Virgin Media 2008 Annual Report Download - page 205

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 14—Related Party Transactions (Continued)
Virgin Retail Limited
We had previously 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 and it 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.
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.
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, 2008 and 2007, included in the balance sheet were amounts related to our
share of net assets, loans receivable, redeemable preference shares, and other payables and receivables
in respect of the UKTV joint ventures totaling £353.5 million and £367.7 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, 2008 and 2007 and the period from June 19, 2006 to December 31, 2006, the net
expense recognized in respect to these transactions through the consolidated statement of operations
totaled £22.1 million, £21.4 million and £11.7 million, respectively. These amounts are settled on a net
basis at regular intervals.
During the years ended December 31, 2008 and 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 £46.7 million, £38.3 million and £23.6 million, respectively.
Note 15—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
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