Officer for each of Holding I and Holding II
Richard E. Costales	55	Senior Vice President, Park Operations, Universal Orlando
Richard T. Florell	59	Senior Vice President and General Manager, Resort Revenue Operations, Universal Orlando
Peter C. Giacalone	56	Senior Vice President, Business Development, Universal Orlando
J. Michael Hightower(1)	50	Senior Vice President, Technical Services, Universal Orlando
Kurt Kostur	41	Senior Vice President, Marketing, Universal Orlando
Michelle McKenna	42	Senior Vice President and Chief Information Officer, Universal Orlando
John McReynolds	44	Senior Vice President, External Affairs, Universal Orlando
Catherine A. Roth	50	Senior Vice President, Legal Affairs and General Counsel, Universal Orlando
James A. Timon	49	Senior Vice President, Entertainment, Universal Orlando
Sherry L. Berlin	38	Vice President Finance, Treasurer, Universal Orlando
Daniel P. Neal	35	Vice President Finance, Controller, Universal Orlando

(1) Employed by Vivendi Universal Entertainment or one of its affiliates.

Thomas L. Williams has been a member of UCDP’s Park Advisory Board and a Universal CPM representative for each of Holding I and Holding II since October 1999. In addition, Mr. Williams was appointed Chairman of each of UCFH I Finance and UCFH II Finance in December 2004. Mr. Williams has been Chairman and Chief Executive Officer of Universal Parks & Resorts, a division of Vivendi Universal Entertainment since 1999. Prior to holding that position, Mr. Williams served as UCDP’s President and Chief Executive Officer from 1997 to 1999, and as UCDP’s President and Chief Operating Officer from 1990 to 1997. Prior to joining Universal Orlando in 1987 he was Vice President of Hotels and Restaurants for Yosemite National Park.

John R. Sprouls has been a Universal CPM representative and the President/Chief Executive Officer for each of Holding I and Holding II since December 2004 and Chief Executive Officer of UCDP since December 2006. In addition, Mr. Sprouls is a Universal Parks & Resorts Executive Vice President, Human Resources, Legal & Business Affairs since 2004. Since 1999, Mr. Sprouls was Universal Parks & Resorts Executive Vice President, Chief Human Resources Officer. Prior to that, Mr. Sprouls served as Universal Parks & Resorts Senior Vice President of Administration from 1997 to 1999, and Universal Parks & Resorts Vice President of Human Resources from 1996 to 1997. Prior to joining us in 1996, Mr. Sprouls held various Human Resource roles within The Seagram Company, Ltd., including Senior Vice President of Human Resources for the Seagram Spirits and Wine Group from 1991 to 1996.

Christy R. Shibata has been a member of UCDP’s Park Advisory Board and a Universal CPM representative for each of Holding I and Holding II since April 2007. Ms. Shibata currently serves as Executive Vice President and Chief Financial Officer of Universal Pictures and Studios, a position held since March 2007. Prior to that time and since October 2005, she was Vice President and Chief Financial Officer, of CNBC and CNBC International. From September 2002 to September 2005, she was the Chief Financial Officer at GE Healthcare Japan.

Jean Louis Bonnier was appointed Senior Vice President/Chief Financial Officer of Universal Parks & Resorts Finance in December 2005. Mr. Bonnier also serves on the audit committees for each of Holding I and Holding II and UCDP. Prior to his current position Mr. Bonnier served as Universal Parks & Resorts Vice President, Finance. Prior to joining Universal Parks & Resorts, Mr. Bonnier was Vice President of NBC Stations Division. He has been with NBC since 1999 and various businesses within GE since 1991.

Salil K. Mehta was recently appointed as a Universal CPM representative to UCDP’s Park Advisory Board. Mr. Mehta is the President of Business Operations, Strategy and Development of NBC Universal, a position held February 2008. From 2005 to 2008, Mr. Mehta was an executive VP of ESPN Enterprises and prior to that time, he worked in the corporate strategic planning department at Walt Disney Company and was the executive VP of Corporate Business Development for them since 2002.

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Michael S. Chae has been a member of UCDP’s Park Advisory Board and a Blackstone representative for each of Holding I and Holding II since September 2005. Mr. Chae is a Senior Managing Director in the Private Equity at The Blackstone Group L.P., which he joined in 1997. Before joining Blackstone, Mr. Chae worked as an Associate at the Carlyle Group, L.P. and prior to that with Dillon, Read & Co.

Thomas B. McGrath has been a member of UCDP’s Park Advisory Board and a Blackstone representative for each of Holding I and Holding II since August 2006. Mr. McGrath is the founder of Crossroads Media, a co-chairman of Screen Capital International, and a board member of CineWorld UK, Timeplay, and V-Media. Mr. McGrath was formerly Executive Vice President of the Viacom Entertainment Group and President of Time Warner International Broadcasting

Jill Greenthal has been a member of UCDP’s Park Advisory Board and a Blackstone representative for each of Holding I and Holding II since February 2007. Ms. Greenthal also serves on the audit committees for each of Holding I and Holding II and UCDP. Ms. Greenthal is a Senior Advisor in the Private Equity group at Blackstone, a position held since September 2007. Prior to that time, she was a Senior Managing Director in the Corporate and Mergers and Acquisitions Advisory Services group since 2003. Ms. Greenthal currently serves on the Board of Directors of Akamai Technologies, Freedom Communications, Martha Stewart Living Omnimedia and Orbitz Worldwide.

William A. Davis was named President and Chief Operating Officer of UCDP in December 2006. During 2005 and 2006 he was the Vice President and General Manager of Six Flags Marine World in San Francisco. Prior to that, Mr. Davis was the Managing Director of Port Aventura, S.A., more commonly known as Universal Mediterranea, in Tarragona, Spain during 2003 and 2004. Mr. Davis also served as a director of Port Aventura, S.A. and USPA Hotel Ventures I, S.A. during that same period. From 2000 until 2002, Mr. Davis was the Senior Vice President of Guest Services for Busch Entertainment Corporation.

Tracey L. Stockwell was named UCDP’s Senior Vice President and Chief Financial Officer in January 2007, as well as Treasurer/Chief Financial Officer of both of Holdings I and Holdings II. Prior to that, she had been UCDP’s Vice President of Finance and Controller since 2000. From 1999 to 2000, she served as UCDP’s Senior Director of Finance. From 1997 to 1999, she was UCDP’s Director of Finance. Prior to that position Ms. Stockwell was a senior manager for Price Waterhouse in Orlando. Ms. Stockwell received a B.Com from the University of Windsor, Ontario and is a licensed Certified Public Accountant in Florida.

Richard E. Costales has been UCDP’s Senior Vice President, Resort Operations since 2003. From 1994 to 2003, he served as UCDP’s Senior Vice President, Park Operations. From 1991 to 1994, he served as UCDP’s Vice President of Operations. Prior to 1991, Mr. Costales was UCDP’s Director of Operations.

Richard T. Florell has been UCDP’s Senior Vice President and General Manager, Resort Revenue Operations since 2003. From 2000 to 2003, Mr. Florell was Senior Vice President and General Manager of CityWalk and Resort Shared Services. From 1995 to 2000 Mr. Florell was Vice President of CityWalk. Prior to joining us in 1995, Mr. Florell was Vice President of Specialty Entertainment Centers at Walt Disney World, which included Pleasure Island, Disney’s Village Marketplace, Resort Retail Operations, Resort Entertainment and Development of Downtown Disney.

Peter C. Giacalone has been UCDP’s Senior Vice President, Business Development, since 2004. From 1997 to 2003, Mr. Giacalone was Senior Vice President, Business Development, Universal Parks & Resorts, a division of Vivendi Universal Entertainment. From 1994 to 1996, Mr. Giacalone was UCDP’s Vice President Business Administration. Prior to holding that position he served as UCDP’s Director Business Administration from 1991 to 1993. Prior to holding that position, he served as UCDP’s Assistant Controller from 1987 to 1990.

J. Michael Hightower has been UCDP’s Senior Vice President, Technical Services since 2004. From 2002 to 2004, Mr. Hightower was Vice President of Project Management for Universal Creative, a division of Vivendi Universal Entertainment. From 2000 to 2002, Mr. Hightower served as Vice President of Attraction Management for Universal Studios Recreation Japan Planning. From 1998 to 2000, he served as Vice President of Attraction Development for Universal Studios Florida and Universal’s Islands of Adventure.

Kurt Kostur was promoted to UCDP’s Senior Vice President, Marketing during 2006. Prior to that, he had been UCDP’s Vice President, Marketing since 2003. From 2000 to 2003, Mr. Kostur was UCDP’s Vice President, Marketing Communications. Prior to holding that position, he served as UCDP’s Vice President, Advertising during 2000.

Michelle McKenna has been UCDP’s Senior Vice President and Chief Information Officer since July 2007. From 2006 to 2007, she was the Senior Vice President and Chief Information Officer for Centex Destination Properties. Prior to that position, she served as Vice President of Information Technologies for the Walt Disney Company from 2001 to 2006.

John McReynolds was promoted to UCDP’s Senior Vice President, External Affairs in March 2007. Prior to that, he had been UCDP’s Vice President, Government Relations since 2000. From 1995 until 1997, he served as UCDP’s Manager of Government Relations; from 1997 until 1998 as UCDP’s Director of Government Relations; and from 1998 until 2000, as UCDP’s Senior Director of Government Relations. Prior to holding those positions, Mr. McReynolds held various position in United States Senator Connie Mack’s office.

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Catherine A. Roth was promoted to Senior Vice President, Legal Affairs and General Counsel in March 2007. She served as UCDP’s Vice President of Legal Affairs since February 2001. From 1990 until 1992, she served as UCDP’s Senior Attorney, from 1992 until 2000 as UCDP’s Director, Legal and Business Affairs and from 2000 to 2001 as Senior Director, Legal and Business Affairs. Prior to holding those positions, Ms. Roth worked for Merhson, Sawyer, Johnston, Dunwody & Cole and Finley, Kumble, Wagner, Heine, Underberg, Manley and Casey in Miami, Florida. Ms. Roth received her J.D. from the University of Miami.

James A. Timon has been UCDP’s Senior Vice President, Entertainment since 2004. Since 2003, Mr. Timon was UCDP’s Vice President of Entertainment after providing consulting services to us since 2002. From 1996 to 2002, he served as President of Renaissance Entertainment. Prior to joining Renaissance Entertainment, Mr. Timon was Vice President of Entertainment for Universal Studios Hollywood, another theme park owned by Vivendi Universal Entertainment.

Sherry L. Berlin has been UCDP’s Vice President of Finance and Treasurer since late 2005. From 1996 to 2005, Ms. Berlin held two positions with the company, UCDP’s Assistant Treasurer/Director of Capital and Director of Internal Audit. Prior to joining us, Ms. Berlin was a Senior Auditor at Franklin Templeton Mutual Funds and Deloitte & Touche LLP. Ms. Berlin received a B.B.A. in accounting from Baylor University and is a Certified Public Accountant in Florida.

Daniel P. Neal was named to UCDP’s Vice President of Finance and Controller in February 2007. He served as UCDP’s Senior Director of Finance in 2005 and 2006. From 2002 to 2004, he was UCDP’s Director of Finance. Prior to joining us, he was a manager for Arthur Andersen. Mr. Neal received a B.S. and masters in accounting from Florida State University and is a licensed Certified Public Accountant in Florida.

Audit Committee

Our audit committee is comprised of the same two members. Each of Blackstone and Vivendi Universal Entertainment, who together hold 100% of our equity interests (each holding a 50% interest), has appointed one member. Blackstone has appointed Jill Greenthal, and Vivendi Universal Entertainment has appointed Jean Louis Bonnier. Ms. Greenthal was appointed in February 2007, while Mr. Bonnier was appointed in February 2005.

We do not have any securities listed on a national securities exchange and are not a listed issuer. Accordingly, the rules pertaining to audit committees and the rules pertaining to the designation of an audit committee financial expert which apply to listed issuers do not apply to us. As a result, we have not designated an audit committee financial expert nor do we have an audit committee which complies with the rules which apply to listed issuers.

Changes in Directors and Executives

Effective March 11, 2008, Salil Mehta was appointed as a member of UCDP’s Park Advisory Board.

Effective February 8, 2008, Gretchen Hofmann retired her position as UCDP’s Executive Vice President of Sales and Marketing. A replacement has not yet been identified.

Effective April 13, 2007, Patricia Hutton resigned her position as Universal CPM’s representative of Holdings I and Holdings II and from UCDP’s Park Advisory Board. Effective on that same day, she was replaced by Christy R. Shibata.

Effective February 27, 2007, David S. Blitzer resigned his position on UCDP’s Park Advisory Board and as Blackstone’s representative for each of Holding I and Holding II. Effective on that same day, Mr. Blitzer was replaced by Jill Greenthal.

Effective February 27, 2007, Michael S. Chae resigned his position on the Audit Committees of Holdings I and Holdings II and UCDP. Effective on that same day, Mr. Chae was replaced by Jill Greenthal.

Effective January 12, 2007, Michael J. Short resigned his position as UCDP’s Executive Vice-President and Chief Financial Officer and his positions as Treasurer and Chief Financial Officer of Holdings I and Holdings II. Effective January 23, 2007, Mr. Short was replaced by Tracey L. Stockwell as Senior Vice President and Chief Financial Officer of UCDP and as Treasurer and Chief Financial Officer of Holdings I and Holdings II.

Code of Ethics

We have adopted a Code of Conduct applicable to our Senior Financial Officers, including our principal executive officer, principal financial officer and principal accounting officer or controller. A copy of the Code of Conduct is available upon written request, and is filed as part of this Report as Exhibit 14.1. In addition, our principal executive officer, and principal financial officer are subject to a Code of Conduct applicable to GE employees, which is also attached as Exhibit 14.2.

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Item 11. Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Committee

The compensation program for UCDP’s named executive officers (“NEO’s”) is designed to attract, retain, incentivize and reward talented executives who can contribute to its growth and success and thereby build value over the long term. UCDP’s executive compensation program is organized around the following fundamental principles:

• Compensation should be tied to the success of the Company and each executive’s contribution to that success.

• The level of compensation should consider the importance of the executive to the company, the competition for the executive’s talent and relative compensation levels for other executives within the company.

We do not have any securities listed on a national securities exchange and are not a listed issuer. We do not have a designated compensation committee as the Park Advisory Board believes it is appropriate for executive officer compensation to be determined by two designated representatives of Holdings, Michael Chae and Tom Williams, on behalf of Blackstone and Universal CPM, respectively. This process is set forth in UCDP’s partnership agreement.

Benchmarking of Compensation

UCDP periodically assesses the competitiveness of its pay practices for its NEO’s through internal staff research and through purchased external studies conducted by Watson Wyatt. External studies analyze nonpublic information regarding overall compensation and specific compensation elements such as base salary and incentive compensation of peer group companies. While the peer group companies used in the study are not explicitly identified, they are categorized by industry, such as entertainment, restaurant, or retail, and their respective revenue levels. UCDP uses the information provided about companies that are in the same industries as UCDP with which UCDP competes for employees. Internal analysis focuses on public information regarding compensation elements such as incentive based compensation of peer group companies in the entertainment, restaurant and retail industries.

Elements of Incentive Compensation

UCDP’s compensation practices are designed to reward successful individual performance and the success of the Company by aligning executives’ financial interests with those of the Company’s through a combination of base salary and performance-based incentive compensation. Base salary is linked to the executive’s role and contributions to the Company. Performance-based incentive compensation is comprised of annual cash bonuses tied to the individual’s performance against their objectives and the Company’s performance, and a long-term growth plan, used to focus executives’ efforts toward longer-term performance, thereby enhancing the value of the Company to the partners.

Base Salary

Base salaries are generally designed to be competitive with comparable positions in peer group companies in order to attract and retain talented executives with compensation packages that are competitive but fair. Several elements of executive compensation are compared to those of peer group companies, including base salary and performance-based incentive compensation under our Annual Incentive plan and, in 2007, our Long-Term Growth Plan. Each NEO’s actual salary varies based on his or her qualifications and experience, responsibilities and potential. Base salaries are reviewed annually and adjusted based on achievement of qualitative and quantitative individual goals and objectives developed by the individual with their manager, as well as when an individual is promoted or assumes additional responsibilities. Over the last five years, our NEO’s have received base salary increases ranging from 3% to 10%. In some situations, base salaries may be modified higher based upon an individual’s performance review and the discretion of the Executive Vice President, Human Resources, Legal and Business Affairs for UPR.

Performance-based Incentive Compensation

The Company’s incentive compensation programs are overseen by the representatives of Holdings and have the ability to offer different types of cash awards to promote high performance levels and achievement of corporate goals by key employees encourage the growth of stockholder value and allow key employees to participate in the long-term growth and profitability of the Company. NEO’s qualify for short and long-term incentives if they meet the individual and corporate performance objectives and targets set at the beginning of each fiscal year.

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Annual Incentive Plan

The goal of our Annual Incentive Plan (also referred to in certain employment agreements of our NEO’s as the Executive Incentive Plan and hereinafter the “Incentive Plan”) is to reward superior performance. Our Incentive Plan provides our executive team the opportunity to benefit from our business performance in conjunction with their level of personal performance. Currently, employees who are eligible to participate in the Incentive Plan are limited to our executive employees at a Director level or above who do not participate in a Sales Incentive Plan. Under the Incentive Plan, which is administered by our Compensation department, each participant has a bonus target of 15 to 30 percent of their base salary, generally based on their level in the organization, with the bonus target for Senior Vice Presidents and above starting at 25% of their base salary. Each year participants and their managers create individual objectives which support the overall operating plan established by senior management. While the specifics of each individual’s goals will vary depending upon their role within the Company, most goals focus upon team member satisfaction, guest satisfaction and financial returns. At the conclusion of the fiscal year the individual objectives are evaluated by the individual’s manager and an overall personal performance percentage is assigned to them. Concurrently, company performance is determined by operating performance of UCDP as measured by EBITDA (as defined) and cash flow. Payout is then based on the target multiplied by personal performance multiplied by company performance. Over the last five years, our NEO’s have received incentive awards ranging from 22% to 73%. If a participant ceases to be employed by reason of retirement, disability, death or termination (other than for cause) they will participate in the Incentive Plan on a pro-rata basis. If a person ceases to be employed by us or Vivendi Universal Entertainment because they have been terminated for cause, or for reasons other than retirement, disability, death prior to Incentive Plan payout, their participation in the Incentive Plan is terminated and no plan payments are made.

2007 Long-Term Growth Plan

On September 6, 2005, the Park Advisory Board of UCDP approved the Long-Term Growth Plan effective as of January 1, 2005. The Long-Term Growth Plan provides key employees the opportunity to benefit from UCDP’s growth in value. Employees who are eligible to participate in the plan are limited to UCDP’s Executive Committee members, UCDP’s business unit heads, and a select group of Universal Parks & Resorts and other UCDP executives. Under the plan, which is administered by the Park Advisory Board, each participant is granted one or more VARs, based upon the participant’s level of responsibility within the Company. The value of a VAR is generally based on the growth in market value of the equity interests of the ownership partners (Blackstone Capital Partners and NBC Universal, Inc.) in UCDP. A pool is established for valuing the VARs and such pool is equal to 2% of the growth in UCDP’s equity value. The value of a VAR is calculated by dividing the total pool value by the total number of outstanding VARs. Each VAR will be triggered and automatically exercisable upon the earlier of a change in UCDP’s ownership structure which results in NBC Universal, Inc. owning less than 50%, or January 1, 2008. If a change of ownership occurs, the payout value is calculated based on the sales price of this ownership change. Since a change in ownership did not occur, the payout value was calculated based on an earnings multiple from financial results generated from January 2005 through December 2007, subject to specific caps so that the payout value for each participant is no more than 100% of their total compensation as of January 1, 2005. Under the plan, all awards are paid in cash. If a participant ceases to be employed by reason of retirement, disability, death or termination (other than for cause), any VARs earned continue under the plan and are pro-rated. Where there is a termination (other than for cause), the participant is not allowed to receive payout under the plan if that party had not been an active participant in the plan for at least nine months. If a person ceases to be employed for reasons other than retirement, disability, death or termination (other than for cause), any rights under the plan and all VARs granted are canceled. As of December 31, 2007, approximately $8,571,000 has been accrued for this plan. The amount accrued for was paid in February 2008.

Determining Compensation for UCDP’s Chief Executive Officer in 2007

Mr. Sprouls has been Holdings Chief Executive Officer since December 2004 and UCDP’s Chief Executive Officer since December 2006. At the beginning of each year, Mr. Sprouls develops objectives designed to achieve Company success. These objectives are reviewed with Mr. Sprouls’ manager, Thomas L. Williams, the Chairman and CEO of UPR, for the corollary purpose of establishing how Mr. Sprouls performance will be assessed. These objectives are largely derived from the Company’s focus on team member satisfaction, guest satisfaction and financial returns. Mr. Sprouls does not participate in the final determination of his own compensation.

For 2007, based on the Company’s performance, Mr. Sprouls leadership contribution in his new role as CEO of UCDP, and Mr. Sprouls performance against the above measured objectives, the portion of his base salary attributable to UCDP was increased from $188,511 to $202,150, a 7% increase. The prior CEO received base salary increases ranging from 2.5% to just over 6% during the period from 2003 through 2006. Additionally in 2007, Mr. Sprouls received a bonus under VUE’s Annual Incentive Plan, $110,000 of which was attributable to UCDP, and for which UCDP reimbursed VUE. The prior CEO received bonuses under UCDP’s Annual Incentive Plan ranging from $150,000 to $391,000 during the period from 2003 to 2006. Mr. Sprouls payout under the UCDP 2007

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Long Term Growth Plan described above was $450,000. There was no payout under this plan in 2006. Mr. Sprouls total compensation attributable to UCDP throughout 2007 was $769,650, as compared to $258,711 in 2006, with the majority of the increase due to the payout under the Long Term Growth Plan. We believe that Mr. Sprouls’ total compensation is closely connected with the Company’s objective to retain, incentivize and reward talented executives who can contribute to its growth and success and thereby build value over the long term.

2007 Summary compensation table

The following table sets forth the compensation during the last three fiscal years awarded to, earned by or paid to our Chief Executive Officer, Chief Financial Officer and of our three other most highly compensated executive officers as of December 31, 2007 collectively the “named executive officers”. Compensation for each of the individuals below is approved by the representatives of Holding I and Holding II.

Name and Principal Position	Year	Salary ($)	Bonus (1) ($)	Long Term Incentive Payout (2) ($)	All Other Compensation (3) ($)	Total ($)
John R. Sprouls(4) President and Chief Executive Officer of Holdings, Chief Executive Officer of UCDP and Executive Vice President Human Resources, Legal and Business Affairs, Universal Parks & Resorts	2007	202,150	110,000	450,000	7,500	769,650
	2006	188,511	62,700	—	7,500	258,711
Tracey L. Stockwell Treasurer/Chief Financial Officer of Holdings and Senior Vice President and Chief Financial Officer, Universal Orlando	2007	232,056	112,207	305,525	11,339	661,127
Michael J. Short(4) Former Treasurer/Chief Financial Officer of Holdings and Executive Vice President and Chief Financial Officer, Universal Orlando, resigned effective January 12, 2007	2007	21,439	—	—	—	21,439
	2006	367,288	108,036	—	7,500	482,824
William A. Davis President and Chief Operating Officer, Universal Orlando	2007	446,561	229,500	600,000	29,501	1,305,562
Thomas L. Williams Chairman, Universal Parks and Resorts	2007	—	—	1,106,560	—	1,106,560
Gretchen Hofmann Executive Vice President, Sales and Marketing, Universal Orlando, retired effective February 8, 2008	2007	370,966	171,544	421,667	20,436	984,613
	2006	357,382	80,852	—	25,246	463,480

(1) Represents bonus earned in 2007 and paid out on February 19, 2008 under VUE’s Annual Incentive Plan, in the case of Mr. Sprouls, and under UCDP’s Annual Incentive Plan, in the case of Ms. Stockwell, Mr. Davis, and Ms. Hofmann. Under the Annual Incentive Plan awards are based on operating performance as measured by EBITDA (as defined) and cash flow (see Annual Incentive Plan).

