Virgin Media 2011 Annual Report Download - page 30

informing us. Our ability to introduce new products and services may also be affected if we cannot predict how
existing or future laws, regulations or policies would apply to such products or services. In addition, our business
and the industry in which we operate are subject to investigation by regulators, which could lead to enforcement
actions, fines and penalties or the assertion of private litigation claims and damages. Any such action could harm
our reputation and result in increased costs to the business.
We may experience difficulties in providing our services efficiently to our customers whilst the London 2012
Olympic Games are taking place which may in turn have a material adverse effect on our reputation and
ability to retain our customers
Throughout the period July 27, 2012 to August 12, 2012 London will be hosting the 2012 Olympic Games.
Certain network and information systems may be affected by a significant increase in usage of our services
which could result in outages or our failure to adequately service our customers. An increase in the use of mobile
telephony in any particular area (for example, at the Olympic sites) could cause networks to become congested
and may cause disruption to the service we provide. We may also experience a significant increase in broadband
users simultaneously streaming videos across the network. This could have a negative effect on the speed and
hence the customer experience of our broadband service. Our access to street cabinets and customer sites,
especially in areas surrounding Olympic sites and in central London, for the purpose of installations, repairs and
maintenance, will be affected by the Olympic Games (and the Paralympic Games which follow the Olympic
Games). We have already been notified that we may not be able to undertake planned excavation works in many
parts of London, not only during the Olympics and Paralympics but also for several weeks in advance due to
security and other restrictions. All of the above could adversely affect our reputation, result in a loss of customers
and could also have a material adverse effect on our business and results of operations.
Risks Relating to Our Financial Indebtedness and Structure
We have substantial indebtedness which may have a material adverse effect on our available cash flow, our
ability to obtain additional financing if necessary in the future, our flexibility in reacting to competitive and
technological changes and our operations.
We have a substantial amount of indebtedness. Our consolidated total long term debt, net of £77 million
current portion, was £5,779 million as of December 31, 2011.
Our ability to pay principal and interest on or to refinance the outstanding indebtedness depends upon our
operating performance, which will be affected by, among other things, general economic, financial, competitive,
regulatory and other factors, some of which are beyond our control. Moreover, we may not be able to refinance
or redeem such debt on commercially reasonable terms, on terms acceptable to us, or at all.
The level of our indebtedness could have important consequences, including the following:
• a substantial portion of our cash flow from operations will have to be dedicated to the payment of
interest and principal on existing indebtedness, thereby reducing the funds available for other purposes;
• our ability to obtain additional financing in the future for working capital, capital expenditures, product
development, acquisitions or general corporate purposes may be impaired;
• our flexibility in planning for, or reacting to, changes in our business, the competitive environment and
the industry in which we operate, and to technological and other changes may be limited;
• we may be placed at a competitive disadvantage as compared to our competitors that are not as highly
leveraged;
• our substantial degree of leverage could make us more vulnerable in the event of a downturn in general
economic conditions or adverse developments in our business; and
• we are exposed to risks inherent in interest rate and foreign exchange rate fluctuations.
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