Virgin Media 2011 Annual Report Download - page 106

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 3—Earnings Per Share (continued)
The following table sets forth the number of potential common shares excluded from the calculation of the
denominator for diluted income (loss) per common shares (in millions):
Year ended December 31,
2011 2010 2009
Stock options ........................................................ 3.4 10.5 17.3
Sharesave options .................................................... 0.7 0.5 2.7
Restricted stock held in escrow .......................................... 0.6 0.7 1.4
Restricted stock units .................................................. 2.5 5.2 4.3
Warrants ............................................................ 0.0 25.8 25.8
Shares issuable under convertible senior notes .............................. 52.0 52.0 52.0
Each of these instruments are excluded from the calculation of diluted net income per common share in
periods in which there is a loss, because the inclusion of potential common shares would have an anti-dilutive
effect.
In the year ended December 31, 2011, certain share based awards to employees have been excluded from
the calculation of the diluted weighted average number of shares because their exercise prices exceeded our
average share price during the calculation period.
In the year ended December 31, 2011, certain restricted stock held in escrow and certain restricted stock
units have been excluded from the calculation of the diluted weighted average number of shares because these
shares are contingently issuable based on the achievement of performance and/or market conditions that have not
been achieved as of December 31, 2011.
In the year ended December 31, 2011, the common shares issuable under our convertible notes have been
excluded from the calculation of the diluted weighted average number of shares because the effect of their
inclusion would be anti-dilutive based on the application of the if-converted method, which assumes that interest
charges applicable to the convertible notes, net of the income tax effect, are added to income (loss) for the period
and that the common shares issuable upon conversion of the convertible notes are added to the number of
weighted average shares outstanding.
Stock Option Grants
All options granted under our stock incentive plans have a ten year term and vest and become fully
exercisable within five years of continued employment. We have historically issued new shares upon exercise of
the options. For performance-based option grants, the performance objectives are based upon quantitative and
qualitative objectives, including earnings and stock price performance, amongst others. These objectives may be
absolute or relative to prior performance or to the performance of other entities, indices or benchmarks and may
be expressed in terms of progression within a specific range.
Sharesave Option Grants
All options granted under the Virgin Media Inc. Sharesave Plan enable eligible employees to purchase
shares of our common stock at a discount. Employees are invited to take out savings contracts that last for three
years. At the end of the contract, employees use the proceeds of these savings to exercise the options granted
under the plan. We intend to issue new shares upon exercise of the options.
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