UNITED STATES ~~SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549~~

~~FORM~~SECURITIES ~~10-Q~~ AND EXCHANGE COMMISSION

ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2009
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Washington, D.C. 20549

_____________________

Form 10-Q

________________________



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2012



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 000-50886

~~VIRGIN MEDIA~~ ~~INC. (Exact name of registrant as specified in its charter)~~ ________________________

VIRGIN MEDIA ~~INVESTMENT HOLDINGS LIMITED (Additional Registrant)~~ INC.

Delaware (State or other jurisdiction of incorporation or organization)		59-3778247 (I.R.S. Employer Identification No.)
909 Third Avenue, Suite 2863 New York, New York (Address of principal executive offices)		10022 (Zip Code)

(Exact name of registrant as specified in its charter)

~~(212)~~ ~~906-8440 (Registrant's telephone number, including area code)~~ ________________________

~~Indicate by check mark whether the registrant (1)~~VIRGIN ~~has filed all reports required to be filed by Section~~MEDIA ~~13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12~~INVESTMENT ~~months (or for such shorter period that the registrant was required to file such reports), and (2)~~HOLDINGS ~~has been subject to such filing requirements for the past 90 days. Yes ý No o~~ LIMITED

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (~~§232.405~~Additional ~~of this chapter~~Registrant) ~~during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o~~

~~Indicate~~VIRGIN byMEDIA ~~check~~INVESTMENTS mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one): LIMITED

~~Large accelerated filer ý Accelerated filer o Non-accelerated filer o~~ (DoAdditional ~~not check if a smaller reporting company~~Registrant) ~~Smaller reporting company o~~

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý



Delaware		59-3778247
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

65 Bleecker Street, 6th Floor, New York, NY		10012
(Address of principal executive offices)		(Zip Code)

~~As of May~~(212) ~~1, 2009, there were 328,893,059 shares of the registrant's common stock, par value $0.01 per share, issued and outstanding, excluding 244,025 unvested shares of restricted stock held in escrow.~~ 906-8440

~~The Additional~~ (Registrant’s ~~meets~~telephone ~~the~~number, ~~conditions~~including ~~set~~area ~~forth in General Instruction H(1~~code)~~(a) and (b) of Form 10-Q and is therefore filing this report with the reduced disclosure format. See "Note Concerning Virgin Media Investment Holdings Limited" in this Form 10-Q.~~

________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

As of October 29, 2012, there were 268,425,983 shares of the registrant’s common stock, par value $0.01 per share, issued and outstanding.

The Additional Registrants meet the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing this report with the reduced disclosure format. See “Note Concerning Virgin Media Investment Holdings Limited and Virgin Media Investments Limited” in this Form 10-Q.

Table of Contents

VIRGIN MEDIA INC. ~~FORM 10-Q QUARTER ENDED MARCH 31, 2009 INDEX~~

		Page
PART I. FINANCIAL INFORMATION		5
Item 1. Financial Statements		5
Virgin Media Inc.
	Condensed Consolidated Balance Sheets—March 31, 2009 and December 31, 2008	5
	Condensed Consolidated Statements of Operations—Three months ended March 31, 2009 and 2008	6
	Condensed Consolidated Statements of Cash Flows—Three months ended March 31, 2009 and 2008	7
	Notes to Condensed Consolidated Financial Statements	8
Virgin Media Investment Holdings Limited
	Condensed Consolidated Balance Sheets—March 31, 2009 and December 31, 2008	28
	Condensed Consolidated Statements of Operations—Three months ended March 31, 2009 and 2008	29
	Condensed Consolidated Statements of Cash Flows—Three months ended March 31, 2009 and 2008	30
	Notes to Condensed Consolidated Financial Statements	31
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		45
Item 3. Quantitative and Qualitative Disclosures about Market Risk		63
Item 4. Controls and Procedures		63
PART II. OTHER INFORMATION		64
Item 1. Legal Proceedings		64
Item 1A. Risk Factors		64
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		64
Item 3. Defaults Upon Senior Securities		64
Item 4. Submission of Matters to a Vote of Security Holders		64
Item 5. Other Information		64
Item 6. Exhibits		65
SIGNATURES		66

FORM 10-Q

QUARTER ENDED September 30, 2012

INDEX



	Page
PART I—FINANCIAL INFORMATION	5
Item 1. Financial Statements	5
Virgin Media Inc.
Condensed Consolidated Balance Sheets—September 30, 2012 and December 31, 2011	5
Condensed Consolidated Statements of Comprehensive Income —Three and Nine Months ended September 30, 2012 and 2011	6
Condensed Consolidated Statements of Cash Flows—Nine Months ended September 30, 2012 and 2011	7
Notes to Condensed Consolidated Financial Statements	8
Virgin Media Investment Holdings Limited
Condensed Consolidated Balance Sheets—September 30, 2012 and December 31, 2011	41
Condensed Consolidated Statements of Comprehensive Income — Three and Nine Months ended September 30, 2012 and 2011	42
Condensed Consolidated Statements of Cash Flows— Nine Months ended September 30, 2012 and 2011	43
Virgin Media Investments Limited
Condensed Consolidated Balance Sheets— September 30, 2012 and December 31, 2011	44
Condensed Consolidated Statements of Comprehensive Income — Three and Nine Months ended September 30, 2012 and 2011	45
Condensed Consolidated Statements of Cash Flows— Nine Months ended September 30, 2012 and 2011	46
Virgin Media Investment Holdings Limited and Virgin Media Investments Limited
Combined Notes to Condensed Consolidated Financial Statements	47
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	59
Item 3. Quantitative and Qualitative Disclosures about Market Risk	77
Item 4. Controls and Procedures	79
PART II—OTHER INFORMATION	80
Item 1. Legal Proceedings	80
Item 1A. Risk Factors	80
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	81
Item 3. Defaults Upon Senior Securities	81
Item 4. Mine Safety Disclosures	81
Item 5. Other Information	81
Item 6. Exhibits	82
SIGNATURES	83

In this quarterly report on Form 10-Q, unless we have indicated otherwise, or the context otherwise requires, references to “Virgin Media,” “the Company,” “we,” “us,” “our” and similar terms refer to the consolidated business of Virgin Media Inc. and its subsidiaries (including Virgin Media Investment Holdings Limited, or VMIH, Virgin Media Investments Limited, or VMIL, and their respective subsidiaries).

Table of Contents

“Safe ~~Introductory~~Harbor” ~~Note~~ Statement under the Private Securities Litigation Reform Act of 1995

InVarious ~~this~~statements ~~quarterly~~contained ~~report~~in onthis ~~Form 10~~document constitute “forward-Q,looking ~~unless~~statements” weas ~~have~~that ~~indicated~~term ~~otherwise,~~is ordefined under the ~~context~~Private ~~otherwise~~Securities ~~requires~~Litigation Reform Act of 1995. Words like “believe, ~~references~~” to“anticipate,” ~~"Virgin~~“should,” ~~Media~~“intend,"” ~~"the~~“plan,” ~~Company~~“will,"” ~~"we~~“expects,"” ~~"us~~“estimates,"” ~~"our"~~“projects,” “positioned,” “think,” “strategy,” and similar ~~terms~~expressions ~~refer~~identify tothese ~~the~~forward-looking ~~consolidated~~statements, ~~business~~which ofinvolve ~~Virgin~~known ~~Media Inc.~~and unknown risks, uncertainties and ~~its~~other ~~subsidiaries~~factors ~~(including~~that ~~Virgin~~may ~~Media~~cause ~~Investment Holdings~~our ~~Limited~~actual results, performance or ~~VMIH,~~achievements ~~and~~or ~~its~~industry ~~subsidiaries~~results ~~and~~to ~~Virgin~~be ~~Mobile~~materially ~~Holdings~~different ~~(UK)~~from ~~Limited~~those contemplated, projected, forecasted, estimated or ~~Virgin~~budgeted, ~~Mobile~~whether expressed or implied, ~~and~~by ~~its~~these ~~subsidiaries)~~forward-looking statements. These factors, among others, include the following:

