Virgin Media 2007 Annual Report Download - page 190

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. Related Party Transactions (Continued)
respect of brand licensing and promotion of which £4.8 million and £2.5 million was payable at the year
end, respectively.
Virgin Retail Limited
We have identified Virgin Retail Limited, an affiliate of Virgin Enterprises Limited, as a related
party to us. We had agreements with Virgin Retail Limited in respect to sales of our communications
services (such as internet, television, fixed line telephone and mobile telephone services), through the
various Virgin Megastores outlets. On September 17, 2007, the Virgin Group sold its interest in Virgin
Megastores which therefore ceased to be a related party. We incurred expenses of £2.3 million during
the period to September 2007 and £1.8 million during the period from July 4, 2006 to December 31,
2006, for charges in respect to these stores. As part of the agreement, Virgin Retail Limited passed
through proceeds on sales of mobile handsets, vouchers and other stock items to us. We recognized
revenues totaling £6.5 million during the period from January 1, 2007 to September 17, 2007 and
£5.7 million during the period from July 4, 2006 to December 31, 2006. As at December 31, 2006, we
had £1.2 million payable to and £2.2 million receivable from Virgin Retail Limited.
Other Virgin companies
As a licensee of the ‘‘Virgin’’ brand name, we participate in mutually beneficial activities with
other Virgin companies. These arrangements are in the ordinary course of business and believed to be
on arm’s length terms. We also participate in charitable activities with Virgin Unite, Virgin Group’s
charitable organization.
UKTV joint ventures
Through our wholly owned subsidiary, Flextech Broadband Limited, we own a 50% equity
investment in the UKTV joint venture companies. We have therefore identified the UKTV joint
venture companies as related parties to us. We also carry the UKTV channels in our pay-television
packages available to our customers.
As at December 31, 2007 and 2006, included in the balance sheet were amounts related to our
share of net assets, loans receivable, redeemable preference shares, and other payable and receivables
in respect of the UKTV joint ventures totaling £367.7 million and £370.6 million, respectively.
We pay UKTV for purchases of television programming rights and receive payments in respect of
advertising and other business support services provided to UKTV. During the year ended
December 31, 2007 and the period from June 19, 2006 to December 31, 2006, the net expense
recognized in respect to these transactions through the statement of operations totaled £21.4 million
and £11.7 million, respectively. These amounts are settled on a net basis at regular intervals.
During the year ended December 31, 2007 and the period from June 19, 2006 to December 31,
2006, we received cash payments from UKTV for loan principal payments, interest, dividends and
consortium tax relief totaling £38.3 million and £23.6 million, respectively.
16. Commitments and Contingent Liabilities
At December 31, 2007, we were committed to pay £724.1 million for equipment and services. This
amount includes £369.9 million for operations and maintenance contracts and other commitments from
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