Virgin Media 2013 Annual Report Download - page 77

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VIRGIN MEDIA INC.
(See note 1)
Notes to Consolidated Financial Statements — (Continued)
December 31, 2013, 2012 and 2011
II - 52
(11) Related-Party Transactions
Our related-party transactions are as follows (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
Year ended
December 31,
2011
Allocated share-based compensation expense.......................... £(85.5) £ — £ — £ —
Interest expense ........................................................................ (5.8) — — —
Interest income.......................................................................... 107.0 — — —
Included in net earnings (loss)............................................. £ 15.7 £ — £ — £ —
Allocated share-based compensation expense. As further described in note 10, Liberty Global allocates share-based
compensation expense to our company.
Interest expense. Related-party interest expense relates to a related-party note with LGI in connection with the LG/VM
Transaction, which bore interest at a rate of 7.5%. During the Successor period, repayments were made on the note aggregating
£832.3 million and, as of December 31, 2013, the note was fully repaid.
Interest income. These amounts relate to related-party notes as further described below.
The following table provides details of our related-party balances (in millions):
Successor Predecessor
December 31,
2013 December 31,
2012
Receivables (a).......................................................................................................................... £ 88.1 £ —
Long-term notes receivable (b)................................................................................................. 2,373.5 —
Total..................................................................................................................................... £ 2,461.6 £ —
Other payables (c) (d)............................................................................................................... £ 87.6 £ —
______________
(a) Represents (i) employee withholding taxes collected by LGI on our behalf of £43.3 million (equivalent), (ii) accrued interest
on Virgin Media Finco Limited’s notes receivable from Lynx Europe 2 of £40.2 million (equivalent) and (iii) certain
receivables from other Liberty Global subsidiaries arising in the normal course of business. The accrued interest is payable
semi-annually on April 15 and October 15 and may be cash settled or, if mutually agreed, loan settled. The withholding
taxes and other receivables are settled periodically.
(b) Represents:
(i) notes receivable from Lynx Europe 2 that are owed to our subsidiary, Virgin Media Finco Limited. At December 31,
2013, these notes, which mature on April 15, 2023, had an aggregate principal balance of £2,297.3 million and
bore interest at a rate of 8.5%. During the fourth quarter of 2013, a portion of these notes (£947.3 million) was
redenominated from U.S. dollars to pound sterling. The net increase during the period from June 8 to December
31, 2013 primarily relates to a cash loan of £2,290.6 million (equivalent at the transaction date) and a non-cash
loan relating to deferred financing costs of £40.6 million (equivalent at the transaction date) that were paid by us
on behalf of Lynx Europe 2 and reflected as an increase to the loan balance. Lynx Europe 2 subsequently contributed
the amount related to the deferred financing costs to us. These increases were somewhat offset by declines from
foreign exchange rate movements. The cash loan funded a transaction that occurred shortly after the LG/VM