• ~~"Safe~~We ~~Harbor"~~operate ~~Statement~~in ~~under~~highly ~~the~~competitive ~~Private~~markets ~~Securities~~which ~~Litigation~~may ~~Reform~~lead ~~Act~~to a decrease in our revenue, increased costs, customer churn or a reduction in the rate of ~~1995:~~ customer acquisition;

~~Various~~• ~~statements~~The ~~contained~~sectors in ~~this~~which ~~document~~we ~~constitute~~compete ~~"forward-looking~~are ~~statements"~~subject asto ~~that~~rapid term is defined under the Private Securities Litigation Reform Act of 1995. Words like "believe," "anticipate," "should," "intend," "plan," "will," "expect," "estimate," "project," "positioned," "strategy," and ~~similar~~significant ~~expressions identify~~changes ~~these~~in ~~forward-looking statements~~technology, ~~which involve known~~ and ~~unknown~~the ~~risks,~~effect ~~uncertainties~~of ~~and~~technological ~~other~~changes ~~factors~~on ~~that may cause~~ our ~~actual~~businesses ~~results, performance~~cannot ~~or achievements or industry results to~~ be ~~materially different from those contemplated, projected, forecasted, estimated or budgeted, whether expressed or implied, by these forward-looking statements. These factors, among others, include:~~ predicted;

~~These and~~• ~~other~~Our ~~factors~~fixed ~~are~~line ~~discussed~~telephony inrevenue ~~more~~is ~~detail~~declining ~~under "Risk Factors"~~ and ~~elsewhere~~unlikely ~~in our annual report on Form 10-K for the year ended December 31, 2008, as filed with the Securities and Exchange Commission, or SEC, on February 26, 2009. We assume no obligation~~ to ~~update our forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting these statements.~~ improve;


•	A failure in our network and information systems could significantly disrupt our operations, which could have a material adverse effect on those operations, our business, our results of operations and financial conditions;


•	Unauthorized access to our network resulting in piracy could result in a loss of revenue


•	We rely on third-party suppliers and contractors to provide necessary hardware, software or operational support and are sometimes reliant on them in a way which could economically disadvantage us;


•	The “Virgin” brand is not under our control and the activities of the Virgin Group and other licensees could have a material adverse effect on the goodwill of customers towards us as a licensee;


•	Our inability to provide popular programming or to obtain it at a reasonable cost could potentially have a material adverse effect of the number of customers or reduce margins;


•	Adverse economic developments could reduce customer spending for our TV, broadband, and telephony services and could therefore have a material adverse effect on our revenue;


•	We are subject to currency and interest rate risks;


•	We are subject to tax in more than one tax jurisdiction and our structure poses various tax risks;


•	Virgin Mobile relies on Everything Everywhere's network to carry its communications traffic;


•	We do not insure the underground portion of our cable network and various pavement-based electronics associated with our cable network;


•	We are subject to significant regulation, and changes in the U.K. and EU laws, regulations or governmental policy affecting the conduct of our business may have a material adverse effect on our ability to set prices, enter new markets or control our costs;


•	We have substantial indebtedness which may have a material adverse effect on our available cash flow, our ability to obtain additional financing if necessary in the future, our flexibility in reacting to competitive and technological changes and our operations;


•	We may not be able to fund our debt service obligation in future; and


•	The covenants under our debt agreements place certain limitations on our ability to finance future operations and how we manage our business

These and other factors are discussed in more detail under “Risk Factors” and elsewhere in our annual report on Form 10-K for the year ended December 31, 2011, or the 2011 Annual Report, as filed with the U.S. Securities and Exchange Commission, or SEC, on February 21, 2012. We assume no obligation to update our forward-looking statements to reflect actual results, changes in assumptions or changes in factors affecting these statements.

Note Concerning Virgin Media Investment Holdings Limited and Virgin Media Investments Limited

VMIH is a company incorporated in England and Wales, with its registered office at Media House, Bartley Wood Business Park, Bartley Way, Hook, Hampshire, RG27 9UP, England. VMIH is a wholly-owned subsidiary of Virgin Media Finance PLC, or Virgin Media Finance, and a wholly-owned indirect subsidiary of Virgin Media. VMIH is not an accelerated filer. VMIH is one of the guarantors of the unsecured senior notes issued by Virgin Media Finance. VMIH's guarantees of these notes are not deemed to be unconditional. Separate condensed financial statements for VMIH have been included in this quarterly report on Form 10-Q pursuant to the rules and regulations of the SEC. VMIH is also one of the guarantors of the senior secured notes issued by Virgin Media Secured Finance PLC, or Virgin Media Secured Finance. VMIH carries on the same business as Virgin Media, and is the principal borrower under Virgin Media's senior credit facility.

Table of Contents

VMIL ~~Note~~was ~~Concerning~~formed on December 18, 2009, as a wholly-owned subsidiary of VMIH. On December 30, 2009, VMIL acceded as a senior subordinated guarantor of the unsecured senior notes issued by Virgin Media ~~Investment~~Finance, ~~Holdings~~on ~~Limited~~ the same terms as VMIH. As VMIL's guarantees are not deemed to be unconditional, separate condensed financial statements for VMIL have been included in this quarterly report on Form 10-Q pursuant to the rules and regulations of the SEC. VMIL is also one of the guarantors of the senior secured notes issued by Virgin Media Secured Finance.

~~This~~Unless ~~quarterly~~otherwise ~~report~~indicated, onthe ~~Form 10-Q~~discussion ~~(excepting~~contained ~~separate~~in ~~financial~~this ~~statements~~report ~~responsive~~applies to ~~Part I, Item 1) covers both Virgin Media and~~ VMIH, ~~a company incorporated in England~~ and ~~Wales~~VMIL ~~with~~as ~~its~~well ~~address~~as ~~at 160 Great Portland Street, London W1W 5QA, United Kingdom, which is a wholly owned subsidiary of~~ Virgin Media ~~Finance PLC and a wholly owned indirect subsidiary of Virgin Media Inc~~. VMIH is not an accelerated filer. VMIH is one of the guarantors of Virgin Media Finance PLC's 9.75% senior notes due 2014 (sterling denominated), 8.75% senior notes due 2014 (euro denominated), 8.75% senior notes due 2014 (U.S. dollar denominated), and 9.125% senior notes due 2016 (U.S. dollar denominated). VMIH's guarantee of those notes is not deemed to be unconditional.

~~VMIH carries~~Financial onInformation ~~the same business as Virgin Media,~~ and isCurrency ~~the~~of ~~principal~~Financial ~~borrower under Virgin Media's senior credit facility.~~ Statements

All ~~Note~~of ~~Concerning~~the ~~Financial~~financial ~~Information~~statements ~~and~~included ~~Currency~~in this quarterly report have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The reporting currency of ~~Financial~~our ~~Statements~~ consolidated financial statements is U.K. pounds sterling.

All of the financial statements included in this quarterly report have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The reporting currency of our consolidated financial statements is U.K. pounds sterling.

