Virgin Media 2013 Annual Report Download - page 64

VIRGIN MEDIA INC.
(See note 1)
Notes to Consolidated Financial Statements — (Continued)
December 31, 2013, 2012 and 2011
II - 39
Income tax benefit (expense) attributable to our earnings (loss) from continuing operations before income taxes differs from
the amounts computed using the U.S. federal income tax rate of 35%, as a result of the following (in millions):
Successor Predecessor
Period from
June 8 to
December 31,
2013
Period from
January 1 to
June 7, 2013
Year ended
December 31,
2012 (a)
Year ended
December 31,
2011
Computed “expected” tax benefit (expense).............................. £ 101.7 £ (41.3) £ (91.5) £ (32.6)
Enacted tax law and rate changes (b)......................................... (227.1) — — —
Change in valuation allowances (c) ........................................... (28.8)(29.8) 2,675.7 78.1
Non-deductible or non-taxable interest and other expenses....... 8.9 31.9 52.8 (31.8)
Basis and other differences in the treatment of items
associated with investments in subsidiaries............................ (38.6) — (7.2)(23.4)
International rate differences (d)................................................ (13.1) 22.0 22.8 (5.7)
Other, net.................................................................................... (0.5)(0.9)(0.6)(0.6)
Total......................................................................................... £(197.5) £ (18.1) £ 2,652.0 £ (16.0)
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(a) As retrospectively revised - see note 2.
(b) During the first quarter of 2013, it was announced that the U.K. corporate income tax rate will change to 21% in April 2014
and 20% in April 2015. This change in law was enacted in July 2013, and accordingly, the amount presented for 2013
reflects the impact of these future rate changes.
(c) The 2012 amount primarily relates to the reversal of valuation allowances on certain of our U.K. deferred tax assets as these
tax assets were deemed realizable in the period. The reversal of the valuation allowance is attributable to the accumulation
of positive evidence on the realizability of these deferred tax assets, including (i) pre-tax income generated for the each of
the two years ended December 31, 2012, (ii) capital allowances and net operating losses that do not expire, (iii) improved
financial performance and (iv) our then forecasted projections of future taxable income, which, as of the fourth quarter of
2012, outweighed the negative evidence, which was primarily a history of taxable losses in periods prior to 2011.
(d) Amounts reflect statutory rates in the U.K., which are lower than the U.S. federal income tax rate.
The current and non-current components of our deferred tax assets (liabilities) are as follows (in millions):
Successor Predecessor
December 31,
2013 December 31, 2012 (a)
Current deferred tax assets (b)....................................................................................................... £ 29.1 £ 58.1
Non-current deferred tax assets..................................................................................................... 1,407.4 2,641.7
Non-current deferred tax liabilities (b).......................................................................................... (81.5) —
Net deferred tax asset................................................................................................................. £ 1,355.0 £ 2,699.8
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(a) As retrospectively revised - see note 2.
(b) Our current deferred tax assets are included in other current assets and our non-current deferred tax liabilities are included
in other long-term liabilities in our consolidated balance sheets.