Virgin Media 2011 Annual Report Download - page 39

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview
The following discussion should be read in conjunction with our financial statements and notes thereto
included in this report.
We are a leading entertainment and communications business, being a “quad-play” provider of broadband
internet, television, mobile telephony and fixed line telephony services that offer a variety of entertainment and
communications services to residential and commercial customers throughout the U.K. Based on customer
numbers, we are one of the U.K.’s largest providers of residential broadband internet, pay television and fixed
line telephony services. We believe our advanced, deep fiber access network enables us to offer faster and higher
quality broadband services than our digital subscriber line, or DSL, competitors. As a result, we provide our
customers with a leading next generation broadband service and one of the most advanced TV on-demand
services available in the U.K. market. As of December 31, 2011, we provided service to approximately
4.8 million residential cable customers on our network. We are also one of the U.K.’s largest mobile virtual
network operators by number of customers, providing mobile telephony service to approximately 1.5 million
contract mobile customers and approximately 1.5 million prepay mobile customers over third party networks.
In addition, we provide a complete portfolio of voice, data and internet solutions to leading businesses,
public sector organizations and service providers in the U.K. through Virgin Media Business (formerly
ntl:Telewest Business).
Our reporting segments are determined based on our method of internal reporting along with the criteria
used by our chief executive officer, who is our chief operating decision maker (CODM), to evaluate segment
performance, the availability of separate financial information and overall materiality considerations. We have
two reporting segments, Consumer and Business, as described below:
•Consumer (84.0% of our 2011 revenue): Our Consumer segment includes the distribution of
television programming over our cable network and the provision of broadband and fixed line
telephone services to residential consumers, both on and off our cable network. Our Consumer segment
also includes our mobile telephony and mobile broadband operations, provided over third party mobile
networks.
•Business (16.0% of our 2011 revenue): Our Business segment includes the voice and data
telecommunication and internet solutions services we provide through our cable network and third
party networks to businesses, public sector organizations and service providers.
For further discussion of our business, please refer to Item 1 of this document.
Financing
On February 15, 2011, we further amended our senior credit facility to increase our operational flexibility.
On May 20, 2011, we entered into two new additional facilities under the senior credit facility, including an
additional revolving facility with commitments of £450 million which replaced the then existing £250 million
revolving facility and an additional term facility with commitments of £750 million which was used to prepay in
full Tranches A and B under the then existing senior credit facility. Further amendments to increase operational
flexibility were also effected on May 27, 2011. The maturity date of the facilities remains at June 30, 2015. For
more information about our Senior Credit Facility, see “Management’s Discussion and Analysis of Results of
Operations and Financial Condition—Liquidity and Capital Resources—Senior Credit Facility.”
On March 3, 2011, our wholly owned subsidiary, Virgin Media Secured Finance PLC, issued $500 million
aggregate principal amount of 5.25% senior secured notes due 2021 and £650 million aggregate principal amount
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