Table of Contents

PART I—FINANCIAL INFORMATION


ITEM 1.	FINANCIAL STATEMENTS

VIRGIN MEDIA INC. ~~CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in millions, except per share data)~~

					December 31, 2008
					(Adjusted)
Assets
	Current assets
	Cash and cash equivalents		£139.6			£181.6
	Restricted cash		6.0			6.1
	Accounts receivable—trade, less allowances for doubtful accounts of £17.0 (2009) and £16.5 (2008)		449.0			454.3
	Inventory		106.0			81.1
	Derivative financial instruments		167.1			168.4
	Prepaid expenses and other current assets		89.4			107.8
	Current assets held for sale		15.8			56.2
		Total current assets	972.9			1,055.5
Fixed assets, net			5,270.1			5,342.1
Goodwill and other indefinite-lived assets			2,082.3			2,082.3
Intangible assets, net			449.2			510.3
Equity investments			357.2			353.5
Derivative financial instruments			401.6			435.7
Other assets, net of accumulated amortization of £88.2 (2009) and £79.1 (2008)			144.2			153.9
Total assets			£9,677.5			£9,933.3
Liabilities and shareholders' equity
Current liabilities
	Accounts payable		£332.6			£370.5
	Accrued expenses and other current liabilities		422.0			449.9
	Derivative financial instruments		92.3			84.4
	VAT and employee taxes payable		72.8			63.5
	Restructuring liabilities		63.9			71.0
	Interest payable		97.6			131.6
	Deferred revenue		270.2			268.0
	Current portion of long term debt		257.7			40.5
	Current liabilities held for sale		26.5			36.2
		Total current liabilities	1,635.6			1,515.6
Long term debt, net of current portion			5,922.3			6,129.6
Derivative financial instruments			50.7			42.6
Deferred revenue and other long term liabilities			151.5			150.1
Deferred income taxes			80.7			79.2
Total liabilities			7,840.8			7,917.1
Commitments and contingent liabilities
Shareholders' equity
	Common stock—$0.01 par value; authorized 1,000.0 (2009 and 2008) shares; issued 329.1 (2009) and 329.0 (2008) and outstanding 328.4 (2009) and 328.1 (2008) shares		1.8			1.8
	Additional paid-in capital		4,465.8			4,461.3
	Accumulated other comprehensive income		157.2			178.2
	Accumulated deficit		(2,788.1	)		(2,625.1	)
		Total shareholders' equity	1,836.7			2,016.2
Total liabilities and shareholders' equity			£9,677.5			£9,933.3

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except par value)



	September 30, 2012			December 31, 2011
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	£	113.4		£	300.4
Restricted cash	1.9			1.9
Accounts receivable - trade, less allowances for doubtful accounts of £8.8 (2012) and £10.9 (2011)	456.8			435.4
Derivative financial instruments	10.5			9.5
Prepaid expenses and other current assets	97.1			97.0
Total current assets	679.7			844.2
Fixed assets, net	4,546.5			4,602.7
Goodwill and other indefinite-lived assets	2,017.5			2,017.5
Derivative financial instruments	385.4			347.9
Deferred financing costs, net of accumulated amortization of £58.0 (2012) and £44.0 (2011)	64.7			75.7
Other assets	52.2			50.8
Total assets	£	7,746.0		£	7,938.8
Liabilities and shareholders’ equity
Current liabilities
Accounts payable	£	333.7		£	304.4
Accrued expenses and other current liabilities	340.5			373.1
Derivative financial instruments	7.8			16.7
VAT and employee taxes payable	86.1			88.4
Interest payable	103.2			106.8
Deferred revenue	310.1			311.8
Current portion of long term debt	81.3			76.6
Total current liabilities	1,262.7			1,277.8
Long term debt, net of current portion	5,711.3			5,778.5
Derivative financial instruments	106.9			53.6
Deferred revenue and other long term liabilities	169.1			190.0
Total liabilities	7,250.0			7,299.9
Commitments and contingent liabilities
Shareholders’ equity
Common stock - $0.01 par value; authorized 1,000.0 (2012 and 2011) shares; issued and outstanding 268.4 (2012) and 286.7 (2011) shares	1.4			1.6
Additional paid-in capital	3,618.7			3,866.6
Accumulated other comprehensive income	23.2			30.0
Accumulated deficit	(3,147.3		)	(3,259.3		)
Total shareholders’ equity	496.0			638.9
Total liabilities and shareholders’ equity	£	7,746.0		£	7,938.8

See accompanying notes.

Table of Contents

VIRGIN MEDIA INC. ~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in millions, except per share data)~~

			Three months ended March 31,
			2009			2008
						(Adjusted)
Revenue				£935.7			£947.3
Costs and expenses
	Operating costs (exclusive of depreciation shown separately below)			413.7			420.0
	Selling, general and administrative expenses			209.7			203.8
	Restructuring and other charges			5.4			4.6
	Depreciation			232.7			230.9
	Amortization			61.2			89.9
				922.7			949.2
Operating income (loss)				13.0			(1.9	)
Other income (expense)
	Interest income and other, net			3.3			5.9
	Interest expense			(109.0	)		(123.3	)
	Share of income from equity investments			2.5			5.1
	Foreign currency losses			(11.9	)		(28.4	)
	(Losses) gains on derivative instruments			(21.2	)		33.4
Loss from continuing operations before income taxes				(123.3	)		(109.2	)
Income tax (expense) benefit				(9.6	)		7.3
	Loss from continuing operations			(132.9	)		(101.9	)
Discontinued operations
		Loss from discontinued operations, net of tax		(21.1	)		(2.5	)
Net loss				£(154.0	)		£(104.4	)
Basic and diluted loss from continuing operations per share				£(0.41	)		£(0.31	)
Basic and diluted loss from discontinued operations per share				£(0.06	)		£(0.01	)
Basic and diluted net loss per share				£(0.47	)		£(0.32	)
Dividends per share (in U.S. dollars)			$	0.04		$	0.04
Average number of shares outstanding				328.2			327.8

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited) (in millions, except per share data)



	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Revenue	£	1,027.7		£	1,000.0		£	3,060.8		£	2,968.1
Costs and expenses
Operating costs (exclusive of depreciation shown separately below)	403.3			401.7			1,223.4			1,202.7
Selling, general and administrative expenses	201.7			200.0			626.1			598.9
Restructuring and other charges	(0.8		)	6.2			4.1			7.7
Depreciation	243.5			235.6			716.7			694.6
Amortization	0.0			28.1			0.0			90.3
	847.7			871.6			2,570.3			2,594.2
Operating income	180.0			128.4			490.5			373.9
Other income (expense)
Interest expense	(100.2		)	(107.6		)	(304.4		)	(335.3		)
Loss on extinguishment of debt	0.0			(18.3		)	(58.6		)	(47.2		)
Share of income from equity investments	0.0			3.6			0.0			18.6
Loss on disposal of equity investments	0.0			(8.0		)	0.0			(8.0		)
Gain (loss) on derivative instruments	44.0			(59.3		)	67.9			(40.5		)
Foreign currency gains (losses)	0.3			(13.0		)	(5.5		)	0.8
Interest income and other, net	0.2			0.5			6.5			83.8
Income (loss) from continuing operations before income taxes	124.3			(73.7		)	196.4			46.1
Income tax expense	(0.4		)	(0.1		)	(0.8		)	(17.2		)
Income (loss) from continuing operations	123.9			(73.8		)	195.6			28.9
Loss from discontinued operations, net of tax	0.0			0.0			0.0			(1.2		)
Net income (loss)	£	123.9		£	(73.8	)	£	195.6		£	27.7
Per share amounts
Income (loss) from continuing operations
Basic earnings per share	£	0.46		£	(0.24	)	£	0.71		£	0.09
Diluted earnings per share	£	0.41		£	(0.24	)	£	0.68		£	0.09
Net income (loss)
Basic earnings per share	£	0.46		£	(0.24	)	£	0.71		£	0.09
Diluted earnings per share	£	0.41		£	(0.24	)	£	0.68		£	0.09
Dividends per share (in U.S. dollars)	$	0.04		$	0.04		$	0.12		$	0.12
Total comprehensive income (loss)	£	115.4		£	(83.8	)	£	188.8		£	(6.3	)

See accompanying notes.

