Virgin Media 2012 Annual Report Download - page 7

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TiVo Television Service
Our TiVo service was launched in December 2010 with mass distribution commencing in mid-2011. This “next
generation” entertainment set-top box is available in both 1 TB and 500 GB sizes and brings together television, VOD
and web video services through a single set-top box and features unique content discovery and personalization tools.
In April 2012, we introduced "Collections", our new packages, which include the TiVo digital video recorder, or TiVo,
High Definition, or HD, TV and superfast broadband as standard for new customers.
The continued appeal of our TiVo service has driven strong customer growth during 2012. We had 1.3 million TiVo
subscribers at December 31, 2012, or 35% of our television customer base. During 2012 we have enhanced our TiVo
television service with the introduction of Virgin TV Anywhere, TiVo to TiVo streaming and the relaunch of our on-
demand pay-per-view service as Virgin Movies.
Financing & Long Term Debt
During 2012, we have used our strong cash position to access advantageous markets and refinance our debt, reducing
interest expense and extending debt maturities. Since announcing our first phase capital optimization program on
July 27, 2010, we have refinanced a total of £2.2 billion of debt. The principal transactions during 2012 were:
• On March 13, 2012, we issued U.S. dollar denominated 5.25% senior notes due February 15, 2022 with a principal
value of $500 million, the net proceeds of which together with cash on our balance sheet were used on March 28,
2012 to redeem $500 million of the principal amount of our $1,350 million 9.50% senior notes due 2016. We
recognized a loss on extinguishment of debt of £58.6 million as a result of this redemption.
• On October 30, 2012, we issued $900 million aggregate principal amount of 4.875% senior notes and £400 million
aggregate principal amount of 5.125% senior notes due October 30, 2022 at par, the net proceeds of which were
used to redeem our remaining $850 million and €180 million 9.50% senior notes due 2016, and $92.9 million of
the principal amount of our $600 million 8.375% senior notes due 2019 and £96.5 million of the principal amount
of our £350 million 8.875% senior notes due 2019. We recognized a loss on extinguishment of debt of £129.2
million as a result of these redemptions.
On December 14, 2012 we also announced our intention to use up to £200 million for further transactions related to
our debt and convertible debt, which may be effected through open market, privately negotiated, and/or derivative
transactions until the end of 2014.
For more information about our senior notes, senior secured notes and the senior credit facility, see Item 7 of this
annual report on Form 10-K, “Management's Discussion and Analysis of Results of Operations and Financial Condition
- Liquidity and Capital Resources - Long Term Debt.”
Capital Return Programs
Since we began our capital return program in July 2010, we have repurchased 73 million shares of common stock for
£1,127 million, which is approximately 22% of our share count at July 2010. We purchased 52.5 million shares during
the first and second phases of our program in 2011 and 2010 at an average purchase price of $24.35. The second
phase of our program announced on July 27, 2011 continued during 2012 with the purchase and cancellation of a
further 20.5 million shares during the year at an average purchase price of $25.39. With the near completion of our
second phase program, we announced on December 14, 2012, a third phase to our share buyback program of at least
£1,122.5 million to be completed before the end of 2014, which includes £122.5 million remaining under our second
phase program. This £1,122.5 million represents approximately 19% of our market capitalization at December 14,
2012.
Under the terms of the merger agreement we signed with Liberty Global on February 5, 2013, we have suspended
our capital returns program pending consummation of the merger. Should the merger not be consummated we intend
to resume our capital returns program.
For more information on our capital return programs, see Item 7 of this Form 10-K, “Management's Discussion and
Analysis of Results of Operations and Financial Condition - Liquidity and Capital Resources - Capital Return Programs.”
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