Virgin Media 2011 Annual Report Download - page 50

Share of Income from Equity Investments
For the year ended December 31, 2011, share of income from equity investments was £18.6 million as
compared with income of £24.0 million for the same period in 2010. The share of income from equity
investments in the years ended December 31, 2011 and 2010 was our proportionate share of the income earned
by UKTV prior to the sale of our interest on September 30, 2011.
Loss on Disposal of Equity Investments
For the year ended December 31, 2011, the loss on disposal of equity investments was £7.2 million. The
loss related to the disposal of our share in the UKTV companies.
Loss on Derivative Instruments
The loss on derivative instruments of £50.7 million in the year ended December 31, 2011 was primarily
driven by the loss on the conversion hedges as a result of a decrease in the price of our common stock and an
increase in the amount of the counterparty credit risk adjustment used in the calculation of the fair values of the
conversion hedges, and losses on derivative instruments resulting from a fall in interest rates, partially offset by
the reclassification of gains of £31.1 million on derivative instruments previously designated as accounting
hedges from accumulated other comprehensive income to earnings in conjunction with the discontinuance of
hedge accounting on these instruments. The losses on derivative instruments of £65.6 million in the year ended
December 31, 2010 were mainly driven by the termination of swaps relating to the previous senior credit facility
refinanced in March 2010. Additionally, the loss on derivative instruments for the year ended December 31, 2010
includes a loss of £13.5 million related to our conversion hedges, which represents the difference between the
cash we paid and the fair value, as of December 31, 2010, and a loss of £5.1 million related to cross-currency
interest swaps on our U.S. dollar convertible senior notes that are not designated as hedges for accounting
purposes.
Foreign Currency Losses
For the year ended December 31, 2011, foreign currency losses were £2.4 million as compared with losses
of £34.1 million for the same period in 2010. The foreign currency losses for the year ended December 31, 2011,
were primarily due to remeasurement gains on our convertible senior notes and U.S. dollar denominated senior
notes due 2019, offset by the weakening of the pound sterling relative to the U.S. dollar. The foreign currency
losses for the year ended December 31, 2010 were primarily due to the weakening of the pound sterling relative
to the U.S. dollar and related foreign exchange gains on the principal portion of our U.S. dollar convertible senior
notes.
Interest Income and Other, Net
For the year ended December 31, 2011, interest income and other increased to £82.6 million from
£8.3 million for the year ended December 31, 2010. The increase was primarily due to the £77.6 million
recognized in the consolidated statement of operations during the second quarter following the agreement with
the U.K. tax authorities regarding the Value Added Tax, or VAT, treatment of certain of our revenue generating
activities and a related refund.
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