(2) Represents the NEO’s share of the 2007 long-term growth plan. These amounts were earned for performance during 2005, 2006 and 2007 in accordance with the plan and paid out on February 19, 2008.

(3) The amounts shown in this column for fiscal 2007 and 2006 include the following:

(i) General Electric Company (“GE”) matches contributions made by employees under the GE Savings & Security Program. The cost of these contributions was $7,500 in the case of Mr. Sprouls for 2007 and 2006 and $7,500 in the case of Mr. Short for 2006.

(ii) We match contributions made by employees under the Universal Orlando 401(k) Plan. In 2007, the cost of these contributions was $9,000 in the case of Mr. Davis, $8,839 in the case of Ms. Stockwell and $8,891 in the case of Ms. Hofmann. In 2006, the cost of these contributions was $8,631 in the case of Ms. Hofmann.

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(iii) We match contributions made by employees under our deferred compensation plan. In 2007, the cost of these contributions was $18,001 in the case of Mr. Davis and $9,045 in the case of Ms. Hofmann. In 2006 the cost of these contributions was $14,115 in the case of Ms. Hofmann. We also maintain a program of life and disability insurance generally available to all salaried employees on the same basis.

(iv) We provide a medical allowance to our executives. In 2007, we paid $2,500 to Mr. Davis, Ms. Stockwell and Ms. Hofmann. In 2006, we paid $2,500 to Ms. Hofmann.

(4) During 2007 and 2006, Mr. Sprouls and Mr. Short were employees of Vivendi Universal Entertainment, and we reimburse Vivendi Universal Entertainment or its affiliates for the pro rata cost of their employment compensation based on the time they spend working on UCDP matters. For both years, we reimbursed Vivendi Universal Entertainment or its affiliates for 50% of the cost of Mr. Sprouls’ employment compensation and 100% of the cost of Mr. Short’s employment compensation. Amounts set forth in the above table represent amounts we reimbursed Vivendi Universal Entertainment or its affiliates with respect to the applicable named executive officer. These employees were eligible to participate in various retirement plans with VUE and now General Electric, which we are not liable for, nor did we incur any expense and therefore, are not reflected in the table above. The following represents plans to which they currently maintain balances:

(i) Mr. Sprouls maintains a balance in the Vivendi Universal Entertainment Pension Plan.

(ii) In 2007, Mr. Sprouls was granted 2,200 GE stock options which vest 20% each year for five years and 734 restricted stock units which vest 50% at the end of years three and five. In 2006, Mr. Sprouls was granted 2,700 GE stock options which vest 20% each year for five years and 594 restricted stock units which vest 50% at the end of years three and five.

Nonqualified Deferred Compensation

UCDP has a nonqualified deferred compensation plan (the “Plan”) that permits eligible executives and members of management to defer a specified portion of their compensation. Under the plan, employees may defer up to 80% of base salary and/or up to 100% of bonus compensation. The deferred compensation, together with limited partnership matching contributions, which vest immediately, accrue earnings based on elected investment alternatives. Employees are eligible to receive distributions at death or at termination of their employment or after specified waiting periods, as they elect at the time of deferral. Funds are also available at their election at retirement, at termination of their employment, at death or during specified in-service periods, or in the event of an approved unforeseeable financial emergency. During 2007, the Company made matching contributions of $18,001 and $9,045 for Mr. Davis and Ms. Hofmann, respectively. The Company’s other NEO’s did not participate in the Plan.

2007 Nonqualified Deferred Compensation Table

Name	Executive Contributions in Last Fiscal Year ($)	Registrant Contributions in Last Fiscal Year ($)	Aggregate Earnings (Losses) in Last Fiscal Year ($)		Aggregate Withdrawals/Distributions ($)	Aggregate Balance at Last Fiscal Year-End ($)
William A. Davis	252,014	18,001	(3,212	)	—	266,803
Tracey L. Stockwell	—	—	3,871		—	58,060
Gretchen Hofmann	111,290	9,045	12,621		—	880,317

Employment agreements

Mr. John R. Sprouls is a party to an employment agreement with Vivendi Universal Entertainment, and Ms. Tracey Stockwell and Mr. William A. Davis are each a party to an employment agreement with UCDP. The following summaries of the material provisions of the employment agreements do not purport to be complete and are subject to, and qualified in their entirety by reference to, all provisions of each described agreement. Mr. Michael J. Short was a party to an employment agreement with Vivendi Universal Entertainment that ended with his resignation in 2007, and Ms. Gretchen Hoffman was a party to an employment agreement with UCDP until it terminated on its terms in 2007 before her subsequent retirement.

John R. Sprouls

Vivendi Universal Entertainment has an employment agreement with Mr. Sprouls, pursuant to which he serves as Executive Vice President, Human Resources, Legal & Business Affairs for Universal Parks & Resorts. Mr. Sprouls also serves as President/Chief Executive Officer of each of the issuers and as Chief Executive Officer of UCDP. The term of the agreement continues through December 6, 2009. Vivendi Universal Entertainment also has an irrevocable option to renew for an additional 24 months, which would expire on December 6, 2011. If Vivendi Universal Entertainment continues Mr. Sprouls’ employment beyond the expiration of the term without having entered into a new contract, such employment will be “at will.” Under the agreement, Mr. Sprouls receives a base annual salary and is eligible to participate in UCDP’s Long-Term Growth Plan, annual incentive plan, and other benefit plans that are generally available to employees of Vivendi Universal Entertainment. In the event that Mr. Sprouls receives a higher base

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salary than that provided for in his employment agreement, that higher base salary will be deemed the annual rate. Under the agreement, Mr. Sprouls is also eligible to receive discretionary equity or equity-equivalent grants, as such grants are offered to similarly situated employees. Any award made to Mr. Sprouls under any General Electric or VUE plan or program will take into consideration his participation in any UCDP Long Term Growth Plan. In the event of termination for cause or in the case of death, Mr. Sprouls or his estate would be entitled to receive a payment of accrued but unpaid base salary due to him through the termination date or the date of death, as well as other unpaid amounts due to him under company benefit plans or programs. In the event of termination for disability, Mr. Sprouls or his estate is entitled to receive a payment of accrued but unpaid base salary due to him through the earlier of the 180th day after the onset of his disability absence or his death. In the event of involuntary termination (or termination without cause), Mr. Sprouls is entitled to receive his base salary and benefits, with the exception of certain specified types of plans, including any stock or cash incentive based plans, through the expiration of the term of the agreement, so long as he continues to adhere to the covenants in his employment agreement, which include not to disclose confidential or proprietary information, not to become engaged with a competitive business and not to induce Vivendi Universal Entertainment’s employees, consultants or representatives to leave their employment or to work for competitors. Mr. Sprouls is not entitled to participate in any severance plan of Vivendi Universal Entertainment under the terms of his agreement. However, upon his involuntary termination, Mr. Sprouls will receive the greater of the amounts payable to him under applicable long-term incentive plans or the standard amounts payable under the Vivendi Universal Entertainment severance plan, and if the later is the greater measure, he will receive both that amount and a cash payment equal to the difference between it and the amount payable under long-term incentive plans. Mr. Sprouls’ employment agreement contains a binding arbitration clause.

Tracey L. Stockwell

UCDP has an employment agreement with Ms. Stockwell, pursuant to which she serves as Senior Vice President and Chief Financial Officer. The term of the agreement continues through January 22, 2009. UCDP also has an irrevocable option to renew for an additional 24 months, which would expire January 22, 2011. If UCDP continues Ms. Stockwell’s employment beyond the expiration of the term without having entered into a new contract, such employment will be “at will.” Under the agreement, Ms. Stockwell receives a base annual salary and is eligible to participate in UCDP’s Long-Term Growth Plan, annual incentive plan, and other benefit plans that are generally available to employees of UCDP. Ms. Stockwell’s base salary may be modified upwards as determined by a performance review and the Executive Vice President, Human Resources, Legal & Business Affairs for UPR. Her employment may be terminated for cause or disability.

Michael J. Short

Vivendi Universal Entertainment had an employment agreement with Mr. Short, pursuant to which he served as Treasurer/Chief Financial Officer of each of the issuers and Executive Vice President and Chief Financial Officer of UCDP. Mr. Short was employed under the agreement when he resigned in January 2007. Under the agreement, Mr. Short received a base annual salary and was eligible to participate in UCDP’s Long-Term Growth Plan, annual incentive plan and other benefit plans that are generally available to employees of UCDP.

William A. Davis

UCDP has an employment agreement with Mr. Davis, pursuant to which he serves as President and Chief Operating Officer. The term of the agreement continues through October 1, 2008. UCDP also has an irrevocable option to renew for an additional 24 months, which would expire October 1, 2010. If UCDP continues Mr. Davis’ employment beyond the expiration of the term without having entered into a new contract, such employment will be “at will.” Under the agreement, Mr. Davis receives a base annual salary and is eligible to participate in UCDP’s Long-Term Growth Plan, annual incentive plan, and other benefit plans that are generally available to employees of UCDP. Mr. Davis’ base salary may be modified upwards as determined by a performance review and the Executive Vice President, Human Resources, Legal & Business Affairs for UPR. His employment may be terminated for cause or disability.

Thomas L. Williams

Vivendi Universal Entertainment has an employment agreement with Mr. Williams for his services as Chairman and Chief Executive Officer of UPR; however, no assurances are made under the agreement that Mr. Williams will continue to have oversight over UCDP for any specified period of time.

Gretchen Hofmann

UCDP had an employment agreement with Ms. Hofmann for her services as Executive Vice President, Sales and Marketing, which expired on March 18, 2007. Ms. Hofmann’s employment was considered to be “at will” until her retirement which was effective February 8, 2008. Ms. Hofmann was eligible to participate in UCDP’s Long-Term Growth Plan, annual incentive plan, and other benefit plans that are generally available to employees of UCDP.

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Pension Benefits

We do not sponsor or maintain any defined benefit pension plans, supplemental defined contribution plans, supplemental defined contribution plans or other non-qualified pension or retirement plans. For information regarding retirement plans in which our employees participate by virtue of their employment by Vivendi Universal Entertainment, see the footnotes to the Summary Compensation Table.

Perquisites

We provide certain perquisites to our executives. These perquisites provide flexibility to the executives and increase travel efficiencies, allowing more productive use of executive time, in term allowing greater focus on activities related to our business. More detail on our perquisites may be found in the footnotes to the Summary Compensation Table.

Potential Payments upon Termination or Change in Control

We have an employment agreement with Mr. Sprouls that provides him with potential payments upon termination of his employment. For more information about these potential payments, please see “—Employment Agreements.”

Compensation Committee Interlocks and Insider Participation

Executive officer compensation is determined by one representative from each of the Holdings partners. The current designated representatives are Michael Chae and Tom Williams, on behalf of Blackstone and Universal CPM, respectively. Under our Partnership Agreement, the manager submits a proposal to the two representatives of the Holdings partners for their approval of the job descriptions, compensation packages and identities of each person to be hired for each of the 15 employees who, at that time, receive the highest compensation paid by the Partnership. As the Executive Vice President, Human Resources, Legal and Business Affairs for Universal Parks & Resorts, John Sprouls participates in the preparation of the proposal to the two representatives of Holdings partners. Mr. Sprouls is also the CEO of UCDP.

Compensation Committee Report

The representatives of Holdings have reviewed the Compensation Discussion and Analysis and discussed that Analysis with management. Based on their review and discussions with management, the representatives recommended to the Park Advisory Board that the Compensation Discussion and Analysis be included in the company’s Annual Report on Form 10-K for 2007. This report is provided by the following designated representatives of Holdings:

Thomas L. Williams

Michael Chae

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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Not applicable.

Item 13. Certain Relationships and Related Transactions

Vivendi Universal Entertainment’s special fee

Under UCDP’s partnership agreement, a “special fee” is payable to Vivendi Universal Entertainment through Universal CPM. The special fee is calculated at 5% of certain gross operating revenues, as defined in UCDP’s partnership agreement, generated from each of Universal Studios Florida and Universal’s Islands of Adventure. For 2007, 2006 and 2005, the special fee amounted to $38.4 million, $35.3 million and $35.3 million, respectively. For 2007, 2006 and 2005, the interest incurred on the deferred special fee payable to an affiliate of Vivendi Universal Entertainment, including the long term portion, was $7.5 million, $7.2 million and $6.1 million, respectively.

Under UCDP’s senior secured credit facility and the April 2010 notes, the special fee related to both Universal Studios Florida and Universal’s Islands of Adventure can only be paid upon achievement of certain but different leverage ratios. These ratios were met as of December 31, 2007 and 2006. In addition, Holdings purchased from Vivendi Universal Entertainment the right to receive from UCDP the most recently accrued $70,000,000 of deferred special fees relating to Universal’s Islands of Adventure for $70,000,000. Also, $50,000,000 of the next most recently accrued deferred special fees related to Universal’s Islands of Adventure and Universal Studios Florida was forgiven and treated as an equity contribution by both Vivendi Universal Entertainment and Blackstone. Pursuant to certain subordination agreements, the special fee may not be paid if there is an event of default (or to the knowledge of our officers a default) under UCDP’s credit agreements or April 2010 notes.

During 2007 and 2006, we paid total fees of $38.5 million and $35.9 million, respectively, to Vivendi Universal Entertainment. As of December 31, 2007 and 2006, the amounts due to Vivendi Universal Entertainment of approximately $9.0 million and $8.2 million, respectively were classified as current. In addition, at December 31, 2007 and 2006, we had accrued $87.6 million and $80.9 million related to the long-term portion of fees payable to an affiliate of Vivendi Universal Entertainment.

Partner distributions

In 2007, 2006 and 2005, we paid an aggregate of $113.3 million, $61.9 million and $52.6 million, respectively, in distributions to our partners. Additionally, at December 31, 2007 we have accrued $11.6 million in distributions that will be paid in April 2008 to the Partners for their expected payments of income taxes based on our financial results.

Other Partner Matters

Pursuant to a right of first refusal provision in an amended and restated partners’ agreement between Blackstone and Vivendi Universal Entertainment (the “partners’ agreement”), at any time after December 31, 2007, if either Blackstone or Vivendi Universal Entertainment desires to sell its ownership interest in Holding I and Holding II, it shall make a binding offer, specifying the proposed sale price, to sell to the other its entire interest in each of Holding I and Holding II. The non-offering partner will then have 90 days after receipt of an offer to accept the offer to sell. If the other party declines the opportunity to purchase, the offering party shall market both parties’ interest in Holdings to third parties, and both parties are required to sell their interests if a third party offers a price that is at least 90% of the price for both parties’ interests that is imputed from the offer made by the first party to the second party (i.e., as long as Vivendi Universal Entertainment and Blackstone each own 50% of Holdings, then both parties are required to sell to a third party that offers at least 180% of the price quoted by either party to the other party). If the interests in Holdings are not sold to a third party in connection with the marketing process, then the offering party shall be prohibited from making another offer to the other party for a period of one year from expiration date of the 90-day offer period, and during such period, the other party may agree to sell its ownership interest without restriction. If Blackstone exercises its rights under this provision by accepting a binding offer, it may result in 100% control and ownership of Holdings being acquired by Blackstone, which could pose a number of risks to our business. UCDP licenses the right to use the “Universal” name and a substantial number of intellectual properties as street entertainment characters and as themed elements in rides and attractions from the Universal License Parties. See “Item 1: Business—Intellectual property.” Our right to use the “Universal” name in connection with Universal Orlando continues indefinitely at no cost to us until the latest of (i) 30 months after a change of control (as described in UCDP’s partnership agreement), (ii) 30 months after any termination of the WB Agreement prior to its scheduled expiration, or (iii) the expiration of the WB Agreement in accordance with its terms. Under the Universal License Agreement, a change of control is described as when (a) Universal CPM is no longer a wholly owned subsidiary of USI, Vivendi Universal Entertainment, or any of their respective affiliates, or (b) the Universal License Parties do not own any interest in us. A change of control under UCDP’s license agreements, such as Blackstone or a third party unaffiliated with the Universal License Parties acquiring all of the partnership interests in us, would not necessarily constitute a change of control under the indentures governing the April 2010 notes and the May 2010 notes. If we are unable to use the “Universal” name, and if we are unable to partner with another similar, recognizable brand, the name recognition of our theme parks could be impaired.

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Reimbursement of UCDP’s manager’s costs

Our manager, Vivendi Universal Entertainment, provides us with goods and services relating to the management and operation of our theme parks, the costs of which are reimbursed to Vivendi Universal Entertainment under the terms of our partnership agreement. In 2007, 2006 and 2005, the total amount of costs we incurred for goods and services relating to the management and operation of our theme parks under the terms of our partnership agreement was $22.3 million, $21.4 million and $21.8 million, respectively. Goods and services provided by Vivendi Universal Entertainment include:

• Insurance—affiliates of our manager, Vivendi Universal, S.A. prior to May 11, 2004 and GE through NBC Universal subsequent to May 11, 2004, arrange multi-layered insurance coverage for our operations. We believe these insurance programs generally provide broader coverage at lower annual premiums than we could purchase on a standalone basis. In 2007, 2006 and 2005, the cost of insurance coverage allocated to us was $8.2 million, $8.7 million and $8.6 million, respectively.

• Creative Services—Universal Parks & Resort’s creative group designs new rides and attractions for all theme parks owned or operated by Vivendi Universal Entertainment. Costs for the creative group, which includes salaries, benefits and direct costs incurred on our behalf, are allocated to the theme parks based on actual time spent and therefore can vary from year to year. In 2007, 2006 and 2005, the costs of the creative group allocated to us were $3.1 million, $2.9 million and $3.3 million, respectively.

• Merchandise—Vivendi Universal Entertainment manages the design and procurement of merchandise for all theme parks it owns or operates to leverage purchasing power and supplier relationships and efficiencies. Vivendi Universal Entertainment allocates the cost of the merchandise management to the theme parks based upon relative merchandise revenues. In 2007, 2006 and 2005, the costs of merchandise management allocated to us were $2.5 million, $2.3 million and $2.2 million, respectively. In addition, we purchase merchandise directly from an affiliate of Vivendi Universal Entertainment from time to time based upon specific needs. In 2007, 2006 and 2005, these purchases amounted to $0.3 million, $0.1 million, and $0.1 million, respectively.

• Shared Executive Salaries—certain of our senior executives are employees of Vivendi Universal Entertainment or its affiliates. Vivendi Universal Entertainment allocates the full cost of the amount of time dedicated to our activities by each employee. In 2007, 2006 and 2005 the total amount of these costs allocated to us was $2.9 million, $2.0 million and $2.1 million, respectively.

• General Overhead—we also reimburse Vivendi Universal Entertainment for certain other costs it incurs in providing corporate support services for managing our theme parks. These costs relate to finance and legal services, international marketing, information systems and overhead. In addition, Vivendi Universal Entertainment and its affiliates enter into sponsorship agreements with various corporate partners that benefit the theme parks it owns or operates. Revenues and expenses are equitably allocated to the theme parks by Vivendi Universal Entertainment. In 2007, 2006 and 2005, the total amount of these costs allocated to us was $5.3 million, $5.4 million and $5.5 million, respectively.

Transactions with certain CityWalk operations

Vivendi Universal Entertainment, through a subsidiary, owns the Universal Studios Store, which leases space in CityWalk from us under customary and market lease agreements. In 2007, 2006 and 2005, the total rent earned by us for this store approximated $0.4 million each year. We have been managing the Universal Studios Store since 2002, and are paid a management fee of 5% of the gross sales generated at the store. In 2007, 2006 and 2005, the management fee earned by us was approximately $0.1 million each year.

Advisory services agreement

UCDP has an Advisory Services Agreement with Vivendi Universal Entertainment and Blackstone. Under the terms of the Advisory Services Agreement, each of Vivendi Universal Entertainment and Blackstone has agreed to provide us with advisory and consulting services in connection with the ongoing strategic and operational oversight of our affairs in such areas as financing structures, public and private offerings of debt and equity securities and property dispositions and acquisitions. Vivendi Universal Entertainment and Blackstone will each receive an annual advisory fee of $1.25 million. In 2007, 2006 and 2005, we incurred $2.5 million for the advisory fee.

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Directors’ fees

In 2007, the Agreement of Limited Partnership of Universal City Development Partners, Ltd. was amended to add a provision which permits VUE and Blackstone to be reimbursed up to $0.1 million each for payments made to their respective, appointed representatives to the Park Advisory Board, who function effectively as Directors of the Partnership. For the year ending December 31, 2007, UCDP paid $0.2 million under this amended provision.

Transactions with UCF Hotel Venture

Vivendi Universal Entertainment indirectly owns 25% of UCF Hotel Venture, which owns the three hotels at Universal Orlando Resort. We have a separate long-term ground lease relating to each hotel with UCF Hotel Venture. Under the leases, UCF Hotel Venture pays us rent based upon 1% of gross hotel revenues, plus an additional rent based upon certain cash flow thresholds. In 2007, 2006 and 2005, the total rent earned by us under the leases was $13.6 million, $10.8 million and $7.7 million, respectively.

Hotel guests may charge theme park passes, food, beverage and merchandise sold at our theme parks and food, beverage, merchandise and entertainment services sold at CityWalk venues owned or operated by us to their hotel room account by presenting their room key. We then collect this revenue by billing UCF Hotel Venture. In 2007, 2006 and 2005, total hotel room key charges from UCF Hotel Venture were $8.1 million, $7.7 million and $8.4 million, respectively.

Reciprocal covenants and easement agreement

Under a Reciprocal Covenants and Easement Agreement, we are required to provide bus and boat transportation for hotel guests between our theme parks and the UCF Hotel Venture hotels. We are also responsible for maintaining the related waterways and pedestrian walkways. UCF Hotel Venture reimburses us for 50% of these costs. In 2007, 2006 and 2005, UCF Hotel Venture’s portion of the total maintenance and operating costs related to transportation was $1.0 million, $1.0 million and $0.9 million, respectively.

We are also required to maintain all Universal Orlando Resort common areas, such as roadways and non-transportation roadways. UCF Hotel Venture reimburses us on a graduating scale as hotels open. In 2007, 2006 and 2005, the total common area maintenance costs from UCF Hotel Venture were $0.3 million per year.

We are responsible for hotel marketing. UCF Hotel Venture reimburses us up to 3.5% of each hotel’s revenue to cover marketing costs. In 2007, 2006 and 2005, the total hotel marketing costs from UCF Hotel Venture was $8.4 million, $7.8 million and $7.5 million, respectively.

Our tour operator, Universal Parks & Resorts Vacations, sells wholesale travel packages and receives travel agent commission for each reservation at one of the hotels and is reimbursed for credit card fees incurred. In 2007, 2006 and 2005, the total travel agent commissions earned through UCF Hotel Venture was $0.3 million, $0.2 million and $0.2 million, respectively, and the amounts for credit card fees was $0.2 million, $0.2 million and $0.1 million, respectively. In addition, Universal Parks & Resorts Vacations books hotel rooms on behalf of UCF Hotel Venture and receives a booking fee for each reservation. In 2007, 2006 and 2005, the total booking fees UCF Hotel Venture earned by us was $0.2 million, $0.2 million and $0.1 million, respectively.

