Virgin Media 2011 Annual Report Download - page 143

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 15—Shareholders’ Equity (continued)
Capital structure optimization
On July 28, 2010, we announced our intention to undertake a range of capital structure optimization actions,
including the application of, in aggregate, up to £700 million, in part towards repurchases of up to £375 million
of our common stock until August 2011, and in part towards transactions relating to our debt and convertible
debt, including related derivative transactions. During the first quarter of 2011, we increased the 2010 capital
structure optimization program to permit full redemption of the $550 million 9.125% senior notes due 2016,
which occurred on July 26, 2011. See note 7 for a discussion of the conversion hedges related to our convertible
senior notes, which were entered into as part of the 2010 capital structure optimization program.
On July 27, 2011, we announced a new capital structure optimization program which includes the application of,
in aggregate, up to £850 million for purposes of repurchasing our common stock and debt and for effecting associated
derivative transactions until December 31, 2012. Our new capital structure optimization program consists of the
application of up to £625 million in repurchases of our common stock and up to £225 million for transactions relating
to our debt and convertible debt, including related derivative transactions. Our capital structure optimization programs
may be effected through open market, privately negotiated, and/or derivative transactions, and may be implemented
through arrangements with one or more brokers. Any shares of common stock acquired in connection with these
programs will be held in treasury or cancelled. In addition on October 27, 2011, we announced our intention to expend
up to a further £250 million on share repurchases from the proceeds from the sale of our UKTV joint venture
companies to a subsidiary of Scripps Networks Interactive, Inc. As at December 31, 2011, the remaining amount
authorized under the share repurchase programs was £452.7 million.
During the year ended December 31, 2011, we repurchased approximately 40.9 million shares of common
stock at an average purchase price per share of $25.03 ($1,022.5 million in aggregate), of which approximately
17.1 million shares were repurchased through open market repurchases at an average purchase price per share of
$27.64 ($472.5 million in aggregate) and approximately 23.8 million shares were repurchased through capped
accelerated stock repurchase programs at an average purchase price per share of $23.15 ($550 million in
aggregate). Approximately 12.0 million shares of common stock were repurchased through open market
repurchases under the 2010 capital structure optimization program at an average purchase price per share of
$28.83 ($345.5 million in aggregate), and approximately 28.9 million shares of common stock were repurchased
under the 2011 capital structure optimization program consisting of approximately 5.1 million shares under open
market repurchases at an average purchase price per share of $24.86 ($127.0 million in aggregate) and
approximately 23.8 million shares under capped accelerated stock repurchase programs at an average purchase
price per share of $23.15 ($550 million in aggregate). The capped accelerated stock repurchase programs under
the 2011 capital structure optimization program were completed by entering into an agreement with a
counterparty on September 8, 2011 to effect a $250.0 million (£156.6 million) capped accelerated stock
repurchase program under which we received approximately 10.1 million shares of our common stock at an
average purchase price per share of $24.71, and by entering into another agreement with the same counterparty
on November 10, 2011 to effect a further $300.0 million (£188.0 million) capped accelerated stock repurchase
program under which we received approximately 13.6 million shares of our common stock at an average
purchase price per share of $21.99. The shares of common stock acquired in connection with both the 2010 and
2011 capital structure optimization programs were cancelled.
During the year ended December 31, 2010, we repurchased 11.6 million shares of common stock in
connection with the 2010 capital structure optimization program, at an average purchase price per share of
$21.98 ($255.7 million in aggregate) through an accelerated stock repurchase program and open market
repurchases. The shares of common stock acquired in connection with the 2010 capital structure optimization
program were cancelled.
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