Virgin Media 2008 Annual Report Download - page 134

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 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.
Employer Contributions
In April 2007, we agreed with the trustees of one of our pension plans to a new funding
arrangement whereby we will initially be paying £8.6 million per annum towards the deficit for the next
three years. Additionally, in June 2007, we effected a merger of our three other defined benefit plans.
The merger of these plans was subject to the approval of the trustees and, as a condition of trustee
approval, we agreed to make a specific one-time contribution of £4.5 million. The funding
arrangements with respect to this plan included an agreement to pay a further £2.6 million to fund the
deficit for each of the next seven years. For the year ended December 31, 2008, we contributed
£13.5 million to our pension plans. We anticipate contributing a total of £13.5 million to fund our
pension plans in 2009.
We adopted the provisions of Statement of Financial Accounting Standards No. 158, Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB
Statements No. 87, 88, 106, and 132(R), or FAS 158, as of December 31, 2006. The table below
summarizes the incremental effects of the FAS 158 adoption on the individual line items in our balance
sheet at December 31, 2006 (in millions):
Pre FAS 158 FAS 158 Post FAS 158
Adoption Adjustment Adoption
Deferred revenue and other long term liabilities ............. £32.3 £9.4 £41.7
Accumulated other comprehensive income ................. 10.6 9.4 20.0
Obligations and Funded Status
The change in projected benefit obligation was as follows (in millions):
Year ended
December 31,
2008 2007
Benefit obligation at beginning of year ..................... £323.9 £339.8
Service cost ......................................... 1.4 2.4
Interest cost ........................................ 18.3 16.7
Members’ contributions ................................ 0.4 0.4
Plan amendments .................................... 0.1 —
Actuarial gains ...................................... (24.9) (24.5)
Benefits paid ........................................ (11.4) (11.1)
Plan settlements ..................................... — 0.2
Benefit obligation at end of year ......................... £307.8 £323.9
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