Table of Contents

VIRGIN MEDIA INC. ~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in millions)~~

			Three months ended March 31,
			2009			2008
						(Adjusted)
Operating activities
Net loss				£(154.0	)		£(104.4	)
Loss from discontinued operations				21.1			2.5
Loss from continuing operations				(132.9	)		(101.9	)
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities
	Depreciation and amortization			293.9			320.8
	Non-cash interest			(26.8	)		(22.9	)
	Non-cash compensation			4.7			2.1
	Income from equity accounted investments, net of dividends received			(2.5	)		(4.4	)
	Income taxes			9.9			(6.3	)
	Amortization of original issue discount and deferred finance costs			9.1			5.5
	Unrealized foreign currency losses			16.4			26.9
	Unrealized losses (gains) on derivative instruments			23.2			(33.4	)
	Other			(1.3	)		0.1
Changes in operating assets and liabilities				(64.5	)		(75.9	)
		Net cash provided by operating activities		129.2			110.6
Investing activities
	Purchase of fixed and intangible assets			(144.4	)		(124.4	)
	Principal repayments (drawdowns) on loans to equity investments			1.2			(4.9	)
	Other			1.5			0.3
		Net cash used in investing activities		(141.7	)		(129.0	)
Financing activities
	Proceeds from employee stock option exercises			—			0.6
	Principal payments on long term debt and capital leases			(12.4	)		(8.8	)
	Dividends paid			(9.0	)		(6.6	)
		Net cash used in financing activities		(21.4	)		(14.8	)
Cash flow from discontinued operations
	Net cash used in operating activities			(7.9	)		(5.3	)
	Net cash used in investing activities			—			(0.6	)
		Net cash used in discontinued operations		(7.9	)		(5.9	)
Effect of exchange rate changes on cash and cash equivalents				(0.2	)		—
Decrease in cash and cash equivalents				(42.0	)		(39.1	)
Cash and cash equivalents, beginning of period				181.6			321.4
Cash and cash equivalents, end of period				£139.6			£282.3
Supplemental disclosure of cash flow information
Cash paid during the period for interest exclusive of amounts capitalized				£131.6			£142.1

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in millions)



	Nine months ended September 30,
	2012			2011
Operating activities:
Net income	£	195.6		£	27.7
Loss from discontinued operations	0.0			1.2
Income from continuing operations	195.6			28.9
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation and amortization	716.7			784.9
Non-cash interest	29.6			14.1
Share-based compensation	17.1			17.2
Loss on extinguishment of debt, net of prepayment premiums	10.5			31.7
Income from equity accounted investments, net of dividends received	0.0			(0.6		)
Unrealized (gains) losses on derivative instruments	(77.3		)	29.6
Foreign currency (gains) losses	(1.1		)	0.3
Loss on disposal of equity investments	0.0			8.0
Income taxes	4.1			21.7
Other	0.0			5.3
Changes in operating assets and liabilities	(87.6		)	(86.4		)
Net cash provided by operating activities	807.6			854.7
Investing activities:
Purchase of fixed and intangible assets	(572.4		)	(479.3		)
Proceeds from sale of fixed assets	2.1			1.5
Principal repayments on loans to equity investments	0.0			108.2
Acquisitions, net of cash acquired	(0.6		)	(14.6		)
Disposal of equity investments, net	(2.5		)	241.0
Other	0.0			2.5
Net cash used in investing activities	(573.4		)	(140.7		)
Financing activities:
New borrowings, net of financing fees	415.6			977.2
Repurchase of common stock	(330.2		)	(447.0		)
Proceeds from employee stock option exercises, net of taxes reimbursed	(0.6		)	14.4
Principal payments on long term debt	(414.3		)	(1,265.7		)
Principal payments on capital leases	(71.8		)	(62.7		)
Proceeds from settlement of cross-currency interest rate swaps	2.3			65.5
Dividends paid	(20.7		)	(23.7		)
Net cash used in financing activities	(419.7		)	(742.0		)
Cash flow from discontinued operations:
Net cash used in operating activities	0.0			(10.4		)
Net cash used in discontinued operations	0.0			(10.4		)
Effect of exchange rate changes on cash and cash equivalents	(1.5		)	(2.8		)
Decrease in cash and cash equivalents	(187.0		)	(41.2		)
Cash and cash equivalents, beginning of period	300.4			479.5
Cash and cash equivalents, end of period	£	113.4		£	438.3
Supplemental disclosure of cash flow information
Cash paid during the period for interest	£	268.6		£	324.5

See accompanying notes.

Table of Contents

VIRGIN MEDIA INC. ~~NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)~~

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1—Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, for interim financial information and ~~with~~ the rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all of the information and notes required by U.S. ~~generally accepted~~GAAP ~~accounting principles~~ for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring ~~accruals~~adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended ~~March~~September 3130, ~~2009~~2012 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2009~~2012. For further information, refer to the consolidated financial statements and notes thereto included in ~~the~~our annual report on Form 10-K for the year ended December 31, ~~2008~~2011, as which we filed with the SEC on February 2621, ~~2009~~ 2012, and which we refer to herein as the 2011 Annual Report.

~~The 2008 financial information has been adjusted so the basis of presentation is consistent with that of the 2009 financial information. The adjustments reflect (i)~~Note ~~the~~2—Recent financial condition and results of operations of our sit-up reporting unit as assets and liabilities available for sale and discontinued operations, respectively, in the periods presented and (ii) the application of the Financial Accounting ~~Standards Board, or FASB, Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments that may be Settled in Cash upon Conversion, or FSP APB 14-1.~~ Guidance

We ~~Note 2—Accounting~~adopted ~~Changes~~ new guidance regarding the presentation of comprehensive income on January 1, 2012 and have presented total comprehensive income in the condensed consolidated statements of comprehensive income for the current and prior periods. This guidance did not have a material impact on our financial statements.

InWe ~~May~~adopted ~~2008,~~new ~~the~~guidance ~~FASB~~regarding ~~issued~~fair ~~FSP~~value ~~APB 14-1~~measurement ~~which~~disclosure ~~requires~~requirements ~~that~~on ~~the~~January ~~liability~~1, 2012 and ~~equity~~applied ~~components~~it ofon ~~convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) be separately accounted for in~~ a ~~manner~~prospective ~~that reflects an issuer's nonconvertible debt borrowing rate~~basis. AsThis aguidance ~~result,~~did ~~the~~not ~~liability~~have ~~component is recorded at~~ a ~~discount~~material ~~reflecting~~impact ~~its~~on ~~below~~our ~~market~~financial coupon interest rate, and is subsequently accreted to its par value over its expected life, with the rate of interest that reflects the market rate at issuance being reflected in the results of operationsstatements.

~~We adopted FSP~~Note ~~APB 14-1~~3—Long onTerm January 1, 2009 as our convertible senior notes are within the scope of the standard. We have applied FSP APB 14-1 on a retrospective basis, whereby our prior period results have been adjusted. As the convertible notes were issued on April 16, 2008, this standard did not impact our previously reported statement of operations for the three months ended March 31, 2008. Debt

~~We applied~~On aMarch ~~nonconvertible~~13, ~~borrowing~~2012, ~~rate~~our wholly owned subsidiary, Virgin Media Finance PLC issued $500 million aggregate principal amount of 105.3525% ~~which~~senior ~~resulted~~notes indue ~~the~~2022 ~~recognition~~at par. The proceeds of a$495.5 ~~discount~~million, net of fees, were received on ~~the~~March ~~convertible~~13, 2012. Interest is payable on February 15 and August 15 each year, beginning on August 15, 2012. The senior notes ~~totaling~~due ~~£108~~2022 rank pari passu with Virgin Media Finance PLC's outstanding senior notes due 2016 and 2019.~~2 million~~ On March 28, ~~with~~2012, we used the ~~offsetting~~ ~~amount~~net ~~recognized~~proceeds asfrom athese ~~component~~new senior notes, and cash on our balance sheet, to redeem $500 million of ~~additional~~the ~~paid-in~~principal ~~capital.~~amount Inof ~~addition~~the $1,350 million 9.50% senior notes due 2016. We recognized a ~~cumulative~~loss ~~translation~~on ~~adjustment~~extinguishment of debt of £3658.1 6 million ~~was~~as ~~recognized~~a inresult ~~relation~~ of this redemption, which represented the difference between the consideration paid to ~~prior~~redeem ~~periods~~$500 million of the 9.50% senior notes due to2016 and the ~~decrease~~carrying invalue of those notes, and the ~~foreign~~write-off of associated deferred finance costs.

