Virgin Media 2011 Annual Report Download - page 213

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
VIRGIN MEDIA INVESTMENTS LIMITED AND SUBSIDIARIES
COMBINED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 12—Related Party Transactions
Virgin Media Inc. and its consolidated subsidiaries
We are wholly owned subsidiaries 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, 2011
2011 2010 2009
Operating costs ..................................................... £44.6 £39.8 £45.4
Selling, general and administrative expenses .............................. 35.4 44.8 45.1
£80.0 £84.6 £90.5
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 the common stock of Virgin Media Inc. as a result of its acquisition of
Virgin Mobile on July 4, 2006. As of December 31, 2011, Virgin Entertainment Investment Holdings Limited
beneficially owned 2.3% of the common stock of Virgin Media Inc. (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 the Board of Directors of Virgin Media Inc. and is a Director of 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
business 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, telephone and mobile phone services we provide to our residential customers, as well
as the acquisition and branding of sports, movies and other premium television content and the sale of certain
communications equipment, such as set top boxes and cable modems. Our license agreement provides for an
annual royalty of 0.25% of certain consumer revenues, subject to a minimum annual royalty of £8.5 million. As
part of the agreement, we have the right to adopt, and have adopted, a company name for our parent, Virgin
Media Inc., over which together with the name “Virgin Media”, we retain worldwide exclusivity. Under a related
agreement, Virgin Enterprises Limited has the right to propose a candidate to fill a seat on Virgin Media Inc.’s
Board of Directors. Pursuant to this right, Virgin Enterprises Limited proposed Gordon McCallum who was
appointed to Virgin Media Inc.’s Board of Directors.
During the first quarter of 2010, ntl:Telewest Business announced that it would rebrand using the Virgin
trade marks to “Virgin Media Business”. Virgin Media has entered into a trade mark license with Virgin
Enterprises Ltd under which an annual royalty is payable of 0.25% of revenues from our business division,
subject to a minimum payment of £1.5 million.
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