Virgin Media 2006 Annual Report Download - page 112

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. Fair Values of Financial Instruments (Continued)
Long term debt: The carrying amount of the senior credit facility approximates its fair value. The fair values of our other debt in
the following table are based on the quoted market prices.
The carrying amounts and fair values of our long term debt are as follows (in millions):
December 31, 2006 December 31, 2005
Carrying
Amount Fair Value Carrying Amount Fair Value
8.75% U.S. Dollar senior notes due 2014 £ 217.0 £ 226.7 £ 247.3 £ 246.9
9.75% Sterling senior notes due 2014 375.0 398.6 375.0 386.3
8.75% Euro senior notes due 2014 151.6 173.2 155.0 179.9
9.125% U.S. Dollar senior notes due 2016 280.8 295.9 — —
13. Stock−Based Compensation Plans
At December 31, 2006, we had a number of stock−based compensation plans, which are described below. In the year ended
December 31, 2006, the compensation cost that has been charged against income for these plans was £36.7 million. Prior to the
adoption of FAS 123R, the compensation cost that was recognized under the principles of FAS 123 was £9.8 million and
£14.3 million for the years ending December 31, 2005 and 2004, respectively. As a result of the adoption of FAS 123R, we have
recorded a cumulative effect of a change in accounting principle of £1.2 million to reduce compensation expense recognized in
previous periods.
The Virgin Media Stock Incentive Plan is intended to encourage Virgin Media stock ownership by employees, directors and
independent contractors so that they may acquire or increase their proprietary interest in our company, and to encourage such
employees, directors and independent contractors to remain in our employ or service and to put forth maximum efforts for the success
of the business. To accomplish such purposes, the Plan provides that we may grant Incentive Stock Options, Nonqualified Stock
Options, Restricted Stock, Restricted Stock Units and Share Awards.
Under the Virgin Media Stock Incentive Plan, options to purchase up to 29.0 million shares of our common stock may be granted
from time to time to certain of our employees and our subsidiaries. Accordingly, we have reserved 29.0 million shares of common
stock for issuance under the Virgin Media Stock Incentive Plan.
Stock Option Grants
As a result of the reverse acquisition of Telewest as described in Note 5, the outstanding options on March 3, 2006 were
converted into 2.5 options to purchase shares in the new parent company, with a corresponding reduction in exercise price. Along with
this, the outstanding options issued by Telewest prior to the acquisition were converted into a 0.89475 option to purchase shares in the
new parent company, with a corresponding adjustment in the exercise price in accordance with the terms of the merger agreement.
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Source: VIRGIN MEDIA INVESTM, 10−K, March 01, 2007