Virgin Media 2007 Annual Report Download - page 68

We paid cash interest of £327.1 million for the year ended December 31, 2006, and £216.8 million
for the year ended December 31, 2005. The increase in cash interest payments resulted from the effects
of the new senior credit facility and senior bridge facility in respect of the reverse acquisition of
Telewest and the acquisition of Virgin Mobile, and changes in the timing of interest payments.
Loss on extinguishment of debt
For the year ended December 31, 2006, loss on extinguishment of debt was £32.8 million, and
related primarily to the write off of deferred financing costs on the senior credit facility that was repaid
upon completion of the refinancing of the reverse acquisition of Telewest.
For the year ended December 31, 2005, loss on extinguishment of debt was £2.0 million, and
related to the redemption of the $100 million floating rate senior notes due 2012 on July 15, 2005.
Foreign currency transaction gains (losses)
For the year ended December 31, 2006, foreign currency transaction losses were £90.1 million as
compared with gains of £5.3 million for 2005. The foreign currency losses in the year ended
December 31, 2006 were largely comprised of foreign exchange losses of £70.8 million on U.S. dollar
forward purchase contracts that were entered into to economically hedge the repayment of the
U.S. dollar denominated bridge facility. The repayment of $3.1 billion of this facility on June 19, 2006
resulted in an offsetting gain during the period of £120.7 million that was recorded as a component of
equity. 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.
Income tax expense (benefit)
For the year ended December 31, 2006, income tax benefit was £11.8 million as compared with
income tax expense of £18.8 million for the same period in 2005. The 2006 and 2005 (benefit)/expense
is composed of (in millions):
2006 2005
U.S. state and local income tax ......................................... £ — £(1.3)
Foreign tax ....................................................... (2.7) —
Deferred U.S. income tax ............................................. (8.6) 18.7
Alternative minimum tax ............................................. (0.5) 1.4
Total ............................................................ £(11.8) £18.8
In 2006, we received refunds of £1.3 million of the U.S. alternative minimum tax and £0.1 million
of U.S. state and local tax. We also paid £3.1 million of U.S. federal income tax in respect of
pre-acquisition periods of Telewest. In addition, we paid £4.6 million of U.K. tax expense in respect of
pre-acquisition periods of Virgin Mobile. In 2005, we paid £2.2 million of the U.S. alternative minimum
tax.
Loss from continuing operations
For the year ended December 31, 2006, loss from continuing operations was £509.2 million
compared with a loss of £241.7 million for the same period in 2005. The increase in loss from
continuing operations was primarily attributable to the reverse acquisition of Telewest and the
acquisition of Virgin Mobile together with the associated increases in depreciation, amortization,
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