On June 28, 2012, we borrowed £100.0 million under our revolving credit facility of £450.0 million. We repaid this amount in full on September 28, 2012.

During October 2012 our wholly owned subsidiary, Virgin Media Finance PLC, effected both a cash tender for certain of our senior notes and a new issuance of senior notes, as more fully described in note 13, Subsequent Events.

If the trading price of our common stock exceeds 120% of the conversion price of our 6.50% convertible senior notes due 2016, or the convertible notes, for 20 out of the last 30 trading days of a calendar quarter, holders of the convertible notes may elect to convert their convertible notes during the following quarter. This condition was achieved in the three months ended September 30, 2012. If conversions of this nature occur, we may deliver cash, common stock, or a combination of both, at our election, to settle our obligations. We have classified this debt as long-term debt in the condensed consolidated balance sheet as of September 30, 2012 because we determined, in accordance with the Derivatives and Hedging Topic of the FASB ASC, that we have the ability to settle the obligations in equity in all circumstances, except in the case of a fundamental change (as defined in the indenture governing the convertible notes).

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 23—~~Accounting~~Long ~~Changes~~Term Debt (~~Continued~~continued)

~~denominated debt~~Long ~~balance~~term ~~subject~~debt torepayments, ~~translation~~excluding ~~during~~capital ~~2008.~~leases, ~~The~~as ~~following table presents the impact~~ of ~~these~~September 30, ~~adjustments~~2012, onwere ~~our~~due ~~previously reported consolidated balance sheet~~ as ~~of December 31, 2008.~~follows (in millions):

		Year ended December 31, 2008
Year ending September 30:
		As Reported			Adjustments			As Adjusted
2013	£	0.1
		(in millions)
2014	0.0
Long term debt, net of current portion			6,267.7			(138.1	)		6,129.6
2015	750.0
Additional paid-in capital			4,353.1			108.2			4,461.3
2016	668.9
Accumulated other comprehensive income			142.1			36.1			178.2
2017	618.5
Accumulated deficit			(2,618.9	)		(6.2	)		(2,625.1	)
Thereafter	3,483.1
Total debt payments	£	5,520.6

On ~~Note~~October ~~3—Discontinued~~27, ~~Operations~~2010, we entered into capped call option transactions, or conversion hedges, with certain counterparties relating to our convertible notes. The conversion hedges are intended to offset a portion of the dilutive effects that could potentially be associated with conversion of the convertible notes at maturity and provide us with the option to receive the number of shares of our common stock (or in certain circumstances cash) with a value equal to the excess of (a) the value owed by us (up to the cap price of $35.00 per share) to convertible notes investors pursuant to the terms of the notes on conversion of up to 90% of the notes over (b) the aggregate face amount of such converted notes upon maturity of the convertible notes. The conversion hedges also provide various mechanisms for settlement in our common stock and/or cash in certain circumstances, based primarily on the settlement method elected for the notes. These conversion hedges have an initial strike price of $19.22 per share of our stock, which is the conversion price provided under the terms of our convertible notes, and a cap price of $35.00 per share of our stock. We paid £205.4 million in respect of the conversion hedges during 2010. The cost of these transactions was not deductible for U.S. federal income tax purposes, and the proceeds, if any, received upon exercise of the options will not be taxable for U.S. federal income tax purposes.

OnThe ~~April 1,~~conversion ~~2009,~~hedges wedo ~~reached~~not anqualify ~~agreement~~for toequity ~~sell~~classification ~~our~~under ~~sit-up~~U.S. ~~reporting~~GAAP ~~unit,~~as there are potential circumstances in which ~~was~~cash ~~formerly~~settlement ~~included~~may ~~within~~be ~~our~~required ~~Content~~at ~~segment~~the discretion of the counterparties. ~~sit-up~~As ~~provided~~such, ~~a variety~~the fair value of ~~retail~~the ~~consumer~~conversion ~~products~~hedges, ~~through~~which ~~three~~was ~~interactive~~estimated ~~auction-based~~to ~~television~~be ~~channels:~~£219.9 ~~price-drop~~million tvas of September 30, ~~bid~~2012, tvhas ~~and~~been ~~speed~~included ~~auction~~as tva non-current derivative financial asset in the condensed consolidated balance sheets. Refer to note 4 for additional discussion of the fair value measurement of the conversion hedges.

~~In accordance with the provisions of FASB Statement No.~~Note ~~144,~~4—Fair ~~Accounting~~Value for the Impairment or Disposal of Long-Lived Assets, or FAS 144, we determined that the planned sale of the sit-up business met the requirements as of March 31, 2009 to be reflected as assets and liabilities held for sale and discontinued operations in both the current and prior periods and accordingly, we adjusted the balance sheet as of December 31, 2008 and statement of operations for the three months ended March 31, 2008. Revenue of the sit-up business, reported in discontinued operations, for the three months ended March 31, 2009 and 2008 was £38.9 million and £55.0 million, respectively. sit-up's pre-tax loss, reported within discontinued operations, for the three months ended March 31, 2009 and 2008 was £21.1 million and £2.5 million, respectively. In accordance with the provisions of FAS 144, we wrote down the assets held for sale to fair value, resulting in a £19.0 million impairment charge, which is included in the loss from discontinued operations for the three months ended March 31, 2009. Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The types of inputs used to measure fair value are classified into the following hierarchy:



Level 1		Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2		Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability

Level 3		Unobservable inputs for the asset or liability

We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 34—~~Discontinued~~Fair ~~Operations~~Value Measurements (~~Continued~~continued)

The tables below present our assets and liabilities ofmeasured ~~the~~at ~~sit-up~~fair ~~business~~value ~~reported~~ as ~~held~~at ~~for~~September 30, ~~sale~~2012 asand ~~of March~~December 31, ~~2009~~2011, ~~included~~aggregated by the level in the fair value hierarchy into which those measurements fall (in millions):

Current assets held for sale
	September 30, 2012
	Accounts receivable, net		£	2.6
	Level 1			Level 2		Level 3		Total
	Inventory			5.4
Assets
	Prepaid expenses			4.1
Derivative financial instruments, excluding conversion hedges	£	0.0		£	176.0	£	0.0	£	176.0
	Other current assets			3.7
Conversion hedges	0.0			0.0		219.9		219.9
		Current assets held for sale		£15.8
Total	£	0.0		£	176.0	£	219.9	£	395.9
Current liabilities held for sale
Liabilities
	Accounts payable			£18.6
Derivative financial instruments	£	0.0		£	114.7	£	0.0	£	114.7
	Accrued expenses			7.2
Total	£	0.0		£	114.7	£	0.0	£	114.7
	Deferred revenue and other liabilities			0.7
		Current liabilities held for sale		£26.5

In accordance with the sale agreement, part of the consideration included a loan note from Aurelius AG. On April 1, 2009, we entered into a five-year carriage agreement with sit-up for continued distribution of the three sit-up channels on our television platform. In general, the agreements governing the loan note and exchange of services between us and sit-up are for specified periods at commercial rates. Following the sale, our continuing involvement with sit-up is limited to the loan note and carriage agreement and is therefore not considered significant.



	December 31, 2011
	Level 1		Level 2		Level 3		Total
Assets
Derivative financial instruments, excluding conversion hedges	£	0.0	£	219.2	£	0.0	£	219.2
Conversion hedges	0.0		0.0		138.2		138.2
Total	£	0.0	£	219.2	£	138.2	£	357.4
Liabilities
Derivative financial instruments	£	0.0	£	70.3	£	0.0	£	70.3
Total	£	0.0	£	70.3	£	0.0	£	70.3

In estimating the fair value of our financial assets and liabilities, we used the following methods and assumptions:

Derivative financial instruments: As a result of our financing activities, we are exposed to market risks from changes in interest and foreign currency exchange rates, which may adversely affect our operating results and financial position. When deemed appropriate, we minimize our risks from interest and foreign currency exchange rate fluctuations through the use of derivative financial instruments such as foreign currency forward rate contracts, interest rate swaps and cross-currency interest rate swaps. These contracts are valued using internal models based on observable inputs, counterparty valuations, or market transactions in either the listed or over-the-counter markets, adjusted for non-performance risk. As such, these derivative instruments are classified within level 2 in the fair value hierarchy.

