Virgin Media 2009 Annual Report Download - page 195

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10—Derivative Financial Instruments and Hedging Activities (Continued)
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—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, 2009, we contributed
£13.4 million to our pension plans. We anticipate contributing a total of £17.2 million to fund our
pension plans in 2010.
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