Virgin Media 2013 Annual Report Download - page 37

VIRGIN MEDIA INC.
(see note 1)
Notes to Consolidated Financial Statements
December 31, 2013, 2012 and 2011
II - 12
(1) Basis of Presentation
General
Virgin Media Inc. (Virgin Media) is a provider of digital cable, broadband internet, fixed-line telephony and mobile services
in the United Kingdom (U.K.) to both residential and business-to-business (B2B) customers. Virgin Media became a wholly-
owned subsidiary of Liberty Global plc (Liberty Global) as a result of a series of mergers that were completed on June 7, 2013
(the LG/VM Transaction), pursuant to which Liberty Global became the publicly-held parent company of the successors by merger
of the predecessor to Virgin Media (Old Virgin Media) and Liberty Global, Inc. (LGI) (the predecessor to Liberty Global), as
further described in note 3. In these notes, the terms “we,” “our,” “our company,” and “us” may refer, as the context requires, to
Virgin Media (or Old Virgin Media) or collectively to Virgin Media (or Old Virgin Media) and its subsidiaries.
As a result of Liberty Global’s push-down of its investment basis in Virgin Media arising from the LG/VM Transaction, a
new basis of accounting was created on June 7, 2013. In these consolidated financial statements, the results of operations and
cash flows of Old Virgin Media for the periods ended on or prior to June 7, 2013 and the financial position of Old Virgin Media
as of balance sheet dates prior to June 7, 2013 are referred to herein as “Predecessor” consolidated financial information and the
results of operations and cash flows of Virgin Media for periods beginning on June 8, 2013 and the financial position of Virgin
Media as of June 7, 2013 and subsequent balance sheet dates are referred to herein as “Successor” consolidated financial information.
The Predecessor and Successor consolidated financial information presented herein is not comparable primarily due to the
fact that the Successor consolidated financial information reflects:
• the application of acquisition accounting as of June 7, 2013, as further described in note 3, of which the most significant
implications are (i) increased depreciation expense, (ii) increased amortization expense and (iii) increased share-
based compensation expense;
• conforming accounting policy changes, primarily to align to Liberty Global’s accounting policy for the recognition
of installation fees received on B2B contracts, as further described below; and
• additional interest expense associated with debt financing arrangements entered into in connection with the LG/VM
Transaction and subsequently pushed down to our balance sheet, as further described in note 7.
On July 12, 2010, we completed the sale of our television channel business known as Virgin Media TV. Virgin Media TV’s
operations comprised our former Content segment. These consolidated financial statements reflect Virgin Media TV as a
discontinued operation.
On January 26, 2014, Liberty Global’s board of directors approved a share dividend (the 2014 Share Dividend) of one Liberty
Global Class C ordinary share for each outstanding Class A, Class B and Class C ordinary share as of the February 14, 2014 record
date for the share dividend. The 2014 Share Dividend was distributed on March 3, 2014. The Liberty Global share and share-
based numbers included in this report have not been adjusted to give effect to the 2014 Share Dividend.
Unless otherwise indicated, convenience translations into pound sterling are calculated as of December 31, 2013.
These consolidated financial statements reflect our consideration of the accounting and disclosure implications of subsequent
events through March 12, 2014, the date of issuance.