The fair values of our derivative financial instruments are disclosed in note 5.

Valuation of conversion hedges: Because the conversion hedges do not qualify for equity classification, the fair values have been included as a non-current derivative financial asset in the condensed consolidated balance sheets. The conversion hedges may only be exercised by us upon maturity of the convertible notes. As of September 30, 2012, the fair value of these instruments was estimated to be £219.9 million, using the Black-Scholes Merton valuation technique. The fair values of the conversion hedges are primarily impacted by the price of our stock on the measurement date, but are also impacted by the remaining duration of the options, the strike price ($19.22 per share) of the instrument, the expected volatility of our stock, the cap price ($35.00 per share) of the instrument, the dividend yield on our stock, exchange rates, and counterparty non-performance risk. The table below presents the estimated impact on the September 30, 2012 fair value of a hypothetical 20% increase and decrease in our stock price, holding all other inputs constant (in millions):



	September 30, 2012
Estimated fair value of conversion hedges as reported	£	219.9
Estimated fair value of conversion hedges assuming a 20% increase in our stock price	£	269.1
Estimated fair value of conversion hedges assuming a 20% decrease in our stock price	£	152.5

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 4—~~Long~~Fair ~~Term~~Value ~~Debt~~ Measurements (continued)

~~Long~~We have determined that the overall valuation of the conversion hedges falls within level 3 of the fair value hierarchy as the assumption for the expected volatility of our stock price over the term ~~debt~~of ~~consisted~~the options is based on an unobservable input and is deemed to be significant to the determination of (fair value. Other impacts are not significant or are observable. We utilized expected volatility assumptions of 26% and 32% in ~~millions):~~the valuation of each component of the conversion hedges as of September 30, 2012. An increase in this input in isolation would generally result in a higher value of the conversion hedges while a decrease in this input would result in a lower value of the conversion hedges. Non-performance risk is based on quoted credit default swaps for counterparties to the contracts. The inclusion of counterparty non-performance risk resulted in a decrease to the fair values of the conversion hedges of £16.1 million and £25.0 million as of September 30, 2012 and December 31, 2011, respectively.

				December 31, 2008
				(Adjusted)
U.S. Dollar
	8.75% U.S. Dollar senior notes due 2014	£297.2			£290.7
	9.125% U.S. Dollar senior notes due 2016	384.6			376.2
	6.50% U.S. Dollar convertible senior notes due 2016	561.1			545.9
	Senior credit facility	371.9			363.8
Euro
	8.75% Euro senior notes due 2014	208.6			214.2
	Senior credit facility	393.1			403.7
Sterling
	9.75% Sterling senior notes due 2014	375.0			375.0
	Senior credit facility	3,421.9			3,421.9
	Capital leases	162.7			174.6
	Other	3.9			4.1
		6,180.0			6,170.1
	Less: current portion	(257.7	)		(40.5	)
		£5,922.3			£6,129.6

The following table presents a reconciliation of the beginning and ending balances of the conversion hedges (in millions):

The effective interest rate on the senior credit facility was 7.0% and 7.3% as at March 31, 2009 and December 31, 2008, respectively.



Balance at December 31, 2011	£	138.2
Unrealized gain included in gain (loss) on derivative instruments	45.3
Unrealized currency translation adjustment included in other comprehensive income	(4.9		)
Balance at March 31, 2012	£	178.6
Unrealized loss included in gain (loss) on derivative instruments	(10.6		)
Unrealized currency translation adjustment included in other comprehensive income	3.6
Balance at June 30, 2012	£	171.6
Unrealized gain included in gain (loss) on derivative instruments	54.4
Unrealized currency translation adjustment included in other comprehensive income	(6.1		)
Balance at September 30, 2012	£	219.9

Future ~~Note 5—Derivative~~changes ~~Financial~~in ~~Instruments~~ fair values of the conversion hedges will be reported as gains (losses) on derivative instruments in the condensed consolidated statements of comprehensive income.

InLong-term ~~March~~debt: ~~2008,~~The ~~the~~carrying ~~FASB~~value ~~issued~~of ~~Statement~~our ~~No. 161,~~senior ~~Disclosures~~credit ~~about~~facility ~~Derivative~~approximates ~~Instruments~~its fair value and ~~Hedging~~is ~~Activities—an~~excluded ~~Amendment~~from ofthe ~~FASB Statement~~table Nobelow. ~~133,~~ orThe ~~FAS 161,~~fair ~~which~~values ~~amends and expands the disclosure requirements~~ of ~~FASB~~our ~~Statement~~senior ~~No. 133~~notes, ~~Accounting~~convertible ~~for Derivative~~notes ~~Instruments~~ and ~~Hedging~~senior ~~Activities,~~secured ornotes ~~FAS 133,~~in ~~with~~ the ~~intent~~table tobelow ~~provide users of financial statements with an enhanced understanding of: (1) how and why an entity uses derivative instruments; (2) how derivative instruments and related hedged items~~ are ~~accounted~~based ~~for~~on ~~under~~the ~~FAS 133~~market ~~and~~prices ~~its~~in ~~related~~active ~~interpretations;~~markets ~~and~~which ~~(3) how derivative~~incorporate ~~instruments and related hedged items affect an entity's financial position, financial~~ non-performance ~~and cash flows~~risk. ~~FAS 161~~As ~~requires qualitative disclosures about objectives and strategies for using derivatives~~such, ~~quantitative~~these ~~disclosures~~measurements ~~about~~are ~~fair~~classified ~~value~~within ~~amounts~~Level of1 ~~and gains and losses on derivative instruments and disclosures about credit risk-related contingent features~~ in derivative instruments. FAS 161 applies to all entities and all derivative instruments and is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. We adopted the ~~provisions~~fair ofvalue ~~FAS 161 on January 1, 2009~~hierarchy.

The carrying values of the $500 million 5.25% and £650 million 5.50% senior secured notes due 2021 include increases of £45.5 million and £106.3 million, respectively, at September 30, 2012 and increases of £45.7 million and £77.9 million at December 31, 2011, respectively, at December 31, 2011, as a result of our application of fair value hedge accounting to these instruments.

The carrying amounts and fair values of our long term debt, excluding capital leases, were as follows (in millions):



	September 30, 2012				December 31, 2011
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
6.50% U.S. dollar convertible senior notes due 2016	£	540.8	£	1,069.4	£	551.1	£	869.1
9.50% U.S. dollar senior notes due 2016	515.6		587.0		849.2		966.4
9.50% euro senior notes due 2016	139.2		162.1		145.3		170.1
8.375% U.S. dollar senior notes due 2019	366.3		420.4		380.6		416.9
8.875% sterling senior notes due 2019	345.5		393.8		345.2		378.9
5.25% U.S. dollar senior notes due 2022	309.3		327.9		0.0		0.0
6.50% U.S. dollar senior secured notes due 2018	611.8		677.2		635.4		663.5
7.00% sterling senior secured notes due 2018	865.6		945.0		864.5		923.1
5.25% U.S. dollar senior secured notes due 2021	353.0		354.0		353.1		321.8
5.50% sterling senior secured notes due 2021	751.2		711.8		722.4		640.3

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5— - Derivative Financial Instruments ~~(Continued)~~and Hedging Activities

Strategies and Objectives for Holding Derivative Instruments

Our ~~results~~operations are materially impacted by changes in interest rates and foreign currency exchange rates. In an effort to manage these risks, we periodically enter into various derivative instruments including interest rate swaps, cross-currency interest rate swaps and foreign exchange forward rate contracts. InWe ~~accordance with FAS 133, we are required to~~ recognize all derivative instruments as either assets or liabilities at fair value on our consolidated balance sheets, and ~~to recognize~~ certain changes in the fair value of derivative instruments onin our condensed consolidated statements of ~~operations.~~comprehensive income.

