Virgin Media 2009 Annual Report Download - page 57

Loss on Extinguishment of Debt
For the year ended December 31, 2009, loss on extinguishment of debt was £54.5 million which
related to the write off of deferred financing costs as a result of the partial repayments of our senior
credit facility in 2009 and the call premium totaling £30.3 million on the repayment of a portion of the
senior notes due 2014. For the year ended December 31, 2008, loss on extinguishment of debt was
£9.6 million which related to the write off of deferred financing costs as a result of the prepayment of
£804.0 million under our senior credit facility during 2008.
Share of Income From Equity Investments
For the year ended December 31, 2009, share of income from equity investments was £14.1 million
as compared with income of £14.4 million for the same period in 2008. The share of income from
equity investments in the years ended December 31, 2009 and 2008 was largely comprised of our
proportionate share of the income earned by UKTV, which was partially offset by our share of the
losses incurred by Setanta Sports News. Setanta Sports News ceased broadcasting on June 23, 2009
when Setanta Sports Limited entered administration. See Segmental Results of Operations for the
Years Ended December 31, 2009 and 2008—Television Channel Joint Ventures.
(Losses) Gains on Derivative Instruments
The losses on derivative instruments of £114.5 million in the year ended December 31, 2009, were
mainly driven by the U.S. dollar and euro weakening against the pound sterling in the first six months
of the year, which resulted in a reduction in the fair value of the U.S. dollar and euro denominated
cross-currency interest rate swaps not designated as hedges for accounting purposes. The gain on
derivative instruments of £283.7 million in the year ended December 31, 2008, mainly related to
unrealized gains from the recognition of favorable mark to market changes in U.S. dollar and euro
denominated cross-currency interest rate swaps which are not designated as accounting hedges but do
economically mitigate the risk of certain exposures denominated in U.S. dollars and euros.
Foreign Currency Gains (Losses)
For the year ended December 31, 2009, foreign currency gains were £124.3 million as compared
with losses of £403.6 million for the same period in 2008. The foreign currency gains in the year ended
December 31, 2009 were primarily due to the strengthening of the pound sterling which occurred in the
first six months of the year relative to the U.S. dollar and euro and related foreign exchange gains on
the principal portion of our U.S. dollar convertible senior note, which is unhedged, and the U.S. dollar
and euro denominated tranches of the senior credit facility. The foreign currency losses in the year
ended December 31, 2008 were largely comprised of net unrealized losses resulting from unfavorable
exchange movements totaling £364.0 million on our U.S. dollar and euro denominated debt, including a
£171.1 million unfavorable exchange rate movement on the principal portion of our U.S. dollar
denominated convertible senior notes which is unhedged.
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