Virgin Media 2009 Annual Report Download - page 204

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 13—Income Taxes (Continued)
the year, projections of the proportion of income (or loss) earned and taxed in the U.K. and the extent
to which this income (or loss) may also be taxed in the United States, permanent and temporary
differences, the likelihood of deferred tax assets being recovered and the outcome of contingent tax
risks. In the normal course of business, our tax returns are subject to examination by various taxing
authorities. Such examinations may result in future tax and interest assessments by these taxing
authorities for uncertain tax positions taken in respect to matters such as business acquisitions and
disposals and certain financing transactions including intercompany transactions, amongst others. We
accrue a liability when we believe an assessment may be probable and the amount is estimable. In
accordance with generally accepted accounting principles, the impact of revisions to these estimates is
recorded as income tax expense or benefit in the period in which they become known. Accordingly, the
accounting estimates used to compute the provision for income taxes have and will change as new
events occur, as more experience is acquired, as additional information is obtained and our tax
environment changes.
Note 14—Related Party Transactions
Virgin Media Inc. and its consolidated subsidiaries
We are a wholly owned subsidiary of Virgin Media. We charge Virgin Media and our other group
companies for operating costs and selling, general and administrative expenses incurred by us on their
behalf. The following information summarizes our significant related party transactions with Virgin
Media and its group companies (in millions):
Year ended December 31,
2009 2008 2007
Operating costs ................................. £45.5 £48.6 £ 45.1
Selling, general and administrative expenses ............ 45.2 46.8 59.7
£90.7 £95.4 £104.8
The above recharges are recorded in operating costs and selling, general and administrative
expenses and offset the respective costs incurred.
Virgin Enterprises Limited
We have identified Virgin Enterprises Limited as a related party to us. Virgin Entertainment
Investment Holdings Limited became a holder of Virgin Media Inc’s common stock as a result of its
acquisition of Virgin Mobile on July 4, 2006. As of December 31, 2009, Virgin Entertainment
Investment Holdings Limited beneficially owned 6.5% of Virgin Media Inc.’s common stock (based on
SEC filings). Virgin Enterprises Limited is a wholly owned subsidiary of Virgin Entertainment
Investment Holdings Limited. In addition, Gordon McCallum is a member of Virgin Media Inc.’s
Board of Directors and is a Director at Virgin Enterprises Limited.
We own and have the right to use registered trademarks, including the exclusive right to use the
‘‘Virgin’’ name and logo in connection with our corporate activities and in connection with the activities
of our consumer and a large part of our content businesses under license from Virgin Enterprises
Limited. This license with Virgin Enterprises Limited is for a 30-year term and exclusive to us within
the U.K. and Ireland. The license entitles us to use the ‘‘Virgin’’ name for the TV, broadband internet,
F-108