The Resort Covenants and Reciprocal Easement Agreement requires us to offer to all guests of the UCF Hotel Venture hotels unlimited front-of-line access to all our theme park attractions at which such access was offered to such guests on September 7, 2007. We are permitted to sell front-of-line access passes to the general public at a price that is at least 20% of the then-applicable single park or combination park (as applicable) admission price per person, provided that we cannot offer unlimited front-of-line access benefits to hotels other than the UCF Hotel Venture hotels (although we may sell front-of-line access to guests at such other hotels through our guest service desks that may be located at such other hotels).

In the event that Vivendi Universal Entertainment sells its interest in UCF Hotel Venture and Loews Hotels does not also, in the same transaction, sell its interest in UCF Hotel Venture, we will lose our right to provide the marketing for the UCF Hotel Venture hotels, although, in such case, we will be permitted to engage in additional marketing with other hotels in the Orlando area. Even if we lose our right to provide the marketing for the UCF Hotel Venture hotels, we are still entitled to receive from UCF Hotel Venture the Resort Marketing Fee in the amount of 0.5% of the gross revenues of the UCF Hotel Venture.

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Transactions with other theme parks owned by Vivendi Universal Entertainment

Vivendi Universal Entertainment owns the Wet n Wild^® water park in Orlando. We participate with other Orlando theme parks, including Wet n Wild^®, in an Orlando FlexTicket program which we manage and which permits a customer to visit our theme parks, Wet n Wild^®, Sea World^® Orlando and Busch Gardens^® Tampa Bay. Revenue sharing is negotiated and agreed upon by all theme park participants at the beginning of each year, based on attendance share at each attraction participating in the Orlando FlexTicket program. In 2007, 2006 and 2005, our share of revenue from the Orlando FlexTicket program was $38.6 million, $39.3 million and $44.2 million, respectively. In 2007, 2006 and 2005, Wet n Wild^®’s share was $7.3 million, $7.4 million and $8.3 million, respectively.

We purchase food and alcohol supplies for Wet n Wild^® to enable Wet n Wild^® to benefit from our purchasing relationships. Although Wet n Wild^® does not pay us a fee or commission for this service we benefit from lower food and alcohol prices as a result of our increased buying power.

For our rides and attractions that are also developed for other Universal theme parks by the creative group of Vivendi Universal Entertainment, we share research and development costs. These costs are allocated pro rata among the various Universal theme parks that are building the ride or attraction.

From time to time we may enter into arrangements with other theme parks owned or operated by Vivendi Universal Entertainment to share the expertise of certain employees with other parties. We may enter into similar arrangements with other theme parks that Vivendi Universal Entertainment or its affiliates may develop in the future. Services rendered to affiliates are either reimbursed or paid directly by the affiliate.

Vivendi Universal Entertainment has entered into licensing arrangements for Universal theme parks in Singapore and Dubai, which will use our technology and schematics for various components on some of their rides. For the year ended December 31, 2007, we received approximately $6.9 million from these parks as capital reimbursements.

Transactions with NBC Universal and GE

As a result of the NBC Universal Transaction we are realizing synergies with other NBC Universal businesses which include cross-promotion with a variety of NBC Universal television and cable services, in particular, advertising time on the NBC television network and other promotions. In response, NBC television and cable services receive visual identification in our parks. We estimate the value of both sides of this transaction for 2007, 2006 and 2005 to be $5.1 million, $4.7 million and $3.0 million, respectively.

We lease certain trailers through a subsidiary of GE. During the year ended December 31, 2007, the cost of these leases was approximately $0.2 million. The majority of these leases expire in 2010, while the minimum future lease payments under the leases totaled approximately $0.5 million as of December 31, 2007. These leases existed prior to the NBC Universal Transaction.

We also have a sponsorship agreement with GE Money Bank.

Partners’ capital contribution

In February 2008, the partners entered into a contribution agreement (“the 2008 Contribution Agreement”) with UCDP, allowing UCDP to request, through Holdings, cash contributions not to exceed a total of $50.0 million to fund ongoing capital expenditure needs. The capital expenditures funded from such capital contributions will not count against the limitations on capital expenditures under UCDP’s senior secured credit agreement with JPMorgan Chase.

Blackstone loans

In late 2004, JPMorgan Chase Bank and another lender made loans to our equity holders that are controlled by Blackstone in the aggregate principal amount of $178.0 million and made commitments for additional loans of up to $52.0 million under a revolving credit facility. The obligations of the borrowers under the loans are secured by their equity interests in us and are guaranteed by NBC Universal on a deficiency basis, subject to the terms of the guarantee. The loans will mature in five years. Blackstone and NBC Universal have agreed to cooperate to obtain refinancing of the loans, if not fully paid at that time, with credit enhancement provided by NBC Universal. All future distributions received by the borrowers from us are to be applied to the payment of interest and repayment of the loans. It is anticipated that the only assets of the borrowers will be their equity interests in us. In connection with the 2008 Contribution Agreement Blackstone amended its loan to allow for the capital contribution.

Consultant agreement

UCDP has an agreement (the “Consultant Agreement”) with a Consultant (as defined in Item 7) under which UCDP pays a fee for consulting services and exclusivity equal to a percentage of UCDP’s gross revenues from the attractions and certain facilities owned or operated, in whole or in part, by UCDP. Under the terms of the Consulting Agreement, the Consultant is also entitled to a fee based on the gross revenues of all gated motion picture and/or television themed attractions owned or operated, in whole or in part, by UCDP, any of UCDP’s partners or any of their affiliates (“comparable projects”), other than at Universal City, California. At present, the only theme park that is a comparable project is Universal Studios Japan in Osaka, Japan. It is possible that comparable projects will be created in the future that would fall under the consulting agreement.

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For 2007, 2006 and 2005, the fees incurred by us under this agreement for our parks were approximately $19.6 million, $18.1 million and $17.8 million, respectively. Fees with respect to Universal Studios Japan are paid by an affiliate of Vivendi Universal Entertainment and are not paid by us. The unpaid fees were approximately $4.2 million and $4.0 million, respectively, as of December 31, 2007 and 2006. These amounts were paid in the following year. The Consultant may also be entitled to participate in certain sales of equity by our partners and to participate in certain real estate development activities of our partners or their affiliates.

Although the agreement has no expiration date, starting in June 2010, the Consultant has the right upon 90 days notice to terminate the periodic payments under the agreement and receive instead one cash payment equal to the fair market value of the Consultant’s interest in our parks and all comparable projects that have been open at that time for at least one year. If the parties cannot agree on the fair market value of the buyout option, fair market value will be determined by a binding appraisal procedure. We represented under the agreement that the Consultant’s interest in each of our parks and in any comparable projects will have priority over the interests of all financiers, lenders and others who may have an interest in that park or project. Our obligations under the agreement are guaranteed by Universal Studios, Inc., as successor to MCA Inc., and Universal Studios, Inc.’s obligations under that guarantee have in turn been assumed by Vivendi Universal Entertainment. Vivendi Universal Entertainment has indemnified us against any liability under the consulting agreement related to any comparable project that is not owned or controlled by us. Under the terms of the May 2010 notes, the April 2010 notes and our senior secured credit agreement, a lien to secure our obligations under the Consultant agreement would be a permitted lien.

Item 14. Principal Accounting Fees and Services

Audit Fees

Fees for audit services rendered by Ernst & Young LLP totaled approximately $441,000 and $441,000 for the fiscal years ended December 31, 2007 and 2006, respectively, including fees associated with the annual audits, reviews of our quarterly reports on Form 10-Q, assistance with the review of documents filed with the SEC, and accounting consultations.

Audit-Related Fees

None.

Tax Fees

None.

All Other Fees

For the years ended December 31, 2007 and 2006, the aggregate fees billed to us for other products or services provided by Ernst & Young LLP, other than the services reported above, were $1,500 and $1,500, respectively. The services provided consisted of a subscription to an accounting website.

Audit Committee Pre-Approval Policies

The duties and responsibilities of our Audit Committee include the pre-approval of all audit, audit related, tax, and other services permitted by law or applicable SEC regulations (including fee and cost ranges) to be performed by our independent registered public accounting firm. Any pre-approved services that will involve fees or costs exceeding pre-approved levels will also require specific pre-approval by the Audit Committee. Unless otherwise specified by the Audit Committee in pre-approving a service, the pre-approval will be effective for the 12-month period following pre-approval. The Audit Committee will not approve any non-audit services prohibited by applicable SEC regulations or any services in connection with a transaction initially recommended by the independent registered public accounting firm, the purpose of which may be tax avoidance and the tax treatment of which may not be supported by the Internal Revenue Code and related regulations.

Our Audit Committee requires that our independent registered public accounting firm, in conjunction with our Principal Financial Officer, be responsible for seeking pre-approval for providing services to us and that any request for pre-approval must inform the Audit Committee about each service to be provided and must provide detail as to the particular service to be provided.

All of the services provided by Ernst & Young LLP described above were approved by our Audit Committee.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)	Financial Statements and Financial Statement Schedules
		(1)	Consolidated Financial Statements. Consolidated Financial Statements are listed in the Index to Consolidated Financial Statements on page 42 of this report
		(2)	Consolidated Financial Statement Schedules.
			No financial statement schedules are included because they are not applicable, are not required, or because required information is included in the financial statements or the notes thereto.
(b)		Exhibits
			The following is a list of exhibits required by Item 601 of Regulation S-K to be filed as part of this Report. Where so indicated by footnote, exhibits that were previously filed are incorporated by reference. For exhibits incorporated by reference, the location of the exhibit in the previous filing is indicated in parentheses.

Exhibit Number	Exhibit Description
3.1	Amended and Restated Agreement of Limited Partnership of Universal City Development Partners, Ltd., dated as of June 5, 2002, between Universal City Florida Holding Co. II, as sole general partner, and Universal City Florida Holding Co. I, as sole limited partner incorporated herein by reference to Exhibit 3.1 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003, registration number 333-108661
3.2	Articles of Incorporation of UCDP Finance, Inc. incorporated herein by reference to Exhibit 3.2 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003, registration number 333-108661
3.3	Bylaws of UCDP Finance, Inc. incorporated herein by reference to Exhibit 3.3 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003, registration number 333-108661
4.1	Indenture dated as of December 9, 2004 among Universal City Florida Holding Co. I, Universal City Florida Holding Co. II, UCFH I Finance, Inc., UCFH II Finance, Inc. and The Bank of New York Trust Company, N.A. Previously filed as Exhibit 4.1 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
4.2	Second Supplemental Indenture among Universal City Development Partners, Ltd., UCDP Finance, Inc., Universal City Travel Partners and The Bank of New York dated as of December 9, 2004. Previously filed as Exhibit 4.2 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
4.3	Indenture dated as of March 28, 2003, as amended by the First Supplemental Indenture dated as of June 12, 2003, among Universal City Development Partners, Ltd. and UCDP Finance, Inc., as issuers, and The Bank of New York, as trustee incorporated herein by reference to Exhibit 4.1 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003, registration number 333-108661
4.4	Registration Rights Agreement dated as of March 28, 2003, among Universal City Development Partners, Ltd., UCDP Finance, Inc., J.P. Morgan Securities Inc., Bank of America Securities LLC, Credit Suisse First Boston LLC, Scotia Capital (USA) Inc. and Wachovia Securities, Inc. incorporated herein by reference to Exhibit 4.2 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003, registration number 333-108661

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Exhibit Number	Exhibit Description
4.5	Subordination Agreement dated as of March 28, 2003, among Vivendi Universal Entertainment LLLP, Universal Studios, Inc., Universal City Property Management II LLC, Universal City Florida Holding Co. I, Universal City Florida Holding Co. II, Additional Creditors (as defined therein), Universal City Development Partners, Ltd. and The Bank of New York, as trustee incorporated herein by reference to Exhibit 4.3 to Universal City Development Partners, Ltd.’s and UCDP Finance Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
4.6	First Amendment dated as May 25, 2007 to the Amended and Restated Agreement of Limited Partnership of Universal City Development Partners, Ltd., dated as of June 5, 2002, between Universal City Florida Holding Co. II, as sole general partner, and Universal City Florida Holding Co. I, as sole limited partner. Previously filed as Exhibit 3.4 to our report on Form 10-Q filed on August 10, 2007.
4.7	Second Amendment dated November 7, 2007 to the Amended and Restated Agreement of Limited Partnership of Universal City Development Partners, Ltd., dated as of June 5, 2002, between Universal City Florida Holding Co. II, as sole general partner, and Universal City Florida Holding Co. I, as sole limited partner. Previously filed as Exhibit 3.6 to our report on Form 10-Q filed on November 13, 2007.
10.1	Advisory Services Agreement effective as of January 1, 2002, among Universal City Development Partners, Ltd., Vivendi Universal Entertainment LLLP and Blackstone Management Partners L.P. incorporated herein by reference to Exhibit 10.1 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.2	License Agreement dated as of March 28, 2002, among Universal Studios, Inc., Universal City Studios, Inc., Universal City Property Management Company II and Universal City Development Partners, LP incorporated herein by reference to Exhibit 10.2 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.3	UCF Hotel Venture Ground Lease dated as of June 12, 1998 between Universal City Development Partners, Universal City Florida Partners and UCF Hotel Venture incorporated herein by reference to Exhibit 10.3 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.4	Second Amendment to UCF Hotel Venture Ground Lease dated as of February 20, 2001. Previously filed as Exhibit 10.4 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.5	Universal Orlando Long-Term Growth Plan incorporated herein by reference to Exhibit 10.4 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.6	UCDP Variable Deferred Compensation Plan incorporated herein by reference to Exhibit 10.5 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.7	Employment Agreement dated April 26, 2002, between Universal Studios, Inc. and Robert Gault incorporated herein by reference to Exhibit 10.7 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.8	Employment Agreement dated as of December 7, 1999, between Universal Studios, Inc. and John Sprouls. Previously filed as Exhibit 10.8 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.9	Amendment to Employment Agreement of John Sprouls dated as of October 11, 2001. Previously filed as Exhibit 10.9 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.10	Extension of Employment Agreement of John Sprouls dated August 22, 2002. Previously filed as Exhibit 10.10 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).

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Exhibit Number	Exhibit Description
10.11	Amendment to Employment Agreement of John Sprouls dated July 8, 2003. Previously filed as Exhibit 10.11 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.12	Employment Agreement dated September 1, 2000, between Universal Studios, Inc. and Michael Short incorporated herein by reference to Exhibit 10.9 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.13	Employment Agreement dated March 12, 2001, between Universal City Florida Partners and Gretchen Hofmann incorporated herein by reference to Exhibit 10.10 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.14	Form Universal Orlando Employment Agreement incorporated herein by reference to Exhibit 10.11 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.15	Vivendi Universal, S.A. Stock Option Plan incorporated herein by reference to Exhibit 10.12 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.16	Annual Incentive Plan incorporated herein by reference to Exhibit 10.13 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.17	Agreement of Limited Partnership of JB/Universal City Restaurant Partners, L.P. dated as of September 11, 1997, between Universal City Development Partners and Margaritaville Holdings LLC incorporated herein by reference to Exhibit 10.14 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
10.18	Amendment No. 3 dated as of January 9, 2004 to Agreement of Limited Partnership of JB/ Universal City Restaurant Partners, L.P. dated as of September 11, 1997, between Universal City Development Partners, Ltd. and Margaritaville Holdings LLC. Previously filed as Exhibit 10.19 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.19	Refunding Cooperation Agreement dated as of August 12, 2002, between the City of Orlando Florida, City of Orlando Florida Community Redevelopment Agency and Universal City Development Partners, Ltd. incorporated herein by reference to Exhibit 10.15 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on September 10, 2003 (registration number 333-108661).
*10.20	Consultant Agreement dated as of January 20, 1987, between the Consultant and Universal City Florida Partners incorporated herein by reference to Exhibit 10.22 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on November 19, 2003 (registration number 333-108661).
*10.21	Letter Agreement dated July 15, 2003 among Diamond Lane Productions, Vivendi Universal Entertainment LLLP and Universal City Development Partners, Ltd. Previously filed as Exhibit 10.22 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.22	Indemnity Agreement dated as of March 6, 2003, by Vivendi Universal Entertainment LLLP in favor of Universal City Development Partners, Ltd. incorporated herein by reference to Exhibit 10.23 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on November 19, 2003 (registration number 333-108661).
*10.23	Formal Agreement between Dr. Seuss Enterprises, L.P. and MCA Inc. dated as of April 21, 1994 incorporated herein by reference to Exhibit 10.24 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on November 19, 2003 (registration number 333-108661).

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Exhibit Number	Exhibit Description
*10.24	Marvel Agreement dated March 22, 1994, between MCA Inc. and Marvel Entertainment Group incorporated herein by reference to Exhibit 10.25 to Universal City Development Partners, Ltd.’s and UCDP Finance, Inc.’s Registration Statement on Form S-4 filed on November 19, 2003 (registration number 333-108661).
10.25	Amendment to UCDP Variable Deferred Compensation Plan. Previously filed as Exhibit 10.26 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.26	Universal Orlando 401(k) Retirement Plan. Previously filed as Exhibit 10.27 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.27	Amendment Number One to Universal Orlando 401(k) Retirement Plan. Previously filed as Exhibit 10.28 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.28	The Schwab plan Directed Employee Benefit Trust Agreement. Previously filed as Exhibit 10.29 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.29	Amended and Restated Credit Agreement dated as of December 9, 2004 among Universal City Development Partners, Ltd., a Florida limited partnership, JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank), as administrative agent (and as collateral agent) and Bank Of America, N.A., as syndication agent incorporated herein by reference to Exhibit 4.4 to Universal City Development Partners, Ltd.’s Form 8-K Current Report filed on December 15, 2004 (registration number 333-108661).
10.30	Transaction Agreement by and among Blackstone UTP Capital Partners L.P., Blackstone UTP Capital Partners A L.P., Blackstone UTP Offshore Capital Partners L.P., Blackstone Family Media Partnership III L.P., Universal City Property Management II LLC, USI Entertainment Inc., Vivendi Universal Entertainment LLLP, Universal Studios, Inc., NBC Universal, Inc., Universal City Florida Holding Co. I and Universal City Florida Holding Co. II dated as of December 9, 2004. Previously filed as Exhibit 10.31 to our registration statement on Form S-4 filed February 14, 2005 (registration number 333-122778).
10.31	Extension of Employment Agreement of Gretchen Hoffmann, dated December 1, 2004. Previously filed as Exhibit 10.32 to our registration statement on Form S-4 filed March 22, 2005 (registration number 333-122778).
10.32	Post-2004 Universal City Development Partners, Ltd. Variable Deferred Compensation Plan for Executives. Previously filed as Exhibit 10.1 to our report on Form 10-Q filed August 15, 2005.
10.33	Long-term Growth Plan. Previously filed as Exhibit 10.1 on our report on Form 8-K filed September 9, 2005.
10.34	Employment Agreement between Vivendi Universal Entertainment LLLP and Michael Short, dated April 4, 2005. Previously filed as Exhibit 10.34 to our report on Form 10-K filed March 30, 2006
10.35	Employment Agreement between Universal Studios, Inc. and J. Michael Hightower, dated April 25, 2002. Previously filed as Exhibit 10.35 to our report on Form 10-K filed March 30, 2006
10.36	Employment Agreement between Universal City Development Partners, Ltd. and Richard Florell, dated June 26, 2002. Previously filed as Exhibit 10.36 to our report on Form 10-K filed March 30, 2006
10.37	Extension of Employment Agreement of J. Michael Hightower dated September 29, 2003. Previously filed as Exhibit 10.37 to our report on Form 10-K filed March 30, 2006
10.38	Extension of Employment Agreement of J. Michael Hightower dated August 28, 2004. Previously filed as Exhibit 10.38 to our report on Form 10-K filed March 30, 2006
10.39	Employment Agreement Option Letter of Richard Florell dated June 14, 2005. Previously filed as Exhibit 10.39 to our report on Form 10-K filed March 30, 2006
10.40	Employment Agreement between Vivendi Universal Entertainment LLLP and Robert Gault, Jr. dated October 12, 2004. Previously filed as Exhibit 10.40 to our report on Form 10-K filed March 30, 2006
10.41	Amendment to Employment Agreement of John R. Sprouls dated April 28, 2006. Previously filed as Exhibit 10.1 to our report on Form 8-K filed May 4, 2006.
10.42	Employment agreement of William Davis dated October 20, 2006. Previously filed as Exhibit 10.1 to our report on Form 8-K filed November 3, 2006.

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Exhibit Number	Exhibit Description
10.43	Amendment to Employment Agreement of Tracey L. Stockwell dated January 23, 2007. Previously filed as Exhibit 10.2 to our report on Form 8-K filed January 25, 2007.
10.44	Extention to Employment Agreement of Richard T. Florell dated October 8, 2007. Previously filed as Exhibit 10.1 to our report on Form 8-K filed December 19, 2007.
10.45	Contribution Agreement by and among Blackstone UTP Capital L.L.C., Blackstone UTP Capital A L.L.C., Blackstone UTP Offshore Capital L.L.C., Blackstone Family Media III L.L.C., Universal City Property Management II LLC, Universal City Development Partners, Ltd., Universal City Florida Holding Co. I and Universal City Florida Holding Co. II dated as of February 29, 2008. Previously filed as Exhibit 99.1 to our report on Form 8-K filed March 6, 2008.
10.46	First Amendment dated May 25, 2007 to the License Agreement dated as of March 28, 2002, among Universal Studios, Inc., Universal City Studios, Inc., Universal City Property Management Company II and Universal City Development Partners, LP. Previously filed as Exhibit 10.40 to our report on Form 10-Q on August 10, 2007.
10.47	License Agreement dated as of May 25, 2007, among Warner Bros. Consumer Products Inc. and Universal City Development Partners, Ltd. Previously filed as Exhibit 10.41 to our report on Form 10-Q on August 10, 2007.
10.48	Amended and Restated Post-2004 Universal City Development Partners, Ltd. Variable Deferred Compensation Plan for Executives.
12.1	Computation of Ratios of earnings to fixed charges for the years ended December 31, 2007, December 31, 2006 and December 31, 2005
14.1	Universal City Development Partners, Ltd and UCDP Finance, Inc. Code of Ethics
14.2	General Electric Company Code of Conduct
21.1	List of Subsidiaries of Universal City Florida Holding Co. I, Universal City Florida Holding Co. II, UCFH I Finance, Inc. and UCFH II Finance, Inc. incorporated herein by reference to Exhibit 21.1 to Universal City Florida Holding Co. I’s, Universal City Florida Holding Co. II’s, UCFH I Finance, Inc.’s and UCFH II Finance, Inc’s Registration Statement on Form S-4 filed on February 14, 2005, registration number 333-122778.
31.1	Certification of Principal Executive Officer of Universal City Development Partners, Ltd. Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
31.2	Certification of Principal Financial Officer of Universal City Development Partners, Ltd. Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
31.3	Certification of Principal Executive Officer of UCDP Finance, Inc. Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
31.4	Certification of Principal Financial Officer of UCDP Finance, Inc. Pursuant to Rule 13a-14(a) or Rule 15d-14(a)
32.1	Certification of Principal Executive Officer of Universal City Development Partners, Ltd. Pursuant to 18 U.S.C. Section 1350
32.2	Certification of Principal Financial Officer of Universal City Development Partners, Ltd. Pursuant to 18 U.S.C. Section 1350
32.3	Certification of Principal Executive Officer of UCDP Finance, Inc. Pursuant to 18 U.S.C. Section 1350
32.4	Certification of Principal Financial Officer of UCDP Finance, Inc. Pursuant to 18 U.S.C. Section 1350

* Filed with confidential treatment requested as to certain portions, which portions were omitted and filed separately with the Securities and Exchange Commission.

