Virgin Media 2014 Annual Report Download - page 22

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VIRGIN MEDIA INC.
(See note 1)
Notes to Condensed Consolidated Financial Statements — (Continued)
June 30, 2014
(unaudited)
20
Non-cash Refinancing Transactions
During the six months ended June 30, 2014, the period from June 8 to June 30, 2013 and the period from January 1 to June
7, 2013, our refinancing transactions included non-cash borrowings and repayments of debt of £500.4 million, £750.0 million and
nil, respectively.
(7) Income Taxes
Income tax benefit (expense) attributable to our earnings (loss) before income taxes differs from the amounts computed using
the U.S. federal income tax rate of 35.0%, as a result of the following (in millions):
Three-month period Six-month period
Successor Predecessor Successor Predecessor
Three
months
ended
June 30,
2014
Period
from
June 8 to
June 30,
2013
Period from
April 1 to
June 7,
2013
Six months
ended
June 30,
2014
Period
from
June 8 to
June 30,
2013
Period from
January 1
to June 7,
2013
Computed “expected” tax benefit (expense).... £ 14.2 £ (22.7) £ 15.3 £ 48.8 £ (22.7) £ (41.3)
Change in valuation allowances....................... (20.4) (3.4)(7.8)(23.6)(3.4)(29.8)
Basis and other differences in the treatment of
items associated with investments in
subsidiaries ................................................... 3.6 (4.4) — (14.9)(4.4) —
Enacted tax law and rate changes (a) ............... 1.9 — — 6.0 — —
International rate differences (b)...................... 3.9 7.8 10.1 4.5 7.8 22.0
Non-deductible or non-taxable interest and
other expenses............................................... (3.4) 16.4 (12.6)(3.8) 16.4 31.9
Other, net.......................................................... (0.3) (0.2)(0.4)(2.4)(0.2)(0.9)
Total............................................................... £ (0.5) £ (6.5) £ 4.6 £ 14.6 £ (6.5) £ (18.1)
______________
(a) In July 2013, a law was enacted that decreased the U.K. corporate income tax rate from 23.0% to 21.0% in April 2014, with
a further decline to 20.0% scheduled for April 2015. Accordingly, amounts presented for the third quarter of 2013 and
subsequent periods reflect the estimated impact of these rate changes.
(b) Amounts reflect statutory rates in the U.K., which are lower than the U.S. federal income tax rate.
(8) Share-based Compensation
Our share-based compensation expense after the LG/VM Transaction primarily represents amounts allocated to our company
by Liberty Global. The amounts allocated by Liberty Global to our company represent share-based compensation associated with
the Liberty Global share-based incentive awards held by certain employees of our subsidiaries. Share-based compensation expense
allocated to our company by Liberty Global is reflected as an increase to shareholder’s equity and is offset by any amounts recharged
to us by Liberty Global, as further described in note 9. Share-based compensation expense prior to the LG/VM Transaction includes
amounts for options, shares and performance shares related to the common stock of Old Virgin Media. Incentive awards are
denominated in U.S. dollars.