We have entered into cross-currency interest rate swaps and foreign currency forward rate contracts to manage interest rate and foreign exchange rate currency exposures with respect to our U.S. dollar ($) and euro (€) denominated debt obligations. Additionally, we have entered into interest rate swaps to manage interest rate exposures resulting from variable and fixed rates of interest we pay on our U.K. pound sterling (£) denominated debt obligations. We have also entered into U.S. dollar, ~~euro and South African rand (ZAR)~~ forward rate contracts to manage our foreign exchange rate currency exposures related to certain committed and forecasted purchases.

Whenever it is practical to do so, we ~~will~~ designate a derivative contract as either a cash flow or fair value hedge for accounting purposes. These ~~derivatives~~relationships are referred to as " “Accounting Hedges"” below. When a derivative contract is not designated, ~~the~~as ~~derivative~~an ~~will~~Accounting beHedge, it is treated as an economic hedge with mark-to-market movements and realized gains or losses recognized through gains (losses) on derivative instruments in the condensed consolidated statements of ~~operations~~comprehensive income. These derivatives are referred to as "“Economic Hedges"” below. We do not enter into derivatives for speculative or trading purposes.

~~In respect~~During ~~to Accounting Hedges, we believe our hedge contracts will be highly effective during their term in offsetting changes in cash flow or fair value attributable to~~ the ~~hedged risk.~~three Weand ~~perform,~~nine atmonths ~~least~~ended ~~quarterly~~September 30, ~~both a prospective and retrospective assessment of the effectiveness of our hedge contracts~~2012, ~~including~~we ~~assessing~~recognized ~~the~~gains ~~possibility~~ of ~~counterparty default~~£42.0 Ifmillion ~~we determine that a derivative is no longer expected to be highly effective, we discontinue hedge accounting prospectively~~ and ~~recognize~~£70.4 ~~subsequent~~million ~~changes~~on ~~in the fair value of the~~ derivative ~~in earnings. As a result of our effectiveness assessment at March 31~~instruments, ~~2009~~respectively, werelating ~~believe~~to ~~our~~ derivative ~~contracts~~instruments that ~~are~~were not designated ~~and qualify for hedge accounting under FAS 133 will continue to be highly effective in offsetting changes in cash flow~~ or ~~fair~~qualifying ~~value~~as ~~attributable~~a tohedging ~~the hedged risk~~instrument.

The ~~foreign~~ ~~currency~~conversion ~~forward~~hedges ~~rate~~are ~~contracts,~~intended ~~interest~~to ~~rate~~offset ~~swaps~~a ~~and~~portion ~~cross-currency~~of ~~interest~~the ~~rate~~dilutive ~~swaps~~effects ~~are~~that ~~valued~~could ~~using~~potentially ~~counterparty~~be ~~valuations,~~caused orby ~~market~~the ~~transactions~~conversion inof ~~either~~the convertible notes at maturity and provide us with the ~~listed~~ oroption ~~over-~~to receive the~~-counter~~ ~~markets,~~number ~~adjusted~~of ~~for~~shares ~~non-performance~~of ~~risk.~~our Ascommon ~~such,~~stock ~~these~~(or ~~derivative~~in ~~instruments~~certain ~~are~~circumstances ~~classified~~cash) ~~within~~with ~~level 2~~a invalue equal to the ~~fair~~excess of (a) the value ~~hierarchy~~ owed by us (up to the cap price of $35. ~~Derivative~~00 ~~instruments~~per ~~which~~share) ~~are~~to ~~subject~~convertible senior note investors pursuant to ~~master~~the ~~netting~~terms ~~arrangements~~of ~~are~~the ~~not~~notes ~~offset~~on ~~and~~conversion weof ~~have~~up ~~not~~to ~~provided,~~90% ~~nor~~of dothe wenotes ~~require,~~over ~~cash~~(b) the ~~collateral~~aggregate ~~with~~face ~~any~~amount ~~counterparty~~of such converted notes upon maturity of the convertible senior notes.

We believe that those relationships designated as Accounting Hedges will be highly effective throughout their term in offsetting changes in cash flow or fair value attributable to the hedged risk. If we determine it is probable that forecasted transactions to which a hedge contract relates will not occur, we discontinue hedge accounting prospectively and immediately reclassify any amounts accumulated in other comprehensive income to income. We perform, at least quarterly, both a prospective and retrospective assessment of the effectiveness of our hedge contracts, including assessing the possibility of counterparty default. If we determine that a hedging relationship is no longer expected to be highly effective, we discontinue hedge accounting prospectively and recognize subsequent changes in the fair value of the derivative in gains (losses) on derivative instruments in the condensed consolidated statements of comprehensive income. As a result of our effectiveness assessment at September 30, 2012, we believe our derivative contracts that are designated and qualify for hedge accounting will continue to be highly effective in offsetting changes in cash flow or fair value attributable to the hedged risk.

The foreign currency forward rate contracts, interest rate swaps and cross-currency interest rate swaps are valued using internal models based on observable inputs, counterparty valuations, or market transactions in either the listed or over-the-counter markets, adjusted for non-performance risk. Non-performance is based on quoted credit default swaps for counterparties to the contracts and swaps. These derivative instruments are classified within level 2 in the fair value hierarchy, because we consider all of the significant inputs are observable. Derivative instruments which are subject to master netting arrangements are not offset and we have not provided, nor do we require, cash collateral with any counterparty.

Refer to note 4 for a discussion of the conversion hedges.

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VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5—Derivative Financial Instruments and Hedging Activities (~~Continued~~continued)

The fair values of ~~these~~our derivative instruments recorded on our condensed consolidated balance sheets were as follows (in millions):

			March 31, 2009			December 31, 2008
	September 30, 2012			December 31, 2011
Included within current assets:
	Accounting Hedge
Accounting Hedges
Foreign currency forward rate contracts	£	~~Foreign currency forward rate contracts~~0.0	£	~~42.6~~£	0.1	£	~~37.6~~
		Interest rate swaps		6.1			6.1
Economic Hedges
		Cross-currency interest rate swaps		55.9			61.5
Foreign currency forward rate contracts	0.0			1.6
	Economic Hedge
Interest rate swaps	2.2			0.2
		Foreign currency forward rate contracts		62.5			63.2
Cross-currency interest rate swaps	2.6			7.6
			£	167.1		£	168.4
Forward share repurchase contracts	5.7			0.0
Included within non-current assets:
	£	10.5		£	9.5
	Accounting Hedge
Included within non-current assets:
		Interest rate swaps	£	0.1		£	—
Accounting Hedges
		Cross-currency interest rate swaps		124.3			136.1
Interest rate swaps	£	104.4		£	78.0
	Economic Hedge
Cross-currency interest rate swaps	39.0			94.3
		Cross-currency interest rate swaps		277.2			299.6
Economic Hedges
			£	401.6		£	435.7
Interest rate swaps	0.0			3.1
Included within current liabilities:
Cross-currency interest rate swaps	22.1			34.3
	Accounting Hedge
Conversion hedges	219.9			138.2
		Interest rate swaps	£	6.6		£	2.2
	£	385.4		£	347.9
	Economic Hedge
Included within current liabilities:
		Foreign currency forward rate contracts		79.2			79.6
Economic Hedges
		Interest rate swaps		6.5			2.6
Foreign currency forward rate contracts	£	0.6		£	0.0
			£	92.3		£	84.4
Interest rate swaps	4.0			7.5
Included within non-current liabilities:
Cross-currency interest rate swaps	3.2			9.2
	Accounting Hedge
	£	7.8		£	16.7
		Interest rate swaps	£	19.5		£	11.5
Included within non-current liabilities:
		Cross-currency interest rate swaps		3.7			—
Accounting Hedges
	Economic Hedge
Cross-currency interest rate swaps	£	60.2		£	7.3
		Cross-currency interest rate swaps		27.5			31.1
Economic Hedges
			£	50.7		£	42.6
Interest rate swaps	41.4			38.4
Cross-currency interest rate swaps	5.3			7.9
	£	106.9		£	53.6