84

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD.
Date: March 20, 2008	By:	/s/ Tracey L. Stockwell
	Name:	Tracey L. Stockwell
	Title:	Principal Financial and Accounting Officer
	UCDP FINANCE, INC.
Date: March 20, 2008	By:	/s/ Tracey L. Stockwell
	Name:	Tracey L. Stockwell
	Title:	Treasurer (Principal Financial and Accounting Officer)

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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.

Name	Title	Date
/s/ JOHN R. SPROULS John R. Sprouls	Principal Executive Officer of Universal City Development Partners, Ltd. and President (principal executive officer) of UCDP Finance, Inc.	March 20, 2008
/s/ TRACEY L. STOCKWELL Tracey L. Stockwell	Principal Financial and Accounting Officer of Universal City Development Partners, Ltd. and Treasurer (principal financial and accounting officer) of UCDP Finance, Inc.	March 20, 2008
/s/ THOMAS L. WILLIAMS Thomas L. Williams	Park Advisory Board Representative and Director of UCDP Finance, Inc.	March 20, 2008
/s/ SALIL K. MEHTA	Park Advisory Board Representative	March 20, 2008
Salil K. Mehta
/s/ CHRISTY R. SHIBATA	Park Advisory Board Representative	March 20, 2008
Christy R. Shibata
/s/ MICHAEL S. CHAE Michael S. Chae	Park Advisory Board Representative and Director of UCDP Finance, Inc.	March 20, 2008
/s/ THOMAS B. MCGRATH	Park Advisory Board Representative	March 20, 2008
Thomas B. McGrath
/s/ JILL GREENTHAL	Park Advisory Board Representative	March 20, 2008
Jill Greenthal

86

EX-10.48

Exhibit 10.48

Post-2004 Universal City Development Partners, Ltd.

Variable Deferred Compensation Plan

for

Executives

Plan Document

As Amended and Restated

Effective January 1, 2007

(Effective for Deferrals after December 31, 2004)

ARTICLE 1. PURPOSE

The purpose of the Post-2004 Universal City Development Partners Variable Deferred Compensation Plan for Executives (the “Plan”) is to provide a means whereby Universal City Development Partners, Ltd. (the “Company”) may afford increased financial security, on a tax-favored basis, to a select group of key management employees of the Company who have rendered and continue to render valuable services to the Company which constitute an important contribution towards the Company’s continued growth and success, by providing for additional future compensation so that such employees may be retained and their productive efforts encouraged.

This document is applicable to deferrals of salary and bonus otherwise payable on and after January 1, 2005. Salary and bonus deferred prior to January 1, 2004 is controlled by, and subject to, the terms of the Universal City Development Partners Variable Deferred Compensation Plan for Executives (the “Prior Plan”), as in effect on January 1, 2004 and as it may subsequently be modified. Elections made by Participants under the terms of this Plan document shall not modify elections made under the terms of the Prior Plan and vice versa.

The Plan was amended and restated effective January 1, 2007, to revise the Distribution Options available to Plan participants, and to comply with the requirements of Internal Revenue Code Section 409A.

ARTICLE 2. DEFINITIONS

Section 2.1. Affiliate. “Affiliate” means any firm, partnership, or corporation that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Company, within the meaning of Code Sections 414(b) or 414(c); provided that for purposes of determining when a Participant has incurred a Separation from Service, the phrase “at least 50 percent” shall be used in place of “at least 80 percent” in each place that phrase appears in the regulations thereunder. “Affiliate” also includes the Universal Studios, Inc., Blackstone Group LP (and, for periods before purchase of its interest by Blackstone Group LP, Rank Organization PLC), their Affiliates and any other organization similarly related to the Company that is designated as an Affiliate by the Committee.

Section 2.2. Base Salary. “Base Salary” means, with respect to a Participant for any Plan Year, such Participant’s annual base salary before deferral pursuant to this Plan or any agreement or any other plan of the Company whereby compensation is deferred, including, without limitation, a plan whereby compensation is deferred in accordance with Internal Revenue Code Section 401(k) or reduced in accordance with Code Section 125.

Section 2.3. Base Salary Deferral. “Base Salary Deferral” means, for Plan Years beginning on or after January 1, 2007, that portion of Base Salary which an Eligible Employee has made an annual irrevocable election to defer receipt of until the date specified under the Flexible Distribution Option and/or the Retirement Distribution Option. For Plan Years ending on or before December 31, 2006, “Base Salary Deferral” meant that portion of the Base Salary which an Eligible Employee made an annual irrevocable election to defer receipt of until the date specified under the In-Service Distribution Option and/or the Retirement Distribution Option.

Section 2.4. Beneficiary. “Beneficiary” means the person or persons designated as such in accordance with Section 11.4.

Section 2.5. Bonus Compensation. “Bonus Compensation” means, with respect to a Participant for any Plan Year, such Participant’s bonus compensation before deferral pursuant to this Plan or any agreement or any other plan of the Company whereby compensation is deferred, including, without limitation, a plan whereby compensation is deferred in accordance with Code Section 401(k) or reduced in accordance with Code Section 125.

Section 2.6. Bonus Compensation Deferral. “Bonus Compensation Deferral” means, for Plan Years beginning on or after January 1, 2007, that portion of Bonus Compensation which an Eligible Employee has made an annual irrevocable election to defer receipt of until the date specified under the Flexible Distribution Option and/or the Retirement Distribution Option. For Plan Years ending on or before December 31, 2006, “Bonus Compensation Deferral” meant that portion of Bonus Compensation to which an Eligible Employee made an annual irrevocable election to defer receipt of until the date specified under the In-Service Distribution Option and/or the Retirement Distribution Option.

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Section 2.7. Code. “Code” means the Internal Revenue Code of 1986, as amended from time to time.

Section 2.8. Committee. “Committee” means the persons appointed by the Company to administer the Plan.

Section 2.9. Company. “Company” means Universal City Development Partners, Ltd.

Section 2.10. Disabled. “Disabled” means a mental or physical condition which qualifies a Participant for benefits under the Company’s insured Long Term Disability Plan, which renders the Participant unable to engage in any substantial gainful activity and which is a medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.

Section 2.11. Distribution Option. “Distribution Option” means the distribution options which are available under the Plan, consisting of the Flexible Distribution Option, the Retirement Distribution Option and the In-Service Distribution Option.

Section 2.12. Distribution Option Account. “Distribution Option Account” or “Accounts” means, with respect to a Participant, the Flexible Distribution Account, the Retirement Distribution Account and/or the In Service Distribution Account established on the books of account of the Company, pursuant to Section 5.1, for each Distribution Option Period.

Section 2.13. Distribution Option Period. “Distribution Option Period” means, for Plan Years ending on or before December 31, 2006, each period of not more than five (5), Plan Years, as were designated by the Committee from time to time, for which an Eligible Employee elected, in his Enrollment Agreement, the time and manner of payment of amounts credited to his Distribution Option Accounts for such Plan Years.

Section 2.14. Earnings Crediting Options. “Earnings Crediting Options” means the investment fund options selected by the Participant from time to time pursuant to which earnings are credited to the Participant’s Distribution Option Accounts.

Section 2.15. Effective Date. “Effective Date” means the original effective date of the Plan, which is January 1, 2005.

Section 2.16. Eligible Employee. “Eligible Employee” means an Employee who is a member of the group of selected management and/or highly compensated employees of the Company designated by the Committee as eligible to participate in the Plan.

Section 2.17. Employee. “Employee” means any person employed by the Company on a regular full-time salaried basis or who is an officer of the Company.

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Section 2.18. End Termination Date. “End Termination Date” means the date of a Participant’s Separation from Service with the Company and its Affiliates.

Section 2.19. Enrollment Agreement. “Enrollment Agreement” means the authorization form which an Eligible Employee files with the Company to participate in the Plan.

Section 2.20. Flexible Distribution Account. “Flexible Distribution Account” means the Account maintained for a Participant with respect to any particular Plan Year beginning on or after January 1, 2007, to which Base Salary and/or Bonus Compensation and Company Matching Contributions deferred by a Participant pursuant to the Flexible Distribution Option are credited.

Section 2.21. Flexible Distribution Option. “Flexible Distribution Option” means the Distribution Option pursuant to which benefits are payable in accordance with Section 7.2.

Section 2.22. In-Service Distribution Account. “In-Service Distribution Account” means the Account maintained for a Participant during Distribution Option Periods commencing prior to December 31, 2006, to which Base Salary and/or Bonus Compensation and Company Matching Contributions deferred by a Participant pursuant to the In-Service Distribution Option were credited.

Section 2.23. In-Service Distribution Option. “In-Service Distribution Option” means the Distribution Option pursuant to which benefits were payable in accordance with Section 7.3 during Distribution Option Periods commencing prior to December 31, 2006.

Section 2.24. Key Employee. “Key Employee” means, in the event the Company becomes a publicly-traded company the stock of which is traded on an established securities market, a Participant who is a key employee (as defined in Code Section 416(i), but without regard to Code Section 416(i)(5)). In such event, a Participant shall be a Key Employee under Code Section 416(i) if he meets the requirements of Code Sections 416(i)(1)(A)(i), (ii) or (iii), applied in accordance with the regulations issued under Code Section 416, but disregarding Code Section 416(i)(5), at any time during the 12-month period ending on an identification date. If a Participant is a key employee under Code Section 416 as of an identification date, the Participant shall be treated as a Key Employee for the 12-month period beginning on the first day of the fourth (4^th) month following the identification date. The identification date for the Plan shall be September 30 of each calendar year. A Participant who satisfies the foregoing requirements for key employee status under Code Section 416 as of September 30 of a calendar year shall be treated as a Key Employee of the Plan for the following Plan Year.

Section 2.25. Matching Contributions. “Matching Contributions” are, for Plan Years ending on or before December 31, 2006, those contributions credited to the Participant’s In-Service Distribution Account and Retirement Distribution Account by the Company in accordance with Section 4.4. For such Plan Years, Matching Contributions were to be

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allocated between the Participant’s In-Service Distribution Account and Retirement Distribution Account in proportion to the Participant’s deferrals to those accounts. For Plan Years beginning on or after January 1, 2007, “Matching Contributions” are those contributions credited to the Participant’s Flexible Distribution Account and Retirement Distribution Account by the Company in accordance with Section 4.4. For these Plan Years, Matching Contributions are to be allocated between the Participant’s Flexible Distribution Account and Retirement Distribution Account in proportion to the Participant’s deferrals to those accounts.

Section 2.26. Participant. “Participant” means an Eligible Employee who has filed a completed and executed Enrollment Agreement with the Committee or its designee and is participating in the Plan in accordance with the provisions of Article 4.

Section 2.27. Plan. “Plan” means this plan, called the Post-2004 Universal City Development Partners Ltd. Variable Deferred Compensation Plan for Executives, as amended from time to time.

Section 2.28. Plan Year. “Plan Year” means the 12 month period beginning on each January 1 and ending on the following December 31. The first Plan Year begins January 1, 2005.

Section 2.29. Qualified Plan. “Qualified Plan” means the S.T.A.R.S. (Save to Achieve Retirement Success) (formerly known as the Universal Studios Florida Retirement Plan Plus) or any successor plan which allows for compensation deferrals in accordance with Internal Revenue Code Section 401(k).

Section 2.30. Retirement. “Retirement” means the Participant’s Separation from Service with the Company (for reasons other than death or becoming Disabled) at or after age 65, or, if the Participant has 10 or more years of Service, at or after age 55.

Section 2.31. Retirement Distribution Account. “Retirement Distribution Account” means, for Plan Years ending on or before December 31, 2006, the Account maintained for a Participant for each Distribution Option Period commencing prior to December 31, 2006, to which the Company Matching Contributions, Base Salary and/or Bonus Compensation deferred by a Participant pursuant to the Retirement Distribution Option are credited. For Plan Years beginning on or after January 1, 2007, “Retirement Distribution Account” means the Account maintained for a Participant for each Plan Year to which the Company Matching Contributions, Base Salary and/or Bonus Compensation deferred by a Participant pursuant to the Retirement Distribution Option are credited.

Section 2.32. Retirement Distribution Option. “Retirement Distribution Option” means the Distribution Option pursuant to which benefits are payable in accordance with Section 7.1.

Section 2.33. Separation from Service. “Separation from Service” means a Participant’s termination of employment from the Company, provided that the facts and circumstances indicate that, as of the Participant’s End Termination Date, the Company and

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the Participant reasonably believed that the Participant would perform no further services for the Company after the Participant’s End Termination Date, or believed that the level of services the Participant would perform for the Company after such date (either as an employee or an independent contractor) would permanently decrease below the default levels set forth in Regulations issued under Code Section 409A.

Section 2.34. Service. “Service” means the period of time during which an employment relationship exists between an Employee and the Company, including any period during which the Employee is on an approved leave of absence, whether paid or unpaid. “Service” also includes an Employee’s employment with an Affiliate if the Employee transfers directly between the Company and the Affiliate.

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ARTICLE 3. ADMINISTRATION OF THE PLAN

The Committee is hereby authorized to administer the Plan and establish, adopt, or revise such rules and regulations as it may deem necessary or advisable for the administration of the Plan. The Committee shall have discretionary authority to construe and interpret the Plan and to determine the rights, if any, of Participants and Beneficiaries under the Plan. The Committee’s resolution of any matter concerning the Plan shall be final and binding upon any Participant and Beneficiary affected thereby. Members of the Committee shall be eligible to participate in the Plan while serving as members of the Committee, but a member of the Committee shall not vote or act upon any matter which relates solely to such member’s interest in the Plan as a Participant.

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ARTICLE 4. PARTICIPATION

Section 4.1. Election to Participate. Annually, all Eligible Employees will be offered the opportunity to defer Base Salary and/or Bonus Compensation payable for services performed in the following Plan Year. Any Eligible Employee may enroll in the Plan effective as of the first day of a Plan Year by filing a completed and fully executed Enrollment Agreement with the Committee prior to the beginning of such Plan Year. Pursuant to said Enrollment Agreement, the Eligible Employee shall elect (a) the percentage, in a whole percentage up to 80%, of Base Salary and/or up to 100% of Bonus Compensation (in each case after required payroll tax deductions and prior to deferral hereunder) which may be taken from subsequent payments of Base Salary and/or Bonus Compensation payable for services performed during the Plan Year and deferred hereunder; and (b) the Distribution Option Accounts to which such amounts will be credited. In addition, the Eligible Employee shall (x) designate the time and form in which the Participant’s deferrals under the Plan, together with any Matching Contributions made for such Plan Year and all notional earnings on such combined deferrals, shall be distributed; and (y) shall provide such other information as the Committee shall require. The Committee may, but is not required to, permit separate deferral elections with respect to Base Salary up to the Social Security Wage Base (as described in 42 U.S.C. § 415(e)) for the year; Base Salary between the Social Security Wage Base and that calendar year’s Code section 401(a)(17) limit; and Base Salary in excess of that calendar year’s Code section 401(a)(17) limit. Notwithstanding anything in this Plan to the contrary, any election by a Participant to defer Base Salary or Bonus Compensation for any Plan Year by less than 2%, or such other amount as the Committee may determine from time to time, shall not be given effect.

Section 4.2. Enrollment Agreements. Each Enrollment Agreement filed by an Eligible Employee must provide for the distribution of the Distribution Option Accounts selected by the Eligible Employee at a time and in a form consistent with the distribution options made available to Participants under the Plan and permitted under applicable law, including, without limitation, Code Section 409A. Except as expressly provided in Article 7 herein, an Eligible Employee’s election as to the time and form of distribution of his Distribution Option Accounts is irrevocable.

Section 4.3. New Eligible Employees. The Committee may, in its discretion, permit Employees who first become Eligible Employees after the beginning of a Plan Year to enroll in the Plan for that Plan Year by filing a completed and fully executed Enrollment Agreement, in accordance with Section 4.1, provided that the Employee’s election to participate in the Plan is made no later than 30 days following the date the Employee becomes an Eligible Employee. Notwithstanding the foregoing, however, any election by an Eligible Employee, pursuant to this section, to defer Base Salary and/or Bonus Compensation shall apply only to such amounts as are earned for services performed by the Eligible Employee after the date on which such Enrollment Agreement is filed. This Section 4.3 shall also apply to any Employee who first becomes an Eligible Employee after the beginning of a Plan Year as a result of a promotion.

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Section 4.4. Matching Contributions. An Eligible Employee who elects to participate in the Plan pursuant to Section 4.1 and/or Section 4.3 shall be eligible to receive Matching Contributions from the Company. The amount of such Matching Contributions for a Plan Year shall be (i) 100% of the amount deferred under this Plan, but not to exceed 3% of the excess of the Participant’s Base Salary for the Plan Year plus Bonus Compensation paid during the Plan Year over $170,000 (or such other amount specified in Internal Revenue Code Section 401(a)(17)); plus (ii) 50% of additional deferrals not to exceed an additional 2% of the excess of the Participant’s Base Salary for the Plan Year plus Bonus Compensation paid during the Plan Year over $170,000 (or such other amount specified in 401(a)(17); plus (iii) 4% of the amount deferred under this Plan to the extent that such deferral reduces the Participant’s considered compensation for purposes of the Qualified Plan; but (iv) during the period, if any, in which the Participant is not eligible for the Company’s 401(k) plan, Matching Contributions of the Company will be 100% of the Eligible Employee’s deferral under this Plan, not to exceed 3% of his Compensation for the Period plus 50% of additional deferrals for the period not to exceed an additional 2% of his Compensation for that period.

Notwithstanding the foregoing, Matching Contributions will only be made if the Company has sufficient current operating or accumulated net income to permit such contributions. Matching Contributions will be credited to the Distribution Option Account of the Participant to which the matched Base Salary or Bonus Compensation deferrals are credited. Matching Contributions will be credited as frequently as determined by the Committee but in any event at least once per year. Matching Contributions will be credited as soon as practicable in the Participant’s final year of participation in the Plan.

Section 4.5. Vesting. All contributions to the Plan, whether Base Salary Deferrals, Bonus Compensation Deferrals or Matching Contributions, as well as all earnings thereon, will always be immediately 100% vested, and not subject to forfeiture for any reason. (Negative earnings is not considered a forfeiture.)

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ARTICLE 5. DISTRIBUTION OPTION ACCOUNTS

Section 5.1. Distribution Option Accounts. The Committee shall establish and maintain one or more Distribution Option Accounts with respect to each Participant. For Plan Years beginning on or after January 1, 2007, a Participant’s Distribution Option Accounts shall consist of a Retirement Distribution Account and/or up to five (5) separate Flexible Distribution Accounts, and may also include one or more In-Service Distribution Accounts, if the Participant selected the In-Service Distribution Option in Plan Years ending on or before December 31, 2006, and if any benefits payable under the In-Service Distribution Accounts related to that selection have not yet been distributed to the Participant. The Company shall credit a Participant’s Distribution Option Accounts with the amount of Base Salary and/or Bonus Compensation deferred by the Participant pursuant to Section 4.1 or Section 4.3 in accordance with the Distribution Options irrevocably elected by the Participant in the Enrollment Agreement, and as soon as reasonably practicable following the close of the applicable payroll period or bonus payment date of such Base Salary and/or Bonus Compensation. The Company shall in no case credit a Participant’s Distribution Option Accounts for such deferred amounts later than the first day of the month next following the month in which the Base Salary and/or Bonus Compensation would have otherwise been paid. Any amount once taken into account as Base Salary and/or Bonus Compensation for purposes of this Plan shall not be taken into account thereafter. Matching Contributions, to the extent available to a Participant, shall be credited to the Participant’s Distribution Option Accounts in the same proportion as the deferred Base Salary and/or Bonus Compensation they match. The Participant’s Distribution Option Accounts shall be reduced by the amount of payments made by the Company to the Participant or the Participant’s Beneficiary pursuant to this Plan.

Section 5.2. Earnings on Distribution Option Accounts. A Participant’s Distribution Option Accounts shall be credited with earnings in accordance with the Earnings Crediting Options elected by the Participant from time to time. Participants may allocate each of their Retirement Distribution Accounts, Flexible Distribution Accounts and/or In-Service Distribution Accounts among the Earnings Crediting Options available under the Plan in any whole percentage. The rate of return, positive or negative, credited to each Earnings Crediting Option is based upon the actual investment performance of the investment funds underlying each Earnings Crediting Option, and shall equal the total return of such Earnings Crediting Option net of asset based charges, including, without limitation, money management fees, fund expenses and mortality and expense risk insurance contract charges. The Company reserves the right, on a prospective basis, to add or delete Earnings Crediting Options.

Section 5.3. No Actual Investment Required. Notwithstanding that the rates of return credited to Participants’ Distribution Option Accounts under the Earnings Crediting Options are based upon the actual performance of the investment funds underlying such Earnings Crediting Options, the Company shall not be obligated to invest any Base Salary and/or Bonus Compensation deferred by Participants under this Plan, Matching Contributions, or any other amounts, in the investment funds underlying such Earnings Crediting Options.

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Section 5.4. Changes in Earnings Crediting Options. A Participant may change the Earnings Crediting Options to which his Distribution Option Accounts are allocated not more frequently than four (4) times per Plan Year. Each such change may include (a) reallocation of the Participant’s existing Accounts in any whole percentage, and/or (b) change in investment allocation of amounts to be credited to the Participant’s Accounts in the future, as the Participant may elect. Notwithstanding the foregoing, however, in the event the Company deletes an Earnings Crediting Option, a Participant whose Accounts are allocated to such Earnings Crediting Option, in whole or in part, shall be entitled to reallocate his Distribution Option Accounts and/or any amounts to be credited in the future to such Distribution Option Accounts among the remaining Earnings Crediting Options, at the time of such deletion, without regard to the annual limit of four (4) such changes described above.

Section 5.5. Valuation of Accounts. The value of a Participant’s Distribution Option Accounts as of any particular valuation date shall equal the amounts previously credited to such Accounts, including any earnings (positive or negative) deemed to be earned on such accounts in accordance with Section 5.2 through the day preceding such valuation date, less the amounts previously deducted from such Accounts.

Section 5.6. Statement of Accounts. The Committee shall provide to each Participant, not less frequently than quarterly, a statement, in such form as the Committee deems desirable, setting forth the Participant’s balance in each of his Distribution Option Accounts.

Section 5.7. Distributions from Accounts. Any distribution made to or on behalf of a Participant from one or more of his Distribution Option Accounts in an amount which is less than the entire balance of such Account shall be made pro rata from each of the Earnings Crediting Options to which such Account is then allocated.

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ARTICLE 6. DISTRIBUTION OPTIONS

Section 6.1. Election of Distribution Option. In the Enrollment Agreement filed with the Committee prior to the beginning of each Plan Year or Distribution Option Period, an Eligible Employee shall irrevocably allocate his deferrals and Matching Contributions between the Retirement Distribution Option and the Flexible Distribution Option in increments of ten (10) percent; provided, however that an Eligible Employee may allocate 100 percent of his deferrals and Matching Contributions to one or the other of the two Distribution Options.

