Virgin Media 2007 Annual Report Download - page 73

The principal components of the cash used in financing activities for the year ended December 31,
2005 were the repurchases of our common stock in the open market in February and April 2005 for
£114.0 million, the prepayment of £723.0 million on our senior credit facility and redemption of the
floating rate senior notes due 2012.
Liquidity and Capital Resources
As of December 31, 2007, we had £5,958.5 million of debt outstanding, compared to
£6,099.8 million as of September 30, 2007 and £6,159.1 million as of December 31, 2006, and
£321.4 million of cash and cash equivalents, compared to £364.0 million as of September 30, 2007 and
£418.5 million as of December 31, 2006. The decrease in debt since the previous year is primarily
attributable to a mandatory prepayment of our senior credit facility of £73.6 million in May 2007 as a
result of cash flow generated in 2006, a voluntary prepayment of £200 million in December 2007 from
existing cash balances, and exchange rate movements on our debt denominated in currencies other than
the pound sterling.
Our business is capital intensive and we are highly leveraged. We have significant cash
requirements for operating costs, capital expenditure, interest expense and debt amortization
requirements. The level of our capital expenditures and operating expenditures are affected by the
significant amounts of capital required to connect customers to our network, expand and upgrade our
network, offer new services and integrate our billing systems and customer databases. We expect that
our cash on hand, together with cash from operations and undrawn credit facility, will be sufficient for
our cash requirements through December 31, 2008. However, our cash requirements after
December 31, 2008 may exceed these sources of cash. For instance, debt amortization repayments
under our senior credit facility increase significantly in 2010. We believe that we will need to address
these scheduled principal payments in part through means other than reliance on cash flow from
operations, such as raising additional debt or equity, refinancing our existing facility, possible sales of
assets, or other means. We may not be able to obtain financing, or sell assets at all, or on favorable
terms, or we may be contractually prevented by the terms of our senior notes or our senior credit
facility from incurring additional indebtedness or selling assets.
We are a holding company with no independent operations or significant assets other than our
investments in our subsidiaries. As a result, we will depend upon the receipt of sufficient funds from
our subsidiaries to meet our obligations. In addition, the terms of our existing and future indebtedness
and the laws of the jurisdictions under which our subsidiaries are organized limit the payment of
dividends, loan repayments and other distributions to us under many circumstances.
Our debt agreements contain restrictions on our ability to transfer cash between groups of our
subsidiaries. As a result of these restrictions, although our overall liquidity may be sufficient to satisfy
our obligations, we may be limited by covenants in some of our debt agreements from transferring cash
to other subsidiaries that might require funds. In addition, cross default provisions in our other
indebtedness may be triggered if we default on any of these debt agreements.
Senior Credit Facility
During 2006, we entered into a new senior credit facility in an aggregate principal sterling
equivalent amount of £5,275 million, comprising a £3,350 million 5 year amortizing Tranche A term
loan facility, a £175 million 5 year amortizing Tranche A1 term loan facility, a £300 million 61⁄2 year
bullet Tranche B1 term loan facility, a £351 million 61⁄2 year bullet Tranche B2 term loan facility, a
A500 million 61⁄2 year bullet Tranche B3 term loan facility, a $650 million 61⁄2 year bullet Tranche B4
term loan facility, a £300 million 7 year bullet Tranche C term loan facility and a £100 million 5 year
multi-currency revolving loan facility.
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