Virgin Media 2011 Annual Report Download - page 79

Contractual Obligations and Commercial Commitments
The following table includes aggregate information about our contractual obligations as of December 31,
2011, and the periods in which payments are due (in millions):
Payments Due by Period (Undiscounted)
Contractual Obligations Total
Less than
1 year 1-3 years 3-5 years
More than
5 years
Long Term Debt Obligations ...................... £5,638.0 £ 0.3 £ 0.1 £2,411.8 £3,225.8
Capital Lease Obligations ......................... 480.1 91.8 116.8 30.7 240.8
Operating Lease Obligations ...................... 211.1 52.7 75.5 34.5 48.4
Purchase Obligations ............................ 1,416.5 626.7 445.0 194.5 150.3
Interest Obligations .............................. 2,205.4 372.7 745.5 607.0 480.2
Total ......................................... £9,951.1 £1,144.2 £1,382.9 £3,278.5 £4,145.5
Early Termination Charges ........................ £ 23.9 £ 5.7 £ 1.4 £ 0.5
Early termination charges are amounts that would be payable in the above periods in the event of early
termination during that period of certain of the contracts underlying the purchase obligations listed above.
The following table includes information about our commercial commitments as of December 31, 2011.
Commercial commitments are items that we could be obligated to pay in the future. They are not required to be
included in the consolidated balance sheet (in millions):
Amount of Commitment Expiration by Period
Contractual Obligations Total
Less than
1 year 1-3 years 3-5 years
More than
5 years
Guarantees .......................................... £0.0 £0.0 £0.0 £0.0 £0.0
Lines of credit ....................................... 0.0 0.0 0.0 0.0 0.0
Standby letters of credit ................................ 6.4 5.0 0.0 0.9 0.5
Standby repurchase obligations .......................... 0.0 0.0 0.0 0.0 0.0
Other commercial commitments ......................... 0.0 0.0 0.0 0.0 0.0
Total commercial commitments ......................... £6.4 £5.0 £0.0 £0.9 £0.5
Derivative Instruments and Hedging Activities
We have a number of derivative instruments with a number of counterparties to manage our exposures to
changes in interest rates and foreign currency exchange rates. We account for certain of these instruments as
accounting hedges, in accordance with the Derivatives and Hedging Topic of the FASB ASC, when the
appropriate eligibility criteria has been satisfied, and to the extent that they are effective. Ineffectiveness in our
accounting hedges, and movements in the fair value of instruments that we have not elected for hedge
accounting, are recognized through the consolidated statement of operations immediately. Effective cash flow
accounting hedges are recognized as either assets or liabilities and measured at fair value with changes in the fair
value recorded within other comprehensive income (loss). Effective fair value accounting hedges are recognized
as either assets or liabilities and measured at fair value with changes in the fair value of the derivative and
changes in the carrying value of the debt recorded in the consolidated statements of operations. The derivative
instruments consist of interest rate swaps, cross-currency interest rate swaps and foreign currency forward
contracts.
We are also subject to interest rate risks. Before taking into account the impact of current hedging arrangements,
as of December 31, 2011, we would have had interest determined on a variable basis on £750 million, or 12.8%, of our
long term debt. An increase in interest rates of 1% would increase unhedged gross interest expense by approximately
£7.5 million per year.
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