Section 6.2. Retirement Distribution Option. Subject to Section 7.1, distribution of the Participant’s Retirement Distribution Account for any Distribution Option Period or Plan Year shall commence upon (a) the Participant’s Retirement, or (b) if later, the Participant’s attainment of age 65, as elected by the Participant in the Enrollment Agreement pursuant to which such Retirement Distribution Account was established. Once a Retirement Distribution Option election is made, it may be modified by filing a subsequent written election, but any modification will be effective only:

(a) if it has been on file for at least twelve (12) months prior to the January 1 of the calendar year in which the original initial payment was to have been made; and

(b) it does not permit the acceleration of the time or schedule of any payment under the Plan; and

(c) except in the case of payments contingent upon death, being Disabled or due to an Unforeseeable Financial Emergency (as described in Section 10.1), the first payment with respect to which the subsequent election is made must be made at least five (5) years later than the date such first payment would otherwise have been made under the Participant’s original Retirement Distribution Option election.

Section 6.3. Flexible Distribution Option. Subject to Section 7.2, the Participant’s Flexible Distribution Account for any Plan Year shall be distributed commencing in the year elected by the Participant in the Enrollment Agreement pursuant to which such Flexible Distribution Account was established. Once a Flexible Distribution Option election is made, it may be modified by filing a subsequent written election, but any modification will be effective only:

(a) if it has been on file for at least twelve (12) months prior to the January 1 of the calendar year in which the original initial payment was to have been made; and

(b) it does not permit the acceleration of the time or schedule of any payment under the Plan; and

(c) except in the case of payments contingent upon death, being Disabled or due to an Unforeseeable Financial Emergency (as described in Section 10.1), the first payment

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with respect to which the subsequent election is made must be made at least five (5) years later than the date such first payment would otherwise have been made under the Participant’s original Flexible Distribution Option election.

Section 6.4. In-Service Distribution Option. Subject to Section 7.3, if a Participant elected to make deferrals under the In-Service Distribution Option with respect to a Distribution Option Period commencing on or before December 31, 2006, the Participant’s In-Service Distribution Account for such Distribution Option Period shall be distributed commencing in the year elected by the Participant in the Enrollment Agreement pursuant to which such In-Service Distribution Account was established. Once an In-Service Distribution Option election is made, it may be modified by filing a subsequent written election, but any modification will be effective only:

(a) if it has been on file for at least twelve (12) months prior to the January 1 of the calendar year in which the original initial payment was to have been made; and

(b) it does not permit the acceleration of the time or schedule of any payment under the Plan; and

(c) except in the case of payments contingent upon death, being Disabled or due to an Unforeseeable Financial Emergency (as described in Section 10.1), the first payment with respect to which the subsequent election is made must be made at least five (5) years later than the date such first payment would otherwise have been made under the Participant’s original In-Service Distribution Option election.

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ARTICLE 7. BENEFITS TO PARTICIPANTS

Section 7.1. Benefits Under the Retirement Distribution Option. Benefits under the Retirement Distribution Option shall be paid to a Participant as follows:

(a) Benefits Upon Retirement. In the case of a Participant who incurs a Separation from Service with the Company on account of his Retirement, the Participant’s Retirement Distribution Account with respect to any Distribution Option Period or Plan Year shall be distributed (i) in a lump sum, or (ii) in five (5), ten (10), or fifteen (15) annual installments, or any other mathematically derived formula acceptable to the Committee as elected by the Participant in the Enrollment Agreement pursuant to which such Retirement Distribution Account was established. Any lump-sum benefit payable in accordance with this paragraph shall be paid not later than January 31 of the Plan Year following the Plan Year in which occurs the Participant’s Retirement or, if later, the Participant’s attainment of age 65, as elected by the Participant in accordance with Section 6.2, in an amount equal to the value of such Retirement Distribution Account as of the last business day of the Plan Year preceding the date of payment. Annual installment payments, if any, shall commence not later than January 31 of the Plan Year following the Plan Year in which occurs the Participant’s Retirement or, if later, the Participant’s attainment of age 65, as elected by the Participant in accordance with Section 6.2, in an amount equal to (i) the value of such Retirement Distribution Account as of the last business day of the Plan Year preceding the date of payment, divided by (ii) the number of annual installment payments irrevocably elected by the Participant in the Enrollment Agreement pursuant to which such Retirement distribution Account was established. The remaining annual installments shall be paid not later than January 31 of each succeeding year in an amount equal to (i) the value of such Retirement Distribution Account as of the last business day of the immediately preceding Plan Year divided by (ii) the number of installments remaining. Unless otherwise elected in accordance with Section 6.2, the default form of payment of a Participant’s Retirement Distribution Account shall be a lump sum.

(b) Benefits Upon Separation From Service. In the case of a Participant who Separates from Service with the Company prior to the earliest date on which he is eligible for Retirement, for reasons other than his becoming Disabled or his death, such Participant’s Retirement Distribution Account with respect to any Distribution Option Period or Plan Year shall be distributed in a lump sum within 90 days following the Participant’s End Termination Date or attainment of age 65; or in 5, 10 or 15 year installments, or any other mathematically derived formula acceptable to the Committee, as elected by the Participant in accordance with Section 6.2, such installments commencing not later than January 31 of the Plan Year following the Plan Year in which occurs such Separation from Service.

Section 7.2. Benefits Under the Flexible Distribution Option. Benefits under the Flexible Distribution Option shall be paid to a Participant as follows:

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(a) Flexible Distributions. In the case of a Participant who continues in Service of the Company, the Participant’s Flexible Distribution Account shall be paid or commence to be paid to the Participant by January 31 of the Plan Year following the payment date elected by the Participant in the Enrollment Agreement pursuant to which such Flexible Distribution Account was established (which payment date may be no earlier than two (2) years after the date such Flexible Distribution Account was established), in a lump sum or in up to fifteen (15) annual installments, as elected by the Participant in accordance with Section 6.3. Any lump-sum benefit payable in accordance with this paragraph shall be paid not later than January 31 of the year elected by the Participant in accordance with Section 6.3, in an amount equal to the value of such Flexible Distribution Account as of the last business day of the Plan Year preceding the date of payment. Annual installment payments, if any, shall commence not later than January 31 of the Plan Year elected by the Participant in accordance with Section 6.3, in an amount equal to (i) the value of such Flexible Distribution Account as of the last business day of the Plan Year preceding the date of payment, divided by (ii) the number of annual installment payments elected by the Participant in the Enrollment Agreement pursuant to which such Flexible Distribution Account was established. The remaining annual installments shall be paid not later than January 31 of each succeeding year in an amount equal to (i) the value of such Flexible Distribution Account as of the last business day of the immediately preceding Plan Year divided by (ii) the number of installments remaining. Unless otherwise elected in accordance with Section 6.3, the default form of payment of a Participant’s Flexible Distribution Account shall be a lump sum.

(b) Benefits Upon Separation From Service. In the case of a Participant who Separates from Service with the Company prior to the date on which the Participant’s Flexible Distribution Account with respect to any Distribution Option Period would otherwise be distributed, for reasons other than his becoming Disabled or his death, such Participant’s Flexible Distribution Account shall be distributed either (i) in a lump sum within 90 days following the Participant’s End Termination Date; (ii) in annual installments commencing on the date such Flexible Distribution Account would otherwise have been distributed; or (iii) in a lump sum payable on the date that is thirteen (13) months following the Participant’s End Termination Date, as elected by the Participant in accordance with Section 6.3.

Section 7.3. Benefits Under the In-Service Distribution Option. Benefits under the In-Service Distribution Option shall be paid to a Participant as follows:

(a) In-Service Distributions. In the case of a Participant who continues in Service with the Company, the Participant’s In-Service Distribution Account for any Distribution Option Period shall be paid to the Participant commencing no later than January 31 of the year elected by the Participant in the Enrollment Agreement pursuant to which such In-Service Distribution Account was established, in one lump sum or in annual installments payable over 2, 3, 4, or 5 years. Any lump-sum benefit payable in accordance with this paragraph shall be paid not later than January 31 of the year elected by the Participant in accordance with Section 6.4, in an amount equal to the value of such In-Service Distribution Account as of the last business day of the Plan Year preceding the date of payment. Annual installment payments, if any, shall commence not later than January 31 of the Plan Year

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elected by the Participant in accordance with Section 6.4, in an amount equal to (i) the value of such In-Service Distribution Account as of the last business day of the Plan Year preceding the date of payment, divided by (ii) the number of annual installment payments elected by the Participant in the Enrollment Agreement pursuant to which such In-Service Distribution Account was established. The remaining annual installments shall be paid not later than January 31 of each succeeding year in an amount equal to (i) the value of such In-Service Distribution Account as of the last business day of the immediately preceding Plan Year divided by (ii) the number of installments remaining. Unless otherwise elected in accordance with Section 6.4, the default form of payment of a Participant’s In-Service Distribution Account shall be a lump sum.

(b) Benefits Upon Separation From Service. In the case of a Participant who Separates from Service with the Company prior to the date on which the Participant’s In-Service Distribution Account with respect to any Distribution Option Period would otherwise be distributed, for reasons other than his becoming Disabled or his death, such Participant’s In-Service Distribution Account shall be distributed either (i) in a lump sum within 90 days following the Participant’s End Termination Date; (ii) in annual installments commencing on the date such In-Service Distribution Account would otherwise have been distributed; or (iii) in a lump sum on the date such In-Service Distribution Account would otherwise have been distributed, as elected by the Participant in accordance with Section 6.4.

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ARTICLE 8. DISABILITY

In the event a Participant becomes Disabled, the Participant’s right to make any further deferrals under this Plan shall terminate as of the date which the Participant first receives benefits under the Company’s Long-Term Disability Benefit Plan, as amended from time to time. The Participant’s Distribution Option Accounts shall continue to be credited with earnings in accordance with Section 5.2 until such Accounts are fully distributed. For purposes of this Plan, a Disabled Participant will not be treated as having Separated from Service. The Participant’s Retirement Distribution Accounts, if any, shall be distributed to the Participant in accordance with Section 7.1(a), provided, however, that distribution of the Participant’s Retirement Distribution Accounts, if any, shall commence not later than January 31 of the Plan Year immediately following the later of (a) the Plan Year in which the Participant first becomes eligible for Retirement, or (b) the Plan Year in which the Participant first received benefits under the Company’s Long-Term Disability Plan, as amended from time to time. The Participant’s Flexible Distribution Accounts and In-Service Distribution Accounts, if any, will be distributed to the Participant in accordance with Section 7.2(a) and 7.3(a).

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ARTICLE 9. SURVIVOR BENEFITS

Section 9.1. Death of Participant Prior to the Commencement of Benefits. In the event of a Participant’s death prior to the commencement of benefits in accordance with Article 7, benefits shall be paid to the Participant’s Beneficiary, as determined under Section 11.4, pursuant to Section 9.2, 9.3 or 9.4, whichever is applicable, in lieu of any benefits otherwise payable under the Plan to or on behalf of such Participant.

Section 9.2. Survivor Benefits Under the Retirement Distribution Option. In the case of a Participant with respect to whom the Company has established one or more Retirement Distribution Accounts, and who dies prior to the commencement of benefits under such Retirement Distribution Accounts pursuant to Section 7.1, distribution of such Retirement Distribution Accounts shall be made (a) in a lump sum within 90 days following the Participant’s death, or (b) in 5, 10 or 15 year installments or any other mathematically derived formula acceptable to the Committee and beginning as elected by the Participant in accordance with section 6.2. The amount of any lump sum benefit payable in accordance with this Section shall equal the value of such Retirement Distribution Accounts as of the last business day of the calendar month immediately preceding the date on which such benefit is paid. The amount of any annual installment benefit payable in accordance with this Section shall equal (a) the value of such Retirement Distribution Accounts as of the last business day of the calendar month immediately preceding the date on which such installment is paid, divided by (b) the number of annual installments remaining to be paid pursuant to the irrevocable election of the Participant in the Enrollment Agreement pursuant to which such Retirement Distribution Accounts were established.

Section 9.3. Survivor Benefits Under the Flexible Distribution Option. In the case of a Participant with respect to whom the Company has established one or more Flexible Distribution Accounts, and who dies prior to the date on which such Flexible Distribution Accounts are to be paid pursuant to Section 7.2, distribution of such Flexible Distribution Accounts shall be made (a) in a lump sum within 90 days following the Participant’s death, or (b) at such time and in such form as such Flexible Distribution Accounts would otherwise have been distributed in accordance with Section 7.2 had the Participant lived, as irrevocably elected by the Participant in the Enrollment Agreement pursuant to which such Flexible Distribution Accounts were established. The amount of any lump sum benefit payable in accordance with this Section shall equal the value of such Flexible Distribution Accounts as of the last business day of the calendar month immediately preceding the date on which such benefit is paid.

Section 9.4. Survivor Benefits Under the In-Service Distribution Option. In the case of a Participant with respect to whom the Company has established one or more In-Service Distribution Accounts, and who dies prior to the date on which such In-Service Distribution Accounts are to be paid pursuant to Section 7.3, distribution of such In-Service Distribution Accounts shall be made (a) in a lump sum within 90 days following the Participant’s death, or (b) at such time and in such form as such In-Service Distribution Accounts would otherwise have been distributed in accordance with Section 7.3 had the

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Participant lived, as irrevocably elected by the Participant in the Enrollment Agreement pursuant to which such In-Service Distribution Accounts were established. The amount of any lump sum benefit payable in accordance with this Section shall equal the value of such In-Service Distribution Accounts as of the last business day of the calendar month immediately preceding the date on which such benefit is paid.

Section 9.5. Death of Participant After Benefits Have Commenced. In the event a Participant who elected to make deferrals under any of the Distribution Options offered by the Plan dies after annual installment benefits payable under Article 7 from one or more of the Participant’s Distribution Option Accounts have commenced, but before the entire balance of such Distribution Option Accounts has been paid, any remaining installments shall continue to be paid to the Participant’s Beneficiary, as determined under Section 11.4, at such times and in such amounts as they would have been paid to the Participant had he survived.

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ARTICLE 10. EARLY DISTRIBUTIONS

Section 10.1. Acceleration of Payment Under the Plan.

(a) Separation From Service. The Distribution Account(s) of a Participant who Separates from Service with the Company shall be distributed as elected by the Participant in accordance with Article 6; provided, however, that the Distribution Account(s) of Participants who are Key Employees shall not be distributed prior to six (6) months from the date of the Participant’s Separation from Service, as determined by the Committee in its sole discretion. Prior to distribution of the Participant’s Distribution Account(s), such Account(s) shall continue to be credited with earnings and/or losses in accordance with Section 5.2 until fully distributed.

(b) Disability or Death. In the case of a Participant who becomes Disabled or dies, the Participant’s Distribution Account(s) shall be distributed as elected by the Participant in accordance with Article 6. Prior to distribution, such Participant’s Distribution Account(s) shall continue to be credited with earnings and/or losses in accordance with Section 5.2 until fully distributed.

(c) Unforeseeable Financial Emergency. In the event that the Committee, upon written request of a Participant, determines, in its sole discretion, that the Participant has suffered an Unforeseeable Financial Emergency, the Company shall pay to the Participant from his or her Distribution Account(s), as soon as practicable following such determination, an amount necessary to meet such Unforeseeable Financial Emergency, in a manner consistent with Code Section 409A and the regulations and Internal Revenue Service guidance issued thereunder, after deduction of any and all taxes as may be required pursuant to Section 11.10 (the “Emergency Benefit”). For purposes of this Plan, an “Unforeseeable Financial Emergency” is a severe financial hardship to the Participant arising from an illness or accident of the Participant, the Participant’s spouse or the Participant’s dependent (within the meaning of Code section 152(a)), or the loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of circumstances beyond the control of the Participant. Cash needs arising from foreseeable events such as the purchase of a house or education expenses for children shall not be considered to be the result of an Unforeseeable Financial Emergency. The amount necessary to relieve the Unforeseeable Financial Emergency is determined after taking into account any reimbursement or compensation by insurance or otherwise and by liquidation of the Participant’s assets to the extent that the liquidation of assets would not itself cause financial hardship. Emergency Benefits shall be paid first from the Participant’s Flexible Distribution Account(s), if any, to the extent the balance of one or more of such Flexible Distribution Accounts is sufficient to meet the Unforeseeable Emergency, in the order of which such Accounts would otherwise be distributed to the Participant. If the distribution exhausts the Participant’s Flexible Distribution Account(s), the Participant’s In-Service Distribution Account(s), if any, may next be accessed in a similar manner to pay for Emergency Benefits. Finally, if both the Participant’s Flexible Distribution Account(s) and In-Service Distribution Account(s), if any, are exhausted in paying

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Emergency Benefits to the Participant, the Participant’s Retirement Distribution Account may be accessed to pay for such benefits. With respect to that portion of any Distribution Option Account which is distributed to a Participant as an Emergency Benefit, in accordance with this Article 10, no further benefit shall be payable to the Participant under this Plan. Notwithstanding anything in this Plan to the contrary, a Participant who receives an Emergency Benefit in any Plan Year shall not be entitled to make any further deferrals for the remainder of such Plan Year.

(d) Change of Control. To the extent permitted by the regulations and other Internal Revenue Service guidance issued under Code Section 409A, within the thirty (30) days preceding or the twelve (12) months following a “Change of Control” (as defined by Code Section 409A), the Company may exercise its authority to terminate this Plan and, notwithstanding any other provision of the Plan or the terms of any Enrollment Agreement to the contrary, distribute to or with respect to each Participant his entire Distribution Account.

(e) Other Acceleration Events. To the extent permitted by Code Section 409A and the regulations and Internal Revenue Service guidance issued thereunder, and notwithstanding the terms of an Enrollment Agreement, distribution of all or a part of a Participant’s Distribution Account(s) may be made:

(1) to the extent necessary to fulfill a domestic relations order (as defined in Code Section 414(p)(1)(B)); or

(2) to the extent necessary to pay the amount included in income by the Participant as a result of the Plan failing to meet the requirements of Code Section 409A and the regulations issued thereunder.

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ARTICLE 11. MISCELLANEOUS

Section 11.1. Amendment. The Company, or any other entity authorized by the Company, may amend this Plan at any time, provided that no such amendment shall accelerate, reduce or in any manner adversely affect the rights of any Participant with respect to benefits that are payable or may become payable under the Plan based upon the balance of the Participant’s Distribution Option Accounts as of the effective date of such amendment.

Section 11.2. Termination. The Company, or any other entity authorized by the Company, may at any time terminate this Plan when, in the sole opinion of the Company or such authorized entity, termination is advisable, in accordance with and subject to the following rules:

(a) The Company or such authorized entity may at any time irrevocably terminate the Plan and require that all benefits accrued under the Plan be distributed to Participants or their Beneficiaries, as applicable, in a single lump sum. The amount of any lump sum benefit payable in accordance with this Section shall equal the value of the Participant’s Distribution Accounts as determined within thirty (30) days of the Plan’s termination date, without regard to a Participant’s prior Enrollment Agreement elections, if (1) the Plan’s termination does not occur proximate to a downturn in the Company’s financial health; (2) the Company terminates and liquidates all arrangements it sponsors that would be aggregated with any terminated and liquidated arrangements under regulations issued under Code Section 409A if Participants in this Plan also had deferrals of compensation under those arrangements; (3) no payments in liquidation of the Plan are made within twelve (12) months of the date on which the Company takes all necessary corporate action to irrevocably terminate and liquidate the Plan, other than those payments that would payable under the pre-existing terms of the Plan; (4) all payments are completed within 24 months of the date of the Company’s irrevocable corporate action to terminate and liquidate the Plan; and (5) the Company does not, for the three (3) years following the date of its irrevocable corporate action to terminate and liquidate the Plan, adopt a new arrangement covering those Participants that would be aggregated with any terminated and liquidated arrangements under regulations issued under Code Section 409A.

(b) The Plan shall terminate and all benefits accrued thereunder will be distributed to Participants or their Beneficiaries, as applicable, in a lump sum benefit equal to the value of the Participant’s Distribution Accounts as determined within thirty (30) days of the Plan’s termination date without regard to a Participant’s prior Enrollment Agreement elections, if (1) payment is made upon a complete dissolution that is taxed under Code Section 331 or upon approval of a bankruptcy court pursuant to Section 503(b)(1)(A) of Title 11 of the United States Code, and (2) the amounts deferred under the Plan are included in the gross income of Participants and their Beneficiaries by the latest of (i) the calendar year in which the Plan termination occurs, (ii) the calendar year in which the amounts are no longer subject to a substantial risk of forfeiture, or (iii) the first calendar year in which the payment is administratively practicable.

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(c) Except as provided in this Section 11.2, above or as otherwise permitted in regulations issued under Code Section 409A, any action that purports to terminate the Plan shall instead be construed as an amendment to discontinue further Base Salary and Bonus Compensation Deferrals, but the Plan will continue to operate, in accordance with its terms as from time to time amended and in accordance with the applicable Participant Distribution Options, with respect to the Participant’s Distribution Option Accounts through the date of termination, and in no event shall any such action purporting to terminate the Plan form the basis for accelerating distributions to Participants and their Beneficiaries.

(d) Termination of the Plan as described above shall not adversely affect a Participant’s Distribution Option Accounts without the Participant’s prior written consent.

Section 11.3. Claims Procedure.

a. Claim

A person who believes that he is being denied payment of a benefit to which he is entitled under the Plan (hereinafter referred to as a “Claimant”) may file a written request for such benefit with the Benefits Department of the Company, setting forth his claim within 90 days of the latest date upon which such payment could have been timely made in accordance with the terms of the Plan or regulations issued under Code Section 409A.

b. Claim Decision

Upon receipt of a claim, the Benefits Department of the Company shall advise the Claimant that a reply will be forthcoming, and within 135 days of the latest date upon which such payment could have been timely made in accordance with the terms of the Plan or regulations issued under Code Section 409A, shall deliver such reply to the Claimant.

If the claim is denied in whole or in part, the Claimant shall be provided a written opinion, using language calculated to be understood by the Claimant, setting forth:

(a) The specific reason or reasons for such denial

(b) The specific reference to pertinent provisions of this Agreement on which such denial is based;

(c) A description of any additional material or information necessary for the Claimant to perfect his claim and an explanation why such material or such information is necessary;

(d) Appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; and

(e) The time limits for requesting a review under subsection (c) and for review under subsection (d) hereof.

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If the Benefits Department of the Company fails to furnish the Claimant with such written notice within the 135-day period specified above, the Claimant’s claim shall be deemed to be denied.

c. Request for Review

Within 180 days of the latest date upon which such payment could have been timely made in accordance with the terms of the Plan or regulations issued under Code Section 409A, the Claimant may request in writing that the Committee review the determination of the Company. The Claimant or his duly authorized representative may, but need not, review the pertinent documents and submit issues and comment in writing for consideration by the Committee. If the Claimant does not request a review of the initial determination within such period, he shall be barred and estopped from challenging the Committee’s determination.

d. Review of Decision

Within sixty (60) days after the Committee’s receipt of a request for review, it will review the initial determination. After considering all materials presented by the Claimant, the Committee will render a written opinion, written in a manner calculated to be understood by the Claimant, setting forth the specific reasons for the decision and containing specific references to the pertinent provisions of this Agreement on which the decision is based. If special circumstances require that the sixty (60) day time period be extended, the Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days after receipt of the request for review.

Section 11.4. Designation of Beneficiary. Each Participant may designate a Beneficiary or Beneficiaries (which Beneficiary may be an entity other than a natural person) to receive any payments which may be made following the Participant’s death. Such designation may be changed or canceled at any time without the consent of any such Beneficiary. Any such designation, change or cancellation must be made in a form approved by the Committee and shall not be effective until received by the Committee, or its designee. If no Beneficiary has been named, or the designated Beneficiary or Beneficiaries shall have predeceased the Participant, the Beneficiary shall be the Participant’s estate. If a Participant designates more than one Beneficiary, the interests of such Beneficiaries shall be paid in equal shares, unless the Participant has specifically designated otherwise.

