Virgin Media 2007 Annual Report Download - page 179

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. Derivative Financial Instruments and Hedging Activities (Continued)
The principal obligations under the $550 million 9.125% senior notes due 2016, the A225 million
senior notes due 2014 and the $628 million and A485 million principal obligations under the senior
credit facility are hedged with cross-currency interest rate swaps.
11. Fair Values of Financial Instruments
In estimating the fair value of our financial instruments, we used the following methods and
assumptions:
Cash and cash equivalents, and restricted cash: The carrying amounts reported in the consolidated
balance sheets approximate fair value due to the short maturity and nature of these financial
instruments.
Long term debt: The carrying amount of the senior credit facility approximates its fair value due
to the fact that this debt instrument pays a floating rate of interest based upon market rates that are
reset semi-annually. 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, 2007 December 31, 2006
Carrying Fair Carrying Fair
Amount Value Amount Value
8.75% U.S. dollar loan notes due 2014 to Virgin Media
Finance PLC ..................................... £214.2 £221.0 £217.0 £226.7
9.75% Sterling loan notes due 2014 to Virgin Media Finance PLC 375.0 358.6 375.0 398.6
8.75% Euro loan notes due 2014 to Virgin Media Finance PLC . . 165.6 157.6 151.6 173.2
9.125% U.S. dollar senior notes due 2016 to Virgin Media
Finance PLC ..................................... 277.2 283.7 280.8 295.9
Floating rate loan notes due 2012 to Virgin Media Finance PLC . 50.4 50.4 51.1 51.1
Other loan notes due to affiliates ........................ 284.7 284.7 277.6 277.6
12. Employee Benefit Plans
Defined Benefit Plans
Certain of our subsidiaries operate defined benefit pension plans in the U.K. The assets of the
plans are held separately from those of ourselves and are invested in specialized portfolios under the
management of investment groups. The pension cost is calculated using the projected unit method. Our
policy is to fund amounts to the defined benefit plans necessary to comply with the funding
requirements as prescribed by the laws and regulations in the U.K. Our defined benefit pension plans
use a measurement date of December 31.
F-93