Virgin Media 2009 Annual Report Download - page 132

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10—Derivative Financial Instruments and Hedging Activities (Continued)
recognized a loss totalling £0.6 million, relating to ineffectiveness. The following table presents the
effective amount of gain or (loss) recognized in other comprehensive income and amounts reclassified
to earnings during the year ended December 31, 2009 (in millions):
Forward foreign
Interest rate Cross-currency exchange Tax
Total swaps interest rate swaps contracts Effect
Balance at December 31, 2008 ...... £ 40.1 £ (7.9) £ 64.0 £ — £(16.0)
Amounts recognized in other
comprehensive income .......... (216.6) (50.6) (165.8) (0.2) —
Amounts reclassified as a result of
cash flow hedge discontinuance .... 6.5 2.0 4.5 — —
Amounts reclassified to earnings
impacting:
Foreign exchange losses ......... 90.6 — 90.6 — —
Interest expense ............... 23.9 24.1 (0.2) — —
Operating costs ................ 0.2 — — 0.2 —
Tax effect recognized ............. — — — — —
Balance at December 31, 2009 ...... £ (55.3) £(32.4) £ (6.9) £ — £(16.0)
Assuming no change in interest rates or foreign exchange rates for the next twelve months, the
amount of pre-tax losses that would be reclassified from other comprehensive income to earnings would
be £30.3 million, nil and nil relating to interest rate swaps, cross-currency interest rate swaps and
forward foreign exchange contracts, respectively.
Note 11—Stock-Based Compensation Plans
At December 31, 2009, we had a number of stock-based compensation plans, which are described
below. In the years ended December 31, 2009 and December 31, 2008, the compensation cost that has
been charged against income for these plans was £19.4 million and £16.8 million, respectively. All our
stock-based awards granted under our long term incentive plans or individual employment agreements
are issued under our stock incentive plans or the Virgin Media Sharesave Plan which have been
approved by our stockholders.
Virgin Media Stock Incentive Plans
The Virgin Media Inc. stock incentive plans are intended to encourage Virgin Media stock
ownership by employees and directors so that they may acquire or increase their proprietary interest in
our company, and to encourage such employees and directors to remain in our employ or service and
to put forth maximum efforts for the success of the business. To accomplish such purposes, the plans
provide that we may grant incentive stock options, nonqualified stock options, restricted stock,
restricted stock units and stock awards.
Under the Virgin Media Inc. 2006 Stock Incentive Plan, options to purchase up to 29.0 million
shares of our common stock may be granted from time to time to certain of our employees.
Accordingly, we have reserved 29.0 million shares of common stock for issuance under the Virgin
Media Inc. 2006 Stock Incentive Plan.
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