Section 11.5. Limitation of Participant’s Right. Nothing in this Plan shall be construed as conferring upon any Participant any right to continue in the employment of the Company, nor shall it interfere with the rights of the Company to terminate the employment of any Participant and/or to take any personnel action affecting any Participant without regard to the effect which such action may have upon such Participant as a recipient or prospective recipient of benefits under the Plan.

Section 11.6. No Limitation on Company Actions. Nothing contained in the Plan shall be construed to prevent the Company from taking any action which is deemed by it to be appropriate or in its best interest. No Participant, Beneficiary, or other person shall have any claim against the Company as a result of such action.

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Section 11.7. Obligations to Company. If a Participant becomes entitled to a distribution of benefits under the Plan, and if at such time the Participant has outstanding any debt, obligation, or other liability representing an amount owing to the Company, then the Company may offset such amount owed to it against the amount of benefits otherwise distributable. Such determination shall be made by the Committee.

Section 11.8. Nonalienation of Benefits. Except as expressly provided herein, no Participant or Beneficiary shall have the power or right to transfer (otherwise than by will or the laws of descent and distribution), alienate, or otherwise encumber the Participant’s interest under the Plan. The Company’s obligations under this Plan are not assignable or transferable except to (a) any corporation or partnership which acquires all or substantially all of the Company’s assets or (b) any corporation or partnership into which the Company may be merged or consolidated. The provisions of the Plan shall inure to the benefit of each Participant and the Participant’s Beneficiaries, heirs, executors, administrators or successors in interest.

Section 11.9. Protective Provisions. Each Participant shall cooperate with the Company by furnishing any and all information requested by the Company in order to facilitate the payment of benefits hereunder, taking such physical examinations as the Company may deem necessary and taking such other relevant action as may be requested by the Company. If a Participant refuses to cooperate, the Company shall have no further obligation to the Participant under the Plan, other than payment to such Participant of the then current balance of the Participant’s Distribution Option Accounts in accordance with his prior elections.

Section 11.10. Withholding Taxes. The Company may make such provisions and take such action as it may deem necessary or appropriate for the withholding of any taxes which the Company is required by any law or regulation of any governmental authority, whether Federal, state or local, to withhold in connection with any benefits under the Plan, including, but not limited to, the withholding of appropriate sums from any amount otherwise payable to the Participant (or his Beneficiary). Each Participant, however, shall be responsible for the payment of all individual tax liabilities relating to any such benefits.

Section 11.11. Unfunded Status of Plan. The Plan is intended to constitute an “unfunded” plan of deferred compensation for Participants. Benefits payable hereunder shall be payable out of the general assets of the Company, and no segregation of any assets whatsoever for such benefits shall be made. Notwithstanding any segregation of assets or transfer to a grantor trust, with respect to any payments not yet made to a Participant, nothing contained herein shall give any such Participant any rights to assets that are greater than those of a general creditor of the Company.

Section 11.12. Lump Sum Cash-Out. Upon a Participant’s Separation from Service, if the actuarial equivalent value of a Participant’s Distribution Accounts hereunder is

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equal to or less than the limit imposed by Code Section 402(g) for the calendar year in which the Participant’s Separation from Service occurs, the Committee may, in its sole discretion and without regard to any request filed by the Participant, direct that the balance of the Participant’s Distribution Accounts be paid to the Participant.

Section 11.13. Severability. If any provision of this Plan is held unenforceable, the remainder of the Plan shall continue in full force and effect without regard to such unenforceable provision and shall be applied as though the unenforceable provision were not contained in the Plan.

Section 11.14. Governing Law. The Plan shall be construed in accordance with and governed by the laws of the State of Florida, without reference to the principles of conflict of laws.

Section 11.15. Headings. Headings are inserted in this Plan for convenience of reference only and are to be ignored in the construction of the provisions of the Plan.

Section 11.16. Gender. Singular and Plural. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may read as the plural and the plural as the singular.

Section 11.17. Notice. Any notice or filing required or permitted to be given to the Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the Benefits Department, or to such other entity as the Committee may designate from time to time. Such notice shall be deemed given as to the date of delivery, or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or Certification.

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ARTICLE 12. SIGNATURE

This Amended and Restated Plan is hereby adopted and approved, to be effective as of the 1st day of January, 2007.

UNIVERSAL CITY DEVELOPMENT PARTNERS Ltd.
By:	John R. Sprouls
Its:	Chief Executive Officer

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EX-12.1

Exhibit 12.1

Universal City Development Partners, Ltd. and Subsidiaries

Computation of Ratio of Earnings to Fixed Charges

	Fiscal year ended December 31,
	2006			2006			2005
Earnings
Net income	$	91,888		$	41,960		$	35,268
(Income) loss from joint ventures		(1,724	)		711			178
Fixed charges		110,435			111,362			107,712
Amortization of capitalized interest		6,929			6,799			6,759
Distributions from joint ventures		3,681			164			529
Capitalized interest		(1,848	)		(817	)		(244	)
Earnings before fixed charges	$	209,361		$	160,179		$	150,202
Fixed Charges
Net interest expense	$	107,906		$	109,733		$	106,701
Capitalized interest		1,848			817			244
Interest implicit in rentals		681			812			767
Total fixed charges	$	110,435		$	111,362		$	107,712
Ratio of earnings to fixed charges		1.9			1.4			1.4

EX-14.1

Exhibit 14.1

CODE OF CONDUCT December 2003

POLICY:	Universal Orlando (the “Company”) values its reputation for honesty and integrity and, accordingly, directs all its employees to adhere to the highest moral, legal and ethical standards in the conduct of their business. The Company’s employees, officers and directors (“Employees”) are not permitted to achieve results by unethical or illegal methods, including knowingly engaging in otherwise prohibited activities through third parties such as the employee’s family members or other organizations.
	The standards set forth in this Code of Conduct (“Code”) are designed to promote compliance with applicable governmental laws, rules and regulations, as well as adherence to the highest ethical principles. This Code sets out a set of basic principles and guidelines to guide Employees regarding the minimum requirements expected of them: however, this Code does not provide a detailed description of all Employee policies. This Code supplements our existing Employee handbooks and policies.
	It is the responsibility of all persons at the Company to maintain a work environment that fosters fairness, respect and integrity; and it is our Company policy to be lawful, highly principled and socially responsible in all our business practices. All Employees are expected to become familiar with this Code and to apply it in the daily performance of her job responsibilities. All Employees of the Company are responsible for complying with this Code.
	All Employees are expected to seek the advice of their supervisor, manager or other appropriate persons within the Company when questions arise about the issues discussed in this Code and any other issues that may implicate the ethical standards or integrity of the Company or any of its Employees. Compliance procedures are set forth below under “Compliance.”
PURPOSE:	To establish a consistent policy for conducting the Company’s business in a legal and ethical manner and preventing possible conflicts of interest or the appearance of conflicts of interest.
CONFLICTS OF INTEREST:	A “conflict of interest” exists when an Employee’s private interest interferes in any way with the interests of the Company.
	A conflict situation can arise when an employee takes action or has interests that may make it difficult to perform his or her Company work objectively or effectively. Conflicts of interest also arise when an Employee or a member of his or her family receives improper personal benefits (including personal loans, services or payment for services that the person is performing in the course of Company benefit) as a result of his or her positioning the Company, or gains personal enrichment through access to confidential information.

	Conflicts of interest can arise in many common situations, despite one’s best interest to avoid them. Employees are encouraged to seek clarification of, and to discuss questions about, potential conflicts of interest with the Company’s Executive Vice President, Human Resources. Any Employee who becomes aware of a conflict or potential conflict should bring it to the attention of a supervisor, manager or other appropriate person within the Company, in accordance with the procedures set below under “Compliance.”
DISCLOSURE	All financial statements and books, records and accounts of the Company must accurately reflect transactions and events and conform both to required legal requirements and accounting principles, and also to the Company’s system of internal accounting. Each Employee has the responsibility to ensure that false or intentionally misleading entries are not made by him or her, or anyone who reports to him or her, in the Company’s accounting records. Regardless of whether reporting is required by law, dishonest reporting by the Company or to organizations or people outside the Company, is strictly prohibited. All Employees that are responsible for financial or accounting matters are also required to ensure the full, fair, accurate, timely and understandable disclosure in all periodic reports filed with or submitted to the Security Exchange Commission by the Company or in other public communications made by the Company. Any Employee in possession of material information must take steps to ensure that it is disclosed to those responsible for the preparation of the Company’s periodic reports and other public disclosures. This commitment and responsibility extends to the highest levels of the Company’s organization, including its President, Chief Financial Officer and Controller.
GENERAL ADMINISTRATION:	The Administration Department is responsible for the administration of this policy and for receiving questions and notification of violations.
	1.      Prohibited Activities - Examples of activities prohibited by Universal Orlando include, but are not limited to, the following:
	A.     The appropriation or conversion of Company property or services to one’s own personal benefit.
	B.     The submission of fraudulent expense reports.
	C.     The receiving, offering, promising, soliciting, authorizing, or making of any commercial bribe or kickback.
	D.     Receiving or soliciting payment for confidential information.
	E.     The giving of Company political contributions without the prior authorization of the Universal Orlando office of Government Relations or Political Action Committee.
	F.      The unauthorized disclosure of confidential or proprietary information or the use or dissemination of such information

in a manner which may be detrimental to the Company’s interest.

G.     Concurrent employment at a competing Company without prior authorization from the Company’s Executive Vice President, Human Resources.

H.     Service as a director on the board of directors of any outside organization (other than charities, schools and service organizations), without the prior authorization of senior management (not applicable to the Company’s outside directors).

I.       The acquisition or disposition of any property or interests on the basis of confidential or proprietary information obtained through the Company or advising third parties to trade in related Company stocks or the stock of other companies on the basis of non-public information.

J.      The ownership interest in, or acting in any capacity for, any supplier, contractor or other enterprise with whom the Company does business.

K.     The influence of any decision on behalf of the Company regarding any vendor, contractor or other business when the Employee’s relatives own an interest in such an enterprise doing business with the Company.

L.     Ownership of an interest, other than as a minority shareholder in, or acting in any capacity for, any enterprise in competition with the Company.

M.    The appropriation to the Employee or diversion to others of any business opportunity in areas where the Company conducts a business or enterprise.

N.     Unauthorized use of the Company’s name as representation in any organization in which the Employee participates.

O.     Any activities that constitute a conflict of interest.

P.      Violating the Company’s sexual harassment policy.

Q.     Violating the Company’s policy regarding confidential information.

2.      Acceptance of Gifts

A.     Employees are prohibited from accepting gifts, items of entertainment or promotional items having more than nominal value from public officials or persons with whom the Company does business or is pursuing a business relationship, including vendors, without prior authorization from the Employee’s department head (but at least director level). Nominal value is defined as $150.

B.     Unsolicited gifts that are shared with an Employee’s department (such as holiday gift baskets) shall not result in a violation of this policy.

C.     Employee participation in closing dinners or other celebratory events hosted and paid for by a vendor, firm or other organization of which the Company is a client requires approval of senior management ( executive or Senior Vice President of the department or division).

3.      Compliance

A.     Each Employee has a duty to disclose any of his or her own activities which he or she feels raise, or to a reasonable person would raise, questions as to a possible violation of this Code. Such disclosure must be reported to the Employee’s immediate supervisor for review prior to the Employee engaging in the conduct in question. The supervisor will review the proposed activity with the appropriate senior level management, and, in turn, advise the Employee whether a violation exists.

B.     Each Employee also has the duty to immediately report a possible violation of this Code to his or her immediate supervisor or to the President, Chief Financial Officer or Executive Vice President, Human Resources.

1.      The supervisor has a responsibility to immediately inform the appropriate senior level management executives as to the allegations of possible Code violations.

2.      It is the responsibility of senior management to conduct a review of such matters and report its findings to its internal auditors.

4.      Violation - A violation of the Code may result in disciplinary action, up to an including termination of employment, the Company’s seeking legal action for any financial loss it may have suffered, and/or criminal prosecution.

5.      Waiver or Amendment - Any change or waiver of this Code for executive officers (including our Chief Executive Officer, Chief Financial Officer, Controller or Principle Accounting Officer) may be made only by the Park Advisory Board or a committee thereof and will be promptly disclosed as required by law or stock exchange regulation.

EX-14.2

Exhibit 14.2

Always with unyielding integrity

The Spirit & The Letter

CONTENTS

STATEMENT OF INTEGRITY	1
THE SPIRIT & THE LETTER:
GUIDING THE WAY WE DO BUSINESS	2
GE CODE OF CONDUCT	3
YOUR PERSONAL COMMITMENT	4
WHO MUST FOLLOW GE COMPLIANCE POLICIES	5
WHAT EMPLOYEES MUST DO	6
WHAT LEADERS MUST DO	7
RAISE YOUR VOICE:
YOUR OBLIGATION TO RAISE INTEGRITY CONCERNS	8
HOW TO RAISE AN INTEGRITY CONCERN	9
WHAT HAPPENS WHEN AN INTEGRITY CONCERN IS RAISED	10
PENALTIES FOR VIOLATIONS	11
BUSINESS POLICIES AND PROCEDURES	12
THE SPIRIT & THE LETTER POLICIES	13
WORKING WITH CUSTOMERS & SUPPLIER	14
Improper Payments	16
Supplier Relationships	18
International Trade Controls	22
Money Laundering Prevention	24
Privacy	26
GOVERNMENT BUSINESS	28
Working with Governments	30
COMPETING GLOBALLY	32
Complying with Competition Laws	34
IN THE GE COMMUNITY	36
Fair Employment Practices	38
Environment, Health & Safety	42
Security & Crisis Management	44
PROTECTING GE ASSETS	46
Intellectual Property	48
Controllership	50
Conflicts of Interest	54
Insider Trading & Stock Tipping	56
INDEX	58
APPENDIX: WHICH LAW APPLIES	59

This booklet is just an introduction to GE compliance policies. The full text of those policies and many other resources are located at integrity.ge.com.

Statement of integrity

For more than 125 years, GE has demonstrated an unwavering commitment to performance with integrity. At the same time we have expanded into new businesses and new regions and built a great record of sustained growth, we have built a worldwide reputation for lawful and ethical conduct.

This reputation has never been stronger. In several surveys of CEOs, GE has been named the world’s most respected and admired company. We have been ranked first for integrity and governance.

But none of that matters if each of us does not make the right decisions and take the right actions. At a time when many people are more cynical than ever about business, GE must seek to earn this high level of trust every day, employee by employee.

This is why I ask each person in the GE community to make a personal commitment to follow our Code of Conduct. This set of GE policies on key integrity issues guides us in upholding our ethical commitment. All GE employees must comply not only with the letter of these policies, but also their spirit.

If you have a question or concern about what is proper conduct for you or anyone else, promptly raise the issue with your manager, a GE ombudsperson or through one of the many other channels the Company makes available to you. Do not allow anything – not “making the numbers,” competitive instincts or even a direct order from a superior – to compromise your commitment to integrity.

GE leaders are also responsible not only for their own actions but for fostering a culture in which compliance with GE policy and applicable law is at the core of business-specific activities. Leaders must address employees’ concerns about appropriate conduct promptly and with care and respect.

There is no conflict between excellent financial performance and high standards of governance and compliance – in fact, the two are mutually reinforcing. As we focus on becoming the preeminent growth company of the 21st century, we must recognize that only one kind of performance will maintain our reputation, increase our customers’ confidence in us and our products and services, and enable us to continue to grow, and that is performance with integrity

Jeffrey R. Immelt

Chairman of the Board & Chief Executive Officer

June 2005

2   The Spirit & The Letter

The Spirit & The Letter:

Guiding the way we do business

Every day, everyone at GE has the power to influence our company’s reputation — everywhere we do business. The Spirit & The Letter helps to ensure that, after more than 125 years, we still conduct our affairs with unyielding integrity.

For well over a century, GE employees have worked hard to uphold the highest standards of ethical business conduct. We seek to go beyond simply obeying the law — we embrace the spirit of integrity.

GE’s Code of Conduct articulates that spirit by setting out general principles of conduct everywhere, every day and by every GE employee.

GE Code of Conduct

Obey the applicable laws and regulations governing our business conduct worldwide.

Be honest, fair and trustworthy in all your GE activities and relationships.

Avoid all conflicts of interest between work and personal affairs.

Foster an atmosphere in which fair employment practices extend to every member of the diverse GE community.

Strive to create a safe workplace and to protect the environment.

Through leadership at all levels, sustain a culture where ethical conduct is recognized, valued and exemplified by all employees.

4   The Spirit & The Letter

Your Personal Commitment

You will be asked to acknowledge your awareness that every GE employee must follow The Spirit & The Letter Policies and raise concerns about possible violations of law or policy with a GE manager, company legal counsel, GE auditor, GE ombudsperson or other GE compliance specialist.

For the complete text of policies, visit the GE integrity Web site: integrity.ge.com.

  5

Who must follow GE compliance policies

GE DIRECTORS, OFFICERS AND EMPLOYEES.

SUBSIDIARIES AND CONTROLLED AFFILIATES Entities in which GE owns more than 50 percent of the voting rights, or has the right to control the entity, are required to adopt and follow GE compliance policies.

NON-CONTROLLED AFFILIATES

Non-controlled affiliates should be encouraged to adopt and follow GE compliance policies.

THIRD PARTIES REPRESENTING GE

GE employees working with third parties, such as consultants, agents, sales representatives, distributors and independent contractors, must:

• require these parties to agree to comply with relevant aspects of GE’s compliance policies

• provide these parties with education and information about policy requirements

• take action, up to and including terminating a contract, after learning that a third party failed to abide by GE’s compliance policies.

6   The Spirit & The Letter

What employees must do

All employees can contribute to GE’s culture of compliance by understanding GE’s policies, embracing GE’s commitment to integrity and acting to enforce compliance and avoid violations.

Employee responsibilities are as follows:

UNDERSTAND GE POLICIES

• Gain a basic understanding of the policy requirements summarized in this booklet.

• Learn the details of policies relevant to your job.

• Check integrity.ge.com for the complete and up-to-date policies.

• Go to your manager, company legal counsel or other GE resources with any questions about the policies.

RAISE YOUR CONCERNS

• Promptly raise any concerns about potential violations of any GE policy.

• Understand the different channels for raising integrity concerns: ombudsperson, manager, GE lawyer, GE auditor or other compliance resource.

• If a concern you raise is not resolved, pursue the issue! Raise it through another of GE’s channels.

• Cooperate in GE investigations related to integrity concerns.

  7

What leaders must do

A leader must: create a culture of compliance in which employees understand their responsibilities and feel comfortable raising concerns without fear of retaliation; encourage ethical conduct and compliance with the law by personally leading compliance efforts; consider compliance efforts when evaluating and rewarding employees; and ensure that employees understand that business results are never more important than ethical conduct and compliance with GE policies.

Leaders must also take the following steps to build an infrastructure to prevent, detect and respond to compliance issues:

PREVENT COMPLIANCE ISSUES

• Identify business compliance risks.

• Ensure that processes, tailored to address your particular risk areas, are communicated and implemented.

• Provide education on GE policies and applicable law to employees and (where appropriate) board members and third parties.

• Commit adequate resources to your business’s compliance program.

DETECT COMPLIANCE ISSUES

• Implement control measures, such as “dashboards” and “scorecards,” to detect heightened compliance risks and/or violations.

• Promote an effective ombudsperson system.

• Ensure that periodic compliance reviews are conducted, with the assistance of business compliance leaders and/ or the Corporate Audit Staff.

RESPOND TO COMPLIANCE ISSUES

• Take prompt corrective action to fix identified compliance weaknesses.

• Take appropriate disciplinary action.

• Consult with GE legal counsel and make appropriate disclosures to regulators and law enforcement authorities.

8   The Spirit & The Letter

Raise Your Voice:

Your obligation to raise integrity concerns

Raising an integrity concern protects the GE community: our company, our colleagues and our stakeholders.

If you have a concern about compliance with GE policy, you have a responsibility to raise that concern.

RAISE CONCERNS EARLY.

The longer we wait to address a concern, the worse it may become.

YOU MAY REMAIN ANONYMOUS.

However, if you identify yourself, we are able to follow up with you and provide feedback.

CONFIDENTIALITY IS RESPECTED.

Your identity and the information you provide will be shared only on a “need-to-know” basis with those responsible for resolving the concern.

RETALIATION VIOLATES GE POLICY.

GE absolutely prohibits retaliation against anyone for raising or helping to address an integrity concern. Retaliation is grounds for discipline up to and including dismissal.

You can raise a concern orally or in writing.

If you prefer, you can do it anonymously.

  9

How to raise an integrity concern

GE offers several channels for raising concerns. Use the channel that is most comfortable for you.

WITHIN YOUR BUSINESS

Generally, your supervisor or manager will be in the best position to resolve an integrity concern quickly. However, your direct supervisor is not your only option. Other resources include:

• Your compliance leader or auditor

• Company legal counsel

• Next level of management

• Your business ombudsperson or integrity helpline (listed at integrity.ge.com)

GE CORPORATE OMBUDSPERSON

The GE Ombudsperson process allows you to voice your integrity questions and concerns, anonymously if you choose, and you will receive a response.

P.O. Box 911

Fairfield, CT 06430

U.S.A.

800-227-5003 (U.S.A. only) or

8*229-2603 or

(1) 203-373-2603

ombudsperson@corporate.ge.com

GE BOARD OF DIRECTORS

You may report concerns about GE’s accounting, internal accounting controls or auditing matters, as well as other concerns, to the Board of Directors or the Audit Committee.

GE Board of Directors

General Electric Company (W2E)

3135 Easton Turnpike

Fairfield, CT 06828 U.S.A.

800-417-0575 (U.S.A. only)

(1) 203-373-2652

directors@corporate.ge.com

Speak up, ask questions, get answers. If your concern is not addressed, raise it to one of the other channels.

10 The Spirit & The Letter

What happens when an integrity concern is raised

Concerns about compliance with GE policy will be investigated. GE’s investigation process includes:

1. ASSIGNING AN INVESTIGATION TEAM

Experts with the right knowledge and objectivity are assigned to investigate.

2. CONDUCTING AN INVESTIGATION

The team determines the facts through interviews and/or review of documents.

3. CORRECTIVE ACTION

If necessary, the team recommends corrective actions to the appropriate managers for implementation.

4. FEEDBACK

The person raising the concern receives feedback on the outcome.

11

Penalties for violations

Employees and leaders who violate the spirit or letter of GE’s policies are subject to disciplinary action up to and including termination of employment. Misconduct that may result in discipline includes:

• Violating GE policy

• Requesting others to violate GE policy

• Failure to promptly raise a known or suspected violation of GE policy

• Failure to cooperate in GE investigations of possible policy violations

• Retaliation against another employee for reporting an integrity concern

• Failure to demonstrate leadership and diligence to ensure compliance with GE policies and law

GE absolutely

prohibits retaliation

12 The Spirit & The Letter

Business policies and procedures

Your business may issue its own policies and procedures.

You must follow those policies and procedures in addition to those described in this guide.

IMPORTANT This guide and the policies described in it are not an employment contract. GE does not create any contractual rights by issuing this guide or the policies.

