Virgin Media 2014 Annual Report Download - page 29

VIRGIN MEDIA INC.
(See note 1)
Notes to Condensed Consolidated Financial Statements — (Continued)
June 30, 2014
(unaudited)
27
(b) Represents:
(i) notes receivable from Lynx Europe 2 that are owed to Virgin Media Finco Limited. At each of June 30, 2014 and
December 31, 2013, these notes, which mature on April 15, 2023, had an aggregate principal balance of £2,297.3
million and bear interest at a rate of 8.5%;
(ii) a note receivable from LGE Holdco V BV, a subsidiary of Liberty Global, that is owed to us. At June 30, 2014,
this note, which matures on March 6, 2019 and originated this year, had a principal balance of €327.3 million
(£262.0 million) and bears interest at a rate of 5.93%;
(iii) a note receivable from Liberty Global Incorporated Limited, a subsidiary of Liberty Global, that is owed to us. At
June 30, 2014, this note, which matures on January 30, 2017 and originated this year, had a principal balance of
$189.5 million (£110.8 million) and bears interest at a rate of 3.73%;
(iv) a note receivable from Lynx Europe 2 that is owed to us. At June 30, 2014 and December 31, 2013, this note,
which matures on or before April 15, 2023, had a principal balance of $272.5 million (£159.3 million) and $107.5
million (£62.9 million), respectively. This note bears interest at a rate of 7.875%. The net increase during the six
months ended June 30, 2014 relates to cash borrowings of £98.7 million (equivalent at the transaction date) and a
decrease of £4.2 million due to the cumulative translation adjustment during the period; and
(v) a note receivable from Liberty Global. This note, which matures on June 4, 2018, had a principal balance of $18.8
million (£11.1 million) and $18.6 million (£10.9 million), respectively, and bears interest at a rate of 1.74%. The
increase during the six months ended June 30, 2014 relates to £0.2 million (equivalent at the transaction date) in
accrued interest. This note receivable originated as a result of a non-cash transaction on the date of the LG/VM
Transaction that resulted in a corresponding increase to our additional paid-in capital. This non-cash transaction
involved the transfer of shares of Old Virgin Media held in a trust to a trust consolidated by Liberty Global in
exchange for this note.
(c) Amounts represent (i) £79.4 million (equivalent) and £66.0 million (equivalent), respectively, arising from capital charges
from Liberty Global, as described in note (d) below, (ii) £16.2 million (equivalent) and £16.3 million (equivalent),
respectively, related to deferred financing costs paid by LGI on our behalf and (iii) certain payables to other Liberty Global
subsidiaries arising in the normal course of business. The payables related to the capital charges and deferred financing
costs are settled periodically. None of these payables are currently interest bearing.
(d) During the six months ended June 30, 2014 and the period from June 8 to June 30, 2013, we recorded capital charges of
$26.4 million (£15.7 million at the applicable rate) and $32.3 million (£20.8 million at the applicable rate), respectively, in
our condensed consolidated statement of equity in connection with the exercise of Liberty Global options and the vesting
of Liberty Global restricted share awards held by employees of our subsidiaries. These capital charges, which we and
Liberty Global have agreed will not exceed the cumulative amount of share-based compensation allocated to our company
by Liberty Global following the LG/VM Transaction, are based on the fair value of the underlying Liberty Global shares
on the exercise or vesting date, as applicable.