Virgin Media 2007 Annual Report Download - page 129

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. Income Taxes
The expense/(benefit) for income taxes consists of the following (in millions):
Year ended December 31,
2007 2006 2005
Current:
Federal ................................................... £0.4 £ (0.5) £ 1.4
State and local .............................................. (0.6) — (1.3)
Foreign ................................................... (4.9) (2.7) —
Total current ................................................. (5.1) (3.2) 0.1
Deferred:
Federal ................................................... 7.6 (8.6) 18.7
Foreign ................................................... — — —
Total deferred ................................................ 7.6 (8.6) 18.7
£ 2.5 £(11.8) £18.8
There are significant current year losses in the U.K. The foreign tax benefit relates to amounts
receivable in respect of the sale of U.K. tax losses to an equity method investee. The 2007 federal
deferred tax expense largely relates to holding an equity method investment.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax
purposes. Significant components of deferred tax liabilities and assets are as follows (in millions):
December 31,
2007 2006
Deferred tax liabilities:
Intangibles ................................................. £ 221.9 £ 262.2
Equity investments ........................................... 81.0 77.0
Unrealized foreign exchange differences ............................ 1.0 0.7
Total deferred tax liabilities ....................................... 303.9 339.9
Deferred tax assets:
Net operating losses .......................................... 1,001.1 1,121.1
Capital losses ............................................... 3,411.4 3,655.0
Depreciation and amortization ................................... 2,129.4 2,055.4
Accrued expenses ............................................ 20.1 18.9
Capitalized costs and other ..................................... 217.1 119.9
Total deferred tax assets ......................................... 6,779.1 6,970.3
Valuation allowance for deferred tax assets ............................ (6,556.2) (6,707.6)
Net deferred tax assets .......................................... 222.9 262.7
Net deferred tax liabilities ........................................ £ 81.0 £ 77.2
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