Virgin Media 2008 Annual Report Download - page 147

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 16—Shareholders’ Equity (Continued)
our subsidiaries’ existing and future indebtedness and the laws of jurisdictions under which those
subsidiaries are organized limit the payment of dividends, loan repayments and other distributions to us
under many circumstances.
Series A Warrants
On January 10, 2003, we issued Series A warrants to some of our former creditors and
stockholders. The Series A warrants were initially exercisable for a total of 8,750,496 shares of common
stock at an exercise price of $309.88 per share. After adjustment to account for the rights offering and
the reverse acquisition of Telewest in accordance with anti-dilution adjustment provisions, the Series A
warrants are exercisable for a total of 25,769,060 shares of our common stock at an exercise price of
$105.17 per share. The Series A warrants expire on January 10, 2011. The agreement governing the
Series A warrants is governed by New York law. The Series A warrants are listed on the NASDAQ
Global Select Market under the symbol ‘‘VMEDW.’’ The Series A warrants may be subject to further
change.
Note 17—Commitments and Contingent Liabilities
At December 31, 2008, we were committed to pay £678.0 million for equipment and services. This
amount includes £311.2 million for operations and maintenance contracts and other commitments from
January 1, 2010 to 2016. The aggregate amount of the fixed and determinable portions of these
obligations for the succeeding five fiscal years and thereafter is as follows (in millions):
Year ending December 31:
2009 ..................................................... £366.8
2010. .................................................... 105.2
2011. .................................................... 88.4
2012. .................................................... 45.1
2013. .................................................... 20.5
Thereafter ................................................ 52.0
£678.0
We are involved in lawsuits, claims, investigations and proceedings, consisting of intellectual
property, commercial, employee and employee benefits which arise in the ordinary course of our
business. In accordance with FASB Statement No. 5, Accounting for Contingencies, or FAS 5, we
recognize a provision for a liability when management believes that it is both probable that a liability
has been incurred and the amount of the loss can be reasonably estimated. We believe we have
adequate provisions for any such matters. We review these provisions at least quarterly and adjust these
provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other
information and events pertaining to a particular case. Whilst litigation is inherently unpredictable, we
believe that we have valid defenses with respect to legal matters pending against us. Nevertheless, it is
possible that cash flows or results of operations could be materially affected in any particular period by
the unfavorable resolution of one or more of these contingencies, or because of the diversion of
management’s attention and the creation of significant expenses.
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