Working With Customers & Suppliers

Government Business

Competing Globally

In the GE Community

Protecting GE Assets

The Spirit & The Letter Policies

15

16 The Spirit & The Letter

Improper Payments

WHAT TO KNOW

An improper payment to gain advantage in any situation is never acceptable and exposes you and GE to possible criminal prosecution. GE expressly prohibits improper payments in all business dealings, in every country around the world, with both governments and the private sector.

Improper payments should not be confused with reasonable and limited expenditures for gifts, business entertainment and customer travel and living expenses directly related to the promotion of products or services or the execution of a contract. These payments are acceptable, subject to specific GE corporate and business guidelines.

? ANSWER TO QUESTION ON PAGE 15 It depends on many factors, including whether your customer is a government official, the local law, the customer’s policies, your business’s guidelines and other facts. You must consult with GE counsel and your manager to determine whether the trip is acceptable.

17

WHAT TO DO

BEFORE GIVING A GIFT, engaging in customer entertainment or reimbursing customer travel expenses, make sure you understand applicable legal requirements, the customer’s own rules and GE corporate and business guidelines.

MAKE SURE RECORDS OF SUCH EXPENDITURES accurately reflect the true nature of the transaction.

NEVER OFFER A BUSINESS COURTESY, such as a gift, contribution or entertainment, under circumstances that might create the appearance of an impropriety.

NEVER OFFER, PROMISE, PAY OR AUTHORIZE anything of value (such as money, goods or services) to a government official or employee of a customer to obtain or retain an improper advantage.

NEVER GIVE A GRATUITY or other payment to government officials or employees to expedite a routine administrative action without fully disclosing it to the GE National Executive or GE legal counsel. Some national laws that prohibit bribery outside that nation include an exception for “facilitating payments” to expedite a routine administrative action to which a person is otherwise entitled. These payments are often illegal under local anti-bribery laws, and GE strongly discourages them. Make sure you understand the difference between a bribe — corruptly giving someone else a thing of value in exchange for exercising discretion in your favor — and a facilitating payment, which involves the payment of a small amount of money to expedite a routine action to which you are entitled.

NEVER CONTRIBUTE COMPANY FUNDS or other company assets for political purposes in the United States without the prior approval of GE’s Vice President for Government Relations. Never contribute company funds or other company assets for political purposes outside the United States without the approval of both GE’s Vice President for Government Relations and GE’s Vice President for International Law and Policy.

REQUIRE ANY PERSON OR FIRM WHO REPRESENTS GE (such as a consultant, agent, sales representative, distributor or contractor) to comply with this policy and related laws.

FOLLOW YOUR BUSINESS’S DUE DILIGENCE PROCEDURES when selecting persons or firms to represent GE.

WHAT TO WATCH OUT FOR

BACKGROUND INFORMATION about existing or potential third-party representatives that indicates:

• allegations of improper business practices

• reputation for bribes

• family or other relationship that could improperly influence the decision of a customer or government official

ANY DEMAND to receive a commission payment before the announcement of an award decision

ANY SUGGESTION TO DIRECT GE BUSINESS through a specific representative or partner due to a “special relationship”

ANY REQUEST to make a payment in a country or to a name not related to the transaction.

A COMMISSION that is disproportionate to the services provided

Working With Customers & Suppliers

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

18 The Spirit & The Letter

Supplier Relationships

WHAT TO KNOW

GE’s relationships with suppliers are based on lawful, efficient and fair practices. We expect our suppliers to obey the laws that require them to treat workers fairly, provide a safe and healthy work environment and protect environmental quality. Following GE guidelines helps ensure that our supplier relationships will not damage GE’s reputation.

? ANSWER TO QUESTION ON PAGE 15 Don’t shrug it off. It’s a big issue — GE’s reputation depends on doing business only with suppliers that deal responsibly with their workers and with their local environments.

19

WHAT TO DO

COMPLY WITH APPLICABLE LAWS and government regulations covering supplier relationships.

DO BUSINESS only with suppliers that comply with local and other applicable legal requirements and GE guidelines relating to labor, the environment, health and safety. Follow the procedures set out in GE’s Supplier Reputational Guidelines, found at integrity.ge.com.

FOLLOW GOVERNMENT ACQUISITION REGULATIONS when purchasing materials and services for fulfilling government contracts.

PROVIDE A COMPETITIVE OPPORTUNITY for suppliers to earn a share of GE’s purchasing volume, including small businesses and businesses owned by the disadvantaged, minorities, women and disabled veterans.

SAFEGUARD GE’S CONFIDENTIAL AND PROPRIETARY INFORMATION with a confidentiality agreement, and safeguard any supplier-provided information protected by any confidentiality agreement.

SAFEGUARD “PERSONAL DATA” obtained from suppliers (for instructions, see “Privacy” on page 26).

WHAT TO WATCH OUT FOR

CHOOSING SUPPLIERS on any basis other than open, competitive bidding

POTENTIAL CONFLICTS OF INTEREST in supplier selection, such as accepting improper gifts or other items of value

DIRECTING BUSINESS TO A SUPPLIER owned or managed by a relative or close friend

UNSAFE CONDITIONS in supplier facilities

SUPPLIER EMPLOYEES who appear to be underage or subject to coercion

APPARENT DISREGARD of environmental standards in supplier facilities

ENTRUSTING “PERSONAL DATA” or confidential information to suppliers without ensuring that they have appropriate technical, physical, and organizational measures to prevent unauthorized access or use

Working With Customers & Suppliers

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

20 The Spirit & The Letter

21

22 The Spirit & The Letter

International Trade Controls

WHAT TO KNOW

International trade control (ITC) laws affect the transmission of goods, services and technology across national borders. These laws apply to many aspects of GE’s operations — not just shipping products. Exchanges of information across national boundaries, including e-mail and web access, are subject to trade controls. The United States also controls the release of technical information

to non-U.S. nationals within the United States. It is important that we carefully observe ITC laws in connection with these activities.

? ANSWER TO QUESTION ON PAGE 20 It depends on the export classification of the technical information and your business’s “Know Your Supplier” policy — check with your business’s ITC expert for specific guidance.

23

WHAT TO DO

FOLLOW RELEVANT ITC REGULATIONS of all countries in which you operate and your business’s own ITC procedures as they relate to importing and exporting goods, technology, software, services and financial transactions.

REPORT ALL RELEVANT INFORMATION to your import manager to ensure accurate and complete import declarations. Ensure GE or its agent provides accurate and complete information to government authorities.

CHECK THE EXPORT CLASSIFICATION of the product, software or technology prior to export to determine whether special authorization is required.

SCREEN YOUR TRANSACTIONS against all applicable rules that restrict transactions with certain sanctioned countries, persons and prohibited end uses.

SCREEN ALL YOUR BUSINESS PARTNERS, suppliers and parties involved in your international transactions against government-provided watchlists. Follow your business’s “Know Your Customer/Know Your Supplier” procedures.

DO NOT COOPERATE WITH ANY RESTRICTIVE TRADE PRACTICE or boycott that is prohibited or penalized under U.S. or applicable local laws.

CONSULT WITH YOUR MANAGER if a transaction involves a conflict between U.S. law and applicable local laws, such as the laws adopted by Canada, Mexico and the members of the European Union blocking certain U.S. restrictions.

WHAT TO WATCH OUT FOR ANY FACTS, SOMETIMES KNOWN AS “RED FLAGS,” that suggest your customer may be attempting to evade ITC laws (a complete list of “Red Flags” is available from the International Law & Policy site found at integrity.ge.com)

EVASIVE, RELUCTANT OR OTHERWISE UNSATISFACTORY ANSWERS by a customer to questions about end use, end user, delivery dates or delivery locations

INVOLVEMENT OF PARTIES OR ACTIVITIES suspected of any connection with the development of biological, chemical or nuclear weapons, or ballistic missiles

TRANSACTIONS INVOLVING AN EMBARGOED COUNTRY, a citizen or representative of an embargoed country or an individual or entity subject to government sanction

INVOICES ON IMPORTED GOODS where the price shown does not reflect the full value, the description of the goods is not complete, or the country of origin is not correctly identified

ANY PAYMENT TO THE EXPORTER or benefiting the exporter that is not included in the invoice price or otherwise reported

TRANSFER PRICES between related parties that fail to cover appropriate costs and profits

USE OF AN IMPORT TARIFF CLASSIFICATION that does not seem to describe the imported goods accurately

DESIGNATION OF GE AS THE IMPORTER OF RECORD (party responsible for an importation) without maintaining necessary processes to comply with import laws

ENTRY OF GOODS UNDER A PREFERENTIAL DUTY PROGRAM (GSP, NAFTA, ETC.) without supportive procedures assuring compliance with the program’s requirements

Working With Customers & Suppliers

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

24 The Spirit & The Letter

Money Laundering Prevention

WHAT TO KNOW

People involved in criminal activity — e.g., terrorism, narcotics, bribery, and fraud — may try to “launder” the proceeds of their crimes to hide them or make them appear legitimate. More than 100 countries now have laws against money laundering, which prohibit conducting transactions that involve proceeds of criminal activities. A related concern is that legitimate funds may be used to finance terrorist activity — sometimes called “reverse” money laundering.

GE is committed to complying fully with all anti-money laundering and anti-terrorism laws throughout the world. GE will conduct business only with reputable customers involved in legitimate business activities, with funds derived from legitimate sources. Each GE business is required to implement risk-based “Know Your Customer” due diligence procedures calibrated to the risk in question, and to take reasonable steps to prevent and detect unacceptable and suspicious forms of payment. Failing to detect customer relationships and transactions that place GE at risk can severely damage GE’s integrity and reputation.

? ANSWER TO QUESTION ON PAGE 21 Yes, you should be suspicious if a transaction involves transferring funds to or from countries or entities unrelated to the transaction or not logical for the customer. Moreover, requests to transfer money to third parties also raise red flags that need to be investigated to ensure the legitimacy of the transaction. Consult with company counsel or a GE anti-money laundering specialist before proceeding.

25

WHAT TO DO

COMPLY WITH ALL APPLICABLE LAWS and regulations that prohibit money laundering and support and financing of terrorism, and that require the reporting of cash or suspicious transactions. Understand how these laws apply to your business.

FOLLOW YOUR BUSINESS’S “KNOW YOUR CUSTOMER” PROCEDURES. Collect and understand documentation about prospective customers, agents and business partners to ensure that they are involved in legitimate business activities and their funds come from legitimate sources.

FOLLOW YOUR BUSINESS’S RULES concerning acceptable forms of payment. Learn the types of payments that have become associated with money laundering (for example, multiple money orders or travelers checks, or checks on behalf of a customer from an unknown third party).

IF YOU ENCOUNTER A WARNING SIGN of suspicious activity, raise your concern with a designated GE anti-money laundering compliance specialist or company legal counsel and be sure to resolve your concern promptly before proceeding further with the transaction. Ensure the resolution is well documented.

WHAT TO WATCH OUT FOR A CUSTOMER, AGENT OR PROPOSED BUSINESS PARTNER who is reluctant to provide complete information, provides insufficient, false or suspicious information, or is anxious to avoid reporting or record keeping requirements

PAYMENTS using monetary instruments that appear to have no identifiable link to the customer, or have been identified as money laundering mechanisms

ATTEMPTS BY A CUSTOMER or proposed business partner to pay in cash

EARLY REPAYMENT of a loan in cash or cash equivalents

ORDERS, PURCHASES OR PAYMENTS that are unusual or inconsistent with the customer’s trade or business

UNUSUALLY COMPLEX DEAL STRUCTURES, payment patterns that reflect no real business purpose, or unusually favorable payment terms

UNUSUAL FUND TRANSFERS to or from countries unrelated to the transaction or not logical for the customer

TRANSACTIONS INVOLVING LOCATIONS identified as secrecy havens or areas of known terrorist activity, narcotics trafficking or money laundering activity

TRANSACTIONS INVOLVING FOREIGN SHELL OR OFFSHORE BANKS, unlicensed money remitters or currency exchangers, or nonbank financial intermediaries

STRUCTURING OF TRANSACTIONS TO EVADE RECORD KEEPING or reporting requirements (for example, multiple transactions below the reportable threshold amounts)

REQUESTS TO TRANSFER MONEY or return deposits to a third party or unknown or unrecognized account

Working With Customers & Suppliers

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

26 The Spirit & The Letter

Privacy

WHAT TO KNOW

A growing number of countries are more stringently regulating the collection and use of consumers’ “personal data” (names, home and office contact information, and other data).

In addition, many countries regulate personal data of company representatives in business-to-business transactions. A few countries even regulate the privacy of information relating to corporations. GE is committed to handling personal data responsibly and in compliance with applicable privacy laws.

? ANSWER TO QUESTION ON PAGE 20 If you collected this data in a country regulated by a “personal data protection” law — for example, most countries in Europe — you may be prohibited by law from using or sharing the information where the person to whom the data pertains has not granted express consent. If you are not sure, consult with the Chief Privacy Leader for your business listed on the Privacy site at Support Central.

27

WHAT TO DO

LEARN AND COMPLY with the following as they apply to personal data including:

• applicable laws and regulations of jurisdictions from which the personal data is collected and in which it is processed or used.

• the privacy policies of GE and your business.

• any contractual obligations that apply.

COLLECT, PROCESS AND USE PERSONAL DATA for legitimate business purposes only.

USE “ANONYMOUS” DATA (names removed and not identifiable) or “aggregated” data (summarized so as not to be identifiable to an individual) instead of personal data where appropriate or required.

LIMIT ACCESS to personal data to individuals who need it for a legitimate business purpose.

USE CARE to prevent unauthorized access in processing of personal data or accidental loss or destruction of personal data.

IF YOU LEARN THAT PERSONAL DATA HAS BEEN USED IN VIOLATION of this policy or your business’s privacy implementing procedures, or if you learn that the security of any system or device containing personal data has been compromised, immediately notify your manager, business Privacy Leader or company legal counsel.

WHAT TO WATCH OUT FOR

INADEQUATE ACCESS OR SECURITY CONTROLS for personal data, such as e-mailing or otherwise distributing personal data to a larger group than legitimately needed, or leaving printouts with personal data at a printer, copy machine or fax machine for others to see

SHARING OF PERSONAL DATA with unaffiliated third parties, such as vendors or suppliers, who lack appropriate security safeguards or restrictions on information use

TRANSFERS OF PERSONAL DATA between countries, without considering applicable legal requirements

Working With Customers & Suppliers

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

29

30 The Spirit & The Letter

Working with Governments

WHAT TO KNOW

GE conducts business with national governments and government-owned enterprises. In the course of our work, we frequently interact with government agencies, officials and public international agencies. In every instance, GE employees must apply the highest ethical standards and comply with applicable laws and regulations, including certain special requirements associated with government transactions.

? ANSWER TO QUESTION ON PAGE 29 No, you cannot submit the invoice and certification until you are certain that the entire installation has been completed in accordance with the contract. Submission of an incorrect certification could subject the company, and you personally, to criminal penalties. Therefore, it is extremely important that all certifications submitted to the government be current, accurate and complete.

31

WHAT TO DO

ABIDE BY APPLICABLE LAWS and regulations relating to working with governments, particularly special requirements associated with government contracts and transactions.

REQUIRE anyone providing goods or services for GE on a government project or contract—such as consultants, sales representatives, distributors or suppliers—to agree to comply with the intent of GE’s Working with Governments policy.

BE TRUTHFUL AND ACCURATE when dealing with government officials and agencies.

ADOPT PROCESSES THAT ENSURE reports, certifications, statements and proposals are current, accurate and complete and that contract requirements are adequately identified and communicated to the responsible parties.

DO NOT MAKE ANY UNAUTHORIZED SUBSTITUTIONS for contracted goods and services or deviate from contract requirements without the written approval of the authorized government official.

WHAT TO WATCH OUT FOR

SPECIAL REQUIREMENTS that apply to transactions with governments, including commercial transactions between private parties financed by government agencies such as the EX-IM Bank, U.S. Agency for International Development, the European Union or the European Bank for Reconstruction and Development

INCORRECT OR UNAUTHORIZED COST-CHARGING on government contracts

DEVIATIONS FROM CONTRACT REQUIREMENTS or unauthorized contract substitutions, such as failure to perform required tests and inspections

SUBMISSION OF INACCURATE OR INCOMPLETE cost or pricing data when this data is required by the government

VIOLATING GOVERNMENT REGULATIONS that establish gratuity restrictions, recruiting and hiring restrictions, or certification procedures

ACCEPTING INFORMATION about a government’s competitive selection of a supplier, or a competitor’s bid or proposal (unless the contracting officer or agency leader has specifically and lawfully authorized the information’s release)

NEGOTIATING FOR EMPLOYMENT with a government official or government official’s family members while the official has the ability to influence decision-making about contracts with the government

Government Business

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

33

34 The Spirit & The Letter

Complying with Competition Laws

WHAT TO KNOW

Competition and antitrust laws:

• Prohibit agreements or understandings between competitors that undermine competition;

• Regulate the behavior of dominant companies; and

• Require prior review and in some instances clearance for mergers, acquisitions and certain other transactions, in order to prevent transactions that would substantially reduce competition.

These laws are complex, and global in reach, and can operate differently in any particular situation. Your business provides specific guidelines on addressing contacts with competitors, obtaining and handling data about competitors, and participating in trade and professional associations and standards setting and product certification organizations. In addition, it is often essential that you involve legal counsel early in the process of developing new commercial initiatives given the many uncertainties that arise in the application of these laws.

? ANSWER TO QUESTION ON PAGE 33 Partnering with a competitor for a specific project may be permissible when the result is an improvement in the solution offered to the customer; for example, when both companies together can provide an offering that neither would be able to supply separately. Always seek legal advice before agreeing to work with a competitor on a joint proposal.

35

WHAT TO DO

COMPLY with all applicable competition laws and regulations as well as competition law decrees, orders and agreements with any competition regulator about how business will be conducted.

REVIEW AND UNDERSTAND both GE and business-specific policies and procedures, and if you have questions or issues, bring them up with company legal counsel.

DO NOT propose or enter into agreements or understandings — expressed or implied, formal or informal, written or oral — with any competitor regarding any aspect of the competition between GE and the competitor. Do not discuss with a competitor or competitor representative:

• prices

• bids

• sales territories, allocation of customers or product lines

• terms or conditions of sale

• production, sales capacity or volume

• costs, profits or profit margins

• market share

• product or service offerings

• customer or supplier classification

• distribution methods

DO NOT propose or enter into agreements with anyone (including competitors, agents, brokers or customers) regarding whether to submit a bid or the terms of a bid where there is an understanding that the bid is submitted for any purpose other than winning the business.

AVOID CONTACTS of any kind with competitors that could create the appearance of improper agreements or understandings.

DO NOT propose or enter into agreements or understandings with customers that restrict the price or other terms at which the customer may resell or lease a product or service to a third party.

DO NOT propose or enter into agreements or understandings with suppliers that restrict the price or other terms at which GE may resell or lease any product or service.

CONSULT with company legal counsel to help reduce the risks of noncompliance in the evaluation of any proposed merger, acquisition, joint venture or any other business arrangement that could raise competition law issues (examples of arrangements that need to be discussed with counsel are listed in “What to Watch Out For” below).

WHAT TO WATCH OUT FOR

EXCLUSIVE ARRANGEMENTS for the purchase or sale of products or services

BUNDLING of goods and services

AGREEMENTS THAT RESTRICT A CUSTOMER’S CHOICES in using or reselling a GE product or service

TECHNOLOGY LICENSING agreements that restrict the freedom of the licensee or licensor

SELECTIVE PRICE DISCOUNTING to only certain customers

DISTRIBUTION ARRANGEMENTS with competitors

AGREEMENTS TO ADD A GE EMPLOYEE to another entity’s board of directors

Competing Globally

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

37

38 The Spirit & The Letter

Fair Employment Practices

WHAT TO KNOW

Fair employment practices do more than keep GE in compliance with applicable labor and employment laws. They contribute to a culture of respect. GE is committed to complying with all laws pertaining to freedom of association, privacy, collective bargaining, immigration, working time, wages and hours, as well as laws prohibiting forced, compulsory and child labor and employment discrimination. Beyond legal compliance, we strive to create an environment considerate of all employees wherever GE business is being conducted.

? ANSWER TO QUESTION ON PAGE 37 Yes. Reasonable accommodations should be made to provide access and facilitate full participation in the meeting, or alternative arrangements should be made for you.

39

WHAT TO DO

BASE EMPLOYMENT DECISIONS on job qualifications (e.g., education, prior experience) and merit. Merit includes an individual’s skills, performance, values, leadership and other job-related criteria.

MAKE ALL EMPLOYMENT RELATED DECISIONS AND ACTIONS without regard to a person’s race, color, religion, national origin, sex (including pregnancy), sexual orientation, age, disability, veteran status or other characteristic protected by law.

PROVIDE A WORK ENVIRONMENT free of improper harassment and bullying.

RESPECT THE PRIVACY RIGHTS of employees by using, maintaining and transferring personal data in accordance with GE’s Employment Data Protection Standards and related procedures found at integrity.ge.com. (While seeking to maintain employee privacy, GE reserves the right to monitor use of company property, including computers, e-mail, phones, proprietary information, etc., in accordance with applicable law.)

TAKE LAWFUL AFFIRMATIVE ACTIONS in the United States, and elsewhere if required by local law, to increase opportunities in employment for women, minorities, people with disabilities and certain veterans.

IF A CONFLICT ARISES between the requirements of this policy and the laws, customs or practices of a particular area, consult with management and company legal counsel to determine the most appropriate course of action.

WHAT TO WATCH OUT FOR

A HOSTILE WORK ENVIRONMENT (for example, telling jokes or displaying materials that ridicule or offend a member of a particular race or ethnic group)

MAKING UNWELCOME SEXUAL ADVANCES to another employee or person with whom you work

VIOLATING A LABOR LAW in your country (for example, hiring a child under the legal minimum age)

REFUSING TO WORK, or otherwise cooperate with, certain individuals because of their race, religion, sex, or other characteristic protected by law

DISCLOSING EMPLOYMENT DATA to a person who does not have the business need, authority or the subject’s consent

TAKING AN ADVERSE ACTION against an employee (e.g., firing) because the employee has raised a concern about a violation of policy or law

In the GE Community

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

40 The Spirit & The Letter

41

42 The Spirit & The Letter

Environment, Health & Safety

WHAT TO KNOW

Protecting the environment and the health and safety of employees is the law — and GE believes it’s also the right thing to do. Through management leadership and employee commitment, GE works to conduct its operations in a safe manner that minimizes environmental impact. This policy affects all company activities — not just managing our waste and emissions, but everything we do — for example, selling products, driving a car on company business, acquiring a new business or providing customer service.

? ANSWER TO QUESTION ON PAGE 41 Absolutely not. Both GE policy and safe work practices require that energized machinery be de-energized before work is commenced.

43

WHAT TO DO

COMPLY with all applicable environmental health and safety (“EHS”) laws and regulations, and GE EHS policies.

CREATE AND MAINTAIN a safe working environment and prevent workplace injuries.

ASSESS EHS LEGAL AND REPUTATIONAL RISKS before starting a new activity, venture or project, selling a new product, acquiring a new business or participating in a hazardous business.

CONSIDER EHS IMPACTS in the design and production of GE’s products and services as part of evaluating the “life cycle” of our products.

ELIMINATE UNREASONABLE EHS RISKS from GE’s facilities, products, services and activities.

AS PRACTICABLE, REDUCE TOXIC AND HAZARDOUS MATERIALS; prevent pollution; and conserve, recover and recycle materials, water and energy.

CONTINUE TO IMPROVE OUR EHS SYSTEMS and performance as an integral part of GE’s operational strategy.

PRESENT IDEAS that support the goals of this policy to your manager or your business’s EHS manager.

