Virgin Media 2006 Annual Report Download - page 68

repayments and the effects of the refinancing transaction in April 2004 that lowered our weighted average interest rate and
rescheduled some interest payments.
Loss on extinguishment of debt
For the year ended December 31, 2005, loss on extinguishment of debt was £2.0 million, and relates to the redemption of the
$100 million floating rate senior notes due 2012 on July 15, 2005.
For the year ended December 31, 2004, loss on extinguishment of debt was £162.2 million, and relates to the redemption, or
repayment, of our indebtedness in the refinancing transaction. The loss comprises the payment of the premium of £6.4 million on the
redemption of the Diamond notes and the expensing of the unamortized issue costs of £63.8 million and unamortized discount of
£92.0 million on the redemption of the Diamond notes and the Triangle debentures and the repayment of the then−existing senior
credit facility.
Foreign currency transaction (losses) gains
For the year ended December 31, 2005, foreign currency transaction gains were £5.3 million as compared with losses of
£24.4 million for 2004. The foreign currency transaction gains in the year ended December 31, 2005 included gains of £43.7 million
on the forward rate contracts and collars taken out in December 2005 in connection with £1.8 billion of the expected cash purchase
price of Telewest offset by losses on the revaluation of foreign currency denominated long term debt and related forward contracts.
The losses for the year ended December 31, 2004 were primarily because of the effect of changes in the exchange rate on the U.S.
dollar and euro denominated debt and unrealized losses of £35.7 million arising from changes in the fair value of our foreign currency
forward contracts. Our results of operations will continue to be affected by foreign exchange rate fluctuations since £477.2 million of
our indebtedness is denominated in U.S. dollars and £259.1 million is denominated in euros.
Income tax expense
For the year ended December 31, 2005, income tax expense was £18.8 million as compared with income tax expense of
£5.0 million for the same period in 2004. The 2005 and 2004 expense is composed of (in millions):
2005 2004
U.S. state and local income tax £ (1.3) £ 1.3
Deferred U.S. income tax 18.7 3.6
Alternative minimum tax 1.4 0.1
Total £ 18.8 £ 5.0
In 2005, we paid £2.2 million of the alternative minimum tax. In 2004, we paid £0.1 million of the alternative minimum tax and
£0.1 million of U.S. state and local tax expense for 2004. None of the remaining income tax expense is expected to be payable in the
next year.
Minority interest expense
The minority interest expense of £1.0 million for the year ended December 31, 2005 related to the minority interest in the net
assets of NTL (South Hertfordshire) Limited (“NTL South Herts”). No minority interest was recorded for the year ended
December 31, 2004 since the cumulative losses of NTL South Herts applicable to the minority interest exceeded the minority interest
in the equity capital of NTL South Herts and there is no obligation on the part of the minority to make good such losses.
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Source: VIRGIN MEDIA INVESTM, 10−K, March 01, 2007