PROMPTLY ALERT YOUR MANAGER or EHS contact of unlawful or unsafe conditions.

WHAT TO WATCH OUT FOR

UNSAFE ACTIVITIES AND CONDITIONS, such as:

• failure to use personal protective equipment (shoes, safety glasses, hearing protection, gloves, monitors, etc.)

• unlabeled or unapproved chemicals

• exposed or unsafe wiring

• blocked fire or emergency exits

• unsafe driving, or failure to wear seat belts or follow GE’s driving policies

• working in high places without fall protection

• working beneath heavy, suspended loads, or improperly using cranes

• working on electrical or powered equipment without following safety (e.g. “lock-out, tag-out”) procedures

• working unsafely at a customer site

• potential exposure to serious infectious diseases

• disabling safety controls or guarding on equipment and machinery

FAILURE TO COMPLY with health, safety or environmental regulations and procedures

EHS COMPLAINTS from employees, customers or neighbors

UNREPORTED environmental, health or safety hazards or accidents

FAILING TO RESPOND promptly to concerns about possible product safety issues

MISSED OPPORTUNITIES for reducing waste and toxic materials

FAILING TO FOLLOW GE POLICIES for the management, shipping, transportation, import/export and disposal of hazardous materials and chemicals

RISKS AND LIABILITY associated with new acquisitions as well as both new and existing products, processes, services and ventures that present increased legal liability and reputational risk

INADEQUATE SECURITY procedures or practices that may present safety threats to a facility and/or employees

NEW PRODUCTS, processes, ventures or acquisitions that present increased legal liability and reputational risk

In the GE Community

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

44 The Spirit & The Letter

Security & Crisis Management

WHAT TO KNOW

In an age of increasing terrorist threats, protecting the security of our people, workplaces, information and businesses is critical. It starts with every business implementing a rigorous and comprehensive security and crisis management (SCM) plan. GE’s SCM plan includes measures for preventing terrorist and other criminal acts covering our employees, facilities, information, information technology (IT) infrastructure, business continuity and crisis management. In addition, employees must take every precaution to avoid doing business with terrorists or those that support terrorist activity.

? ANSWER TO QUESTION ON PAGE 41 No, don’t ship the equipment until the screening is done. GE cannot agree to do business with a customer, supplier or any other third party until after all required Watchlist screening has been completed

45

WHAT TO DO

IMPLEMENT RIGOROUS PLANS to address the security of employees, facilities, information, IT assets and business continuity.

PARTICIPATE IN your business’s emergency planning and emergency drills.

COMPLY WITH the entry and exit rules at GE facilities, including wearing the appropriate badge.

PROTECT ACCESS to GE facilities from all but authorized personnel.

PROTECT IT ASSETS from theft or misappropriation.

CREATE AND MAINTAIN a safe working environment—this includes identifying and reporting indicators of workplace violence.

COMPLY WITH global immigration rules when traveling internationally, and ensure that employees or visitors who work for you or are closely associated with your business also comply.

COMPLY WITH all GE international travel policies. Obtain appropriate pre-clearances to designated countries.

CONDUCT appropriate background checks on new hires and contractors, wherever allowed by law.

ENSURE PROPER BUSINESS continuity plans are prepared for an emergency.

SCREEN all customers, suppliers, agents and dealers against appropriate terrorist Watchlists.

REPORT ANY APPARENT security lapses to your manager, Crisis Management Leader or GE Ombudsperson.

WHAT TO WATCH OUT FOR

INDIVIDUALS AT GE FACILITIES not wearing appropriate badges

UNSECURE IT ASSETS, such as laptops, servers, etc.

INADEQUATE PROTECTION of hazardous materials

UNSECURE AREAS OF A FACILITY where only authorized personnel are allowed to enter

SECURITY COMPLAINTS from employees, customers or neighbors

UNAUTHORIZED ENTRY to a facility

DOING BUSINESS with a customer, supplier or any third party without sufficient screening

In the GE Community

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

47

48 The Spirit & The Letter

Intellectual Property

WHAT TO KNOW

GE’s intellectual property is one of its most valuable assets. All employees must work to safeguard our patents, trademarks, copyrights, trade secrets and other proprietary information. At the same time, it is critical that we respect the valid intellectual property rights of others. Unauthorized use of others’ intellectual property can expose the Company and even individual GE employees to civil law suits and damages, including significant fines and criminal penalties. A key to protecting our intellectual property and, at the same time, guarding against these risks, is the timely and reasonable review of new GE products, services, processes and software, for possible inventions and trade secrets and infringement of the intellectual property rights of others.

? ANSWER TO QUESTION ON PAGE 47 No. Patent counsel should be consulted first, because showing the feature to the customer before a patent application is filed could result in the loss of GE’s right to obtain a patent.

49

WHAT TO DO

IDENTIFY AND PROTECT GE intellectual property.

FOLLOW THE REQUIREMENTS of GE’s Submitted Ideas Procedure (found at ge.com/en/subidea) in handling any unsolicited ideas from outsiders as well as any employee ideas not covered by the “Employee Innovation and Proprietary Information Agreement” (EIPIA). For more information, consult the “Intellectual Property Rights” Management Procedure found at integrity.ge.com.

RESPECT VALID PATENTS, copyrighted materials and other protected intellectual property of others.

CONSULT with Company legal counsel concerning necessary licenses or approvals to use protected intellectual property of others such as patents, trademarks or proprietary information (i.e. information that is in confidence and not publicly known or generally available).

CONSULT with company legal counsel before:

• soliciting, accepting or using proprietary information of outsiders (for example, soliciting from a customer proprietary information of a competitor)

• disclosing GE proprietary information to outsiders

• permitting outsiders to use GE intellectual property

UNDERSTAND YOUR RESPONSIBILITIES to the Company regarding new inventions, ideas that you may develop as a GE employee and the Company’s information. Consult with company legal counsel if you have any question about these responsibilities, or about the EIPIA (signed by exempt employees and other employees in a position of trust or likely to make inventions).

COMPLY with the guidelines for use of the GE primary trademarks and trade names (available at gebrandcentral.com) and GE’s “Intellectual Property Rights” Management Procedure found at integrity.ge.com.

WHAT TO WATCH OUT FOR

ACCEPTING PROPRIETARY INFORMATION belonging to an outsider, without first consulting company legal counsel

DISCUSSING GE PROPRIETARY INFORMATION with customers or suppliers

USING ANOTHER COMPANY to develop new products or software without a written agreement in place covering ownership and other rights in the developed intellectual property

PASSING ON, for technical or management review, an outsider’s suggestion for a new product, product feature, service or name, without following the GE Submitted Ideas Procedure (found at ge.com/en/subidea)

INTRODUCING, OR PROVIDING INFORMATION about, a new product or service before patent applications have been filed or a decision has been made not to file an application

INTRODUCING A NEW PRODUCT or service, or new product or service name, before checking for patent or trademark infringement

THREATENING anyone suspected of infringing any GE intellectual property without first consulting with company legal counsel

EMPLOYING A NEW PERSON, especially a person who previously worked for a competitor, without putting in place safeguards to prevent the person from inadvertently disclosing or using the proprietary information of the previous employer

EMPLOYING A PERSON who has not signed the EIPIA in a job where inventions are likely to be made

Protecting GE Assets

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

50 The Spirit & The Letter

Controllership

WHAT TO KNOW

Controllership embodies three fundamental elements: (1) rules that classify transactions and balances appropriately; (2) systems and controls that protect assets and accumulate information consistently and correctly; and (3) financial and transaction reporting that is timely and unbiased. Controllership creates the right environment for disclosing timely, reliable and accurate information to government agencies and the public.

? ANSWER TO QUESTION ON PAGE 47 No. This can be damaging both economically (giving away margin and putting strain on a customer relationship) and from an accounting standpoint (not technically a sale, as the rules for revenue recognition have not been met).

51

WHAT TO DO

FOLLOW GE’S GENERAL ACCOUNTING PROCEDURES, as well as applicable generally accepted accounting principles, standards and regulations for accounting and financial reporting.

ENSURE THAT FINANCIAL AND NONFINANCIAL INFORMATION and operating metrics are reported accurately and in a timely fashion.

MAINTAIN COMPLETE, ACCURATE AND TIMELY records and accounts to appropriately reflect all business transactions.

SAFEGUARD ALL COMPANY ASSETS (physical, financial and informational).

PROVIDE TIMELY, CANDID FORECASTS and assessments.

MAINTAIN SOUND PROCESSES and controls.

COMPLY WITH GE’S DOCUMENT MANAGEMENT PROCEDURES (found at integrity.ge.com) as well as all applicable laws and regulations relating to the preservation of documents and records.

PRESERVE DOCUMENTS AND RECORDS relevant to pending or reasonably foreseeable litigation, audits or investigations, and as directed by Company counsel.

WHAT TO WATCH OUT FOR

FINANCIAL RESULTS THAT SEEM INCONSISTENT with underlying performance

INACCURATE FINANCIAL RECORDS, such as overstated travel and living expense reports, or erroneous timesheets or invoices

TRANSACTIONS THAT ARE INCONSISTENT with good business economics

ABSENCE OF CONTROLS to protect assets from risk of loss

PHYSICAL ASSETS or other resources that could be more fully used, reallocated or disposed of

CIRCUMVENTING REVIEW and approval procedures

INADEQUATE ROUTINES AND CONTROLS at newly acquired businesses and at remote and/or understaffed sites

INADEQUATE ROUTINES AND CONTROLS to preserve documents (including e-mail) for pending or reasonably foreseeable litigation, audits and investigations

DISPOSAL OF DOCUMENTS without knowing what is being discarded or whether the documents are subject to legal preservation requirements

FALSE OR EXAGGERATED STATEMENTS in e-mail, presentations or other documents

Protecting GE Assets

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

52 The Spirit & The Letter

53

54 The Spirit & The Letter

Conflicts of Interest

WHAT TO KNOW

On the job or in your free time, nothing you do should conflict with your responsibilities to GE. No activity at work or at home should hurt GE’s reputation or good name. Misusing GE resources or influence is also prohibited. Even when nothing wrong is intended, the appearance of a conflict can have negative effects. It is crucial to consider how your actions might appear, and to avoid the perception of a conflict of interest.

? ANSWER TO QUESTION ON PAGE 53 This is not explicitly prohibited, but the Conflicts of Interest policy requires that you disclose the situation to GE management, and that you not attempt to influence GE business with your cousin’s company.

55

WHAT TO DO

DISCLOSE (in writing to your manager and to company legal counsel) all of your outside activities, financial interests or relationships that may either present a conflict or the appearance of one.

USE GOOD JUDGMENT in all personal and business dealings outside your GE job.

AVOID ACTIONS OR RELATIONSHIPS that may cause potential conflicts or create the appearance of a conflict with your job or GE’s interests.

DO NOT MISUSE or use for personal gain GE resources, intellectual property, time or facilities — this includes office equipment, e-mail and computer applications.

DO NOT TAKE for yourself personally any opportunities that GE could have an interest in that are discovered through the use of GE position, information or property.

GET APPROVALS before accepting officer or director positions with an outside business while you are a GE employee.

GET YOUR MANAGER’S APPROVAL when accepting not-for-profit board positions, particularly if the organization has a GE relationship or might expect GE financial or other support.

WHAT TO WATCH OUT FOR

FINANCIAL INTERESTS in a company where you could personally affect GE’s business with that company (for example, a customer, supplier or investment)

PART-TIME JOBS which you perform using GE hours or GE equipment or materials

GIFTS of other than nominal value from suppliers, customers or competitors, particularly if you’re making decisions (on GE’s behalf) that involve them

PERSONAL DISCOUNTS or other benefits from suppliers, service providers or customers that the public or your GE peers do not receive

DIRECTING BUSINESS to suppliers when you know they are owned or managed by your family members or close friends

MISUSING GE RESOURCES, your position or influence to promote or assist an outside activity

HIRING, PROMOTING OR DIRECTLY SUPERVISING a family member or close friend

PERSONAL RELATIONSHIPS that may conflict with your GE responsibilities or compromise company interests

Protecting GE Assets

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

56 The Spirit & The Letter

Insider Trading & Stock Tipping

WHAT TO KNOW

In the course of your job, you may learn of material information about GE or other companies before it is made public. You may simply overhear a hallway conversation or come across a memo left at a copy machine. Using this information for your financial or other personal benefit or conveying this information to others constitutes a violation of this policy and may even violate the law. This includes buying or selling the securities of any company about which you have material non-public information and giving this “inside information” to anyone else who might base financial trades on the information you’ve shared.

? ANSWER TO QUESTION ON PAGE 52 Yes, if Company X is a public company and the possible acquisition of Company X has not been publicly announced. If your brother trades Company X stock based on your tip, both of you could be charged with insider trading.

57

WHAT TO DO

DO NOT BUY OR SELL the securities of any company, including GE, either directly or through family members or other persons or entities, while you are aware of inside information about the company. (This is known as “insider trading.”)

DO NOT RECOMMEND OR SUGGEST that anyone else buy or sell the securities of any company, including GE, while you have inside information about the company. (This is known as “tipping.”)

MAINTAIN THE CONFIDENTIALITY of Company information and do not convey information to anyone outside the Company unless it is necessary for the Company’s business activities.

IF THE NATURE OF YOUR BUSINESS’S ACTIVITIES and your position in the business subject you to additional requirements relating to buying and selling securities (such as pre-clearing personal trades through the Transaction Control Authority, found at integrity.ge.com), learn and follow all of those requirements.

IF QUESTIONS ARISE, consult company counsel before trading in the security or disclosing company information.

WHAT TO WATCH OUT FOR

NON-PUBLIC INFORMATION WHICH, IF DISCLOSED, would reasonably be expected to affect the price of a security or would influence your decision to buy, sell or hold a security, such as an earnings announcement or a prospective acquisition announcement (this is known as “inside information”)

BUYING OR SELLING A SECURITY because you hear or learn of information at work that you think will make the price go up or down once it’s publicly announced

ENGAGING IN TRADING ACTIVITY around the time of a significant company announcement

DISCUSSING GE BUSINESS with family and friends

TALKING ABOUT WHAT YOU’RE WORKING ON or where you’re going on company business or who visited the office

Protecting GE Assets

FOR MORE IN-DEPTH INFORMATION GO TO: integrity.ge.com

58 The Spirit & The Letter

Index

A

Acquisition 19, 34, 35, 43, 56, 57

Affiliates 5, 59

Affirmative action 39

Agent 5, 17, 23, 25, 35, 45

Antitrust laws 34

Appendix 59

Assets 13, 17, 45, 46, 48, 50, 51

B

Board of directors 9, 35

Boycotts 23

Bribery 16, 17, 24

Business policies and procedures 12, 35

C

Cash transactions 25

Code of Conduct 1, 2, 3

Commission 17

Competing Globally 13, 32-35

Competition Laws, Complying with 32-35

Competitors 31, 33, 34, 35, 49, 55

Compliance specialists 4, 6, 9, 25

Concerns, Integrity 1, 4, 6, 7, 8-10, 11, 39, 43

Confidential Information 8, 19, 57

Confidentiality 8, 19, 57

Conflicts of Interest 3, 19, 46, 53, 54-55

Conflicts between laws 39, 59

Consultants 5, 17, 31

Contractors 5, 17, 45

Contracting officer 31

Contributions 17

Controlled affiliates 5, 59

Controllership 46, 47, 50-51

Copyrights 48, 49

Cost-charging 31

Crisis Management 36, 41, 44-45

Customer relationships 24, 50

D

Disability 39

Discrimination 38

Distributors 5, 17, 31

Due diligence 17, 24

E

Embargoed countries 23

Employee responsibilities 1, 6, 12, 30, 48, 49, 54, 55

Employment Practices 3, 11, 31, 36, 37, 38-39

Entertainment 16, 17

Environment 3, 18

Environment, Health & Safety 18, 19, 36, 41, 42-43

Ethical conduct 1, 2, 3, 7

Ethical standards 30

Exports 21, 22, 23, 43

F

Fair Employment Practices 3, 36, 37, 38-39

Facilitating payment 17

Family 17, 31, 55, 57

Financial records 51

Financial reporting 50, 51

Forecasts 51

Fund transfers 21, 24, 25

G

Generally accepted accounting principles 51

Gifts 16, 17, 19, 55

Government Business 13, 28-31

Government contracts 19, 31

Gratuity 17, 31

H

Harassment 39

Hazardous materials 43, 45

Health 18, 19, 36, 41, 42, 43

Hiring 31, 39, 55

Hostile work environment 39

I

Imports 21, 23, 43

Improper Payments 14, 15, 16-17

In the GE Community 13, 36-45

Independent contractors 5, 17, 45

Inside information 56, 57

Insider Trading & Stock Tipping 46, 52, 56-57

Integrity Web site 4, 6, 9, 19, 23, 39, 49, 51, 57, 60

Intellectual Property 46, 47, 48-49, 55

International Trade Controls (ITC) 14, 20, 22-23

J

Joint venture 35

K

“Know Your Customer” 23, 24, 25

“Know Your Supplier” 22, 23

L

Laundering money 14, 21, 24, 25

Leadership responsibilities 1, 3, 7, 11

Licenses 49

Licensing agreements 35

M

Merger 34, 35

Minorities 19, 39

Money Laundering Prevention 14, 21, 24-25

N

Non-controlled affiliates 5

Non-public information 56, 57

Not-for-profit 55

O

Ombudsperson 1, 4, 6, 7, 9, 45

Outside activities 55

P

Part-time job 55

Patents 47, 48, 49

Payments 14, 15, 16-17, 23, 24, 25, 29

Penalties for Violations 11

Personal data 19, 26, 27, 39

Political contributions 17

Price 15, 23, 35, 57

Privacy 14, 19, 20, 26-27, 38, 39

Property, company 39

Property, intellectual 46, 47, 48-49, 55

Proprietary information 19, 39, 48, 49

Protecting GE Assets 13, 46-57

R

Raising a concern 6, 8-10, 11

Red flags 23, 24

Relatives 19

Responsibilities, employee 1, 6, 12, 30, 48, 49, 54, 55

Responsibilities, leader 1, 3, 7, 11

Restrictive trade practice 23

Retaliation 7, 8, 11

S

Safety 19, 36, 41, 42, 43

Sales representatives 5, 17, 31

Securities 56, 57

Security and Crisis Management 27, 36, 41, 43, 44-45

Sexual advances 39

Stock tipping 46, 52, 56-57

Submitted Ideas Procedure 49

Subsidiaries 5, 59

Supplier Relationships 14, 15, 18-19

Supplier Reputational Guidelines 19

Suppliers 13, 14, 15, 18-19, 20, 22, 23, 27, 31, 35, 44, 45, 49, 55

Suspicious transactions 21, 24, 25

T

Terrorism 24-25, 44-45

Third parties 5, 7, 17, 24, 25, 27, 35, 44, 45

Toxic materials 43

Trademarks 48, 49

Trade names 49

Trade secrets 48

Transaction Control Authority 57

Transactions 17, 23, 24, 25, 26, 30, 31, 34, 50, 51

Travel and living expenses 16, 17, 51

V

Veterans 19, 39

Violations 4, 6, 7, 8, 11, 12, 27, 39, 56

W

Watchlists 23, 41, 44-45

Web site 4, 6, 9, 60

Working with Customers & Suppliers 13, 14-27

Working with Governments 28, 29, 30-31

Women 19, 39

Y

Your Personal Commitment 1, 4

Appendix

WHICH LAW APPLIES

GE conducts business in more than 100 countries around the world. Our employees are citizens of many different countries. As a result, our operations are subject to the laws of many countries, provinces, states and municipalities, and organizations such as the European Union.

An important challenge for all of us is to understand how these laws may apply to our operations. GE, the parent company, is a corporation organized in the United States. The laws of the United States frequently extend to the operations of GE and its affiliates throughout the world, as well as to the business activities of GE employees wherever they live and work. Other countries may also apply their own laws outside of their borders to their own citizens and to corporations that are organized under their laws, such as GE subsidiaries or other controlled affiliates.

The references in GE policies to the laws of the United States and the other countries where we do business reflect the reality that a global company is regulated by many different laws at the same time. In some instances, there may be a conflict between the applicable laws of two or more countries. When you encounter such a conflict, it is especially important to consult company legal counsel to understand how to resolve that conflict properly.

^®2005 General Electric Company Printed in the U.S.A.

The cover to this document was printed on paper made with 30% postconsumer waste fiber. The paper was manufactured using wind-generated energy and is Green Seal certified. The inside pages to this document were printed on paper containing 10% postconsumer recovered fiber and manufactured with green power in the form of electricity generated from renewable resources including 85% Hydro Power, 10% Wind Power and 5% Biogas.

GE employed a printer that produces all of its own electricity and is a certified totally enclosed facility that produces virtually no volatile organic compound emissions.

General Electric Company

Fairfield, Connecticut 06828

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imagination at work

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF

UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD.

PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

I, John R. Sprouls certify that:

1. I have reviewed this annual report on Form 10-K of Universal City Development Partners, Ltd. and UCDP Finance, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) for the registrants and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 20, 2008

By:	/s/ JOHN R. SPROULS
	John R. Sprouls
	Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF

UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD.

PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

I, Tracey L. Stockwell, certify that:

1. I have reviewed this annual report on Form 10-K of Universal City Development Partners, Ltd. and UCDP Finance, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrants as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) for the registrants and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrants, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 20, 2008

By:	/s/ TRACEY L. STOCKWELL
	Tracey L. Stockwell
	Principal Financial Officer

EX-31.3

EXHIBIT 31.3

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF

UCDP FINANCE, INC.

PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

I, John R. Sprouls certify that:

1. I have reviewed this annual report on Form 10-K of Universal City Development Partners, Ltd. and UCDP Finance, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 20, 2008

By:	/s/ JOHN R. SPROULS
	John R. Sprouls
	President (Principal Executive Officer)

EX-31.4

EXHIBIT 31.4

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF

UCDP FINANCE, INC.

PURSUANT TO RULE 13a-14(a) OR RULE 15d-14(a)

I, Tracey L. Stockwell, certify that:

1. I have reviewed this annual report on Form 10-K of Universal City Development Partners, Ltd. and UCDP Finance, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 20, 2008

By:	/s/ TRACEY L. STOCKWELL
	Tracey L. Stockwell
	Treasurer (Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF

UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD.

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the annual report of Universal City Development Partners, Ltd. (the “Company”) on Form 10-K for the period ending December 31, 2006 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracey L. Stockwell, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 20, 2008

By:	/s/ JOHN R. SPROULS
	John R. Sprouls
	President (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF

UNIVERSAL CITY DEVELOPMENT PARTNERS, LTD.

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the annual report of Universal City Development Partners, Ltd. (the “Company”) on Form 10-K for the period ending December 31, 2006 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracey L. Stockwell, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 20, 2008

By:	/s/ TRACEY L. STOCKWELL
	Tracey L. Stockwell
	Principal Financial Officer

EX-32.3

EXHIBIT 32.3

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF

UCDP FINANCE, INC.

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the annual report of UCDP Finance, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2006 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John R. Sprouls, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 20, 2008

By:	/s/ JOHN R. SPROULS
	John R. Sprouls
	President (Principal Executive Officer)

EX-32.4

EXHIBIT 32.4

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF

UCDP FINANCE, INC.

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the annual report of UCDP Finance, Inc. (the “Company”) on Form 10-K for the period ending December 31, 2006 filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tracey L. Stockwell, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 20, 2008

By:	/s/ TRACEY L. STOCKWELL
	Tracey L. Stockwell
	Principal Financial Officer