Cross-Currency Interest Rate Swaps—Hedging the Interest Payments of Senior Notes and Senior ~~Credit~~Secured ~~Facility~~ Notes

AsDuring ofthe three months ended March 31, ~~2009~~2012, we ~~had~~terminated ~~outstanding~~the cross-currency interest rate swaps toon ~~mitigate~~ the ~~interest~~$500 ~~and~~million ~~foreign~~9.50% ~~exchange~~senior ~~rate risks~~notes ~~relating~~due to2016 that were redeemed in the ~~pound~~quarter. ~~sterling~~We ~~value~~also ofentered into new cross-currency interest ~~payments~~rate onswaps to mitigate the ~~U.S. dollar~~foreign ~~and~~exchange ~~euro~~rate ~~denominated~~risk associated with the $500 million 5.25% senior notes due 2022.

As of September 30, 2012, we had outstanding cross-currency interest rate swaps to mitigate the interest and foreign exchange rate risks relating to the pound sterling value of interest and principal payments on the U.S. dollar and euro denominated senior notes and senior secured notes.

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VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5—Derivative Financial Instruments and Hedging Activities (~~Continued~~continued)

The terms of our outstanding cross-currency interest rate swaps at ~~March~~September 3130, ~~2009~~2012, were as follows:

Hedged item/Maturity date	Hedge type	~~Hedge~~Notional ~~type~~amountdue fromcounterparty		~~Notional amount due from counterparty~~		Notional amountdue tocounterparty	~~Notional amount due to counterparty~~		Weighted ~~average~~averageinterest ~~interest~~ rate ~~due~~duefrom ~~from~~ counterparty	Weighted ~~average~~averageinterest ~~interest~~ rate due ~~to counterparty~~tocounterparty
		(in millions)		~~(in millions)~~		(in millions)	~~(in millions)~~
$425m senior notes due 2014
$850m senior notes due 2016
	April 2009	Accounting		$	425.0		£	231.4	8.75%	9.42%
August 2016	Accounting	$	850.0			£	526.7		9.50%	9.98%
	April 2009 to October 2011	Accounting			425.0			291.0	8.75%	9.53%
$1,000m convertible senior notes due 2016
$550m senior notes due 2016
November 2016	Economic	$	1,000.0			£	516.9		6.50%	6.91%
	August 2016	Accounting			550.0			301.2	9.13%	8.54%
$600m senior notes due 2019
$1,000 convertible senior notes due 2016
October 2019	Accounting	$	264.3			£	159.8		8.38%	9.03%
	November 2016	Economic			1,000.0			505.6	6.50%	6.95%
October 2011 to October 2019	Accounting	$	335.7			£	203.0		8.38%	9.00%
Senior credit facility
$1,000m senior secured notes due 2018
	September 2012	Economic			531.9			288.5	3 month $ LIBOR + 2.00%	3 month £ LIBOR + 2.12%
January 2018	Accounting	$	1,000.0			£	615.7		6.50%	7.02%
				$	2,931.9		£	1,617.7
$500m senior secured notes due 2021
€225m senior notes due 2014
January 2021	Accounting	$	500.0			£	308.9		5.25%	6 month LIBOR + 1.94%
	April 2009	Accounting		€	225.0		£	156.0	8.75%	10.26%
$500m senior notes due 2022
	April 2009 to October 2011	Accounting			225.0			207.4	8.75%	8.90%
February 2022	Accounting	$	500.0			£	313.6		5.25%	5.80%
Senior credit facility
		$	4,450.0			£	2,644.6
	September 2012	Economic			427.9			296.7	3 month EURIBOR + 2.00%	3 month LIBOR + 2.16%
€180m senior notes due 2016
				€	877.9		£	660.1
August 2016	Accounting	€	180.0			£	158.6		9.50%	10.18%
		€	180.0			£	158.6
Other
	April 2012	Economic		€	28.3		£	20.1	3 month EURIBOR + 2.38%	3 month LIBOR + 2.69%
December 2012	Economic	€	56.7			£	40.3		3 month EURIBOR + 2.38%	3 month LIBOR + 2.69%
	December 2012	Economic			28.3			20.1	3 month EURIBOR + 2.38%	3 month LIBOR + 2.69%
December 2013	Economic	€	43.3			£	30.8		3 month EURIBOR + 2.88%	3 month LIBOR + 3.26%
	April 2013	Economic			21.7			15.4	3 month EURIBOR + 2.88%	3 month LIBOR + 3.26%
		€	100.0			£	71.1
	December 2013	Economic			21.7			15.4	3 month EURIBOR + 2.88%	3 month LIBOR + 3.26%
December 2012	Economic	£	38.8			€	56.7		3 month LIBOR + 2.40%	3 month EURIBOR + 2.38%
				€	100.0		£	71.0
December 2013	Economic	£	29.7			€	43.3		3 month LIBOR + 2.90%	3 month EURIBOR + 2.88%
	April 2012	Economic		£	19.4		€	28.3	3 month LIBOR + 2.40%	3 month EURIBOR + 2.38%
		£	68.5			€	100.0
	December 2012	Economic			19.4			28.3	3 month LIBOR + 2.40%	3 month EURIBOR + 2.38%
	April 2013	Economic			14.8			21.7	3 month LIBOR + 2.90%	3 month EURIBOR + 2.88%
	December 2013	Economic			14.8			21.7	3 month LIBOR + 2.90%	3 month EURIBOR + 2.88%
				£	68.4		€	100.0

All of our cross-currency interest rate swaps include exchanges of the notional amounts at the start and end of the contract except for the ~~contract~~ ~~maturing in April 2009 hedging the $425 million senior notes due 2014 and the~~ contract maturing in November 2016 hedging the $1,000 million convertible senior notes due 2016.

During ~~Interest~~October ~~Rate~~2012 ~~Swaps—Hedging~~our wholly owned subsidiary, Virgin Media Finance PLC, effected both a cash tender for certain of ~~Interest~~our ~~Rate~~senior ~~Sensitive~~notes ~~Obligations~~ and a new issuance of senior notes, as more fully described in note 13, Subsequent Events.

As of March 31, 2009, we had outstanding interest rate swap agreements to manage the exposure to variability in future cash flows on the interest payments associated with our senior credit facility,

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VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5—Derivative Financial Instruments and Hedging Activities (~~Continued~~continued)

~~which accrue~~Interest atRate ~~variable~~Swaps—Hedging ~~rates based on LIBOR. The interest rate swaps allow us to receive interest based on three and six month LIBOR in exchange for payments~~ of ~~interest~~Interest atRate ~~fixed~~Sensitive ~~rates.~~ Obligations

~~The terms~~As of ~~our~~September 30, 2012, we had outstanding interest rate swap ~~contracts~~agreements atto ~~March 31~~manage the exposure to variability in future cash flows on the interest payments associated with our senior credit facility, ~~2009~~which ~~were~~accrue asat ~~follows:~~variable rates based on LIBOR. We have also entered into interest rate swap agreements to manage our exposure to changes in the fair value of certain debt obligations due to interest rate fluctuations. The interest rate swaps allow us to receive or pay interest based on three or six month LIBOR in exchange for payments or receipts of interest at fixed rates.

Hedged item/Maturity date		Hedge type	Notional amount		Weighted average interest rate due from counterparty
			(in millions)
Senior credit facility
	April 2009	Accounting	£	500.0	3 month LIBOR	5.18%
	April 2009	Economic		500.0	3 month LIBOR	5.18%
	April 2009	Accounting		1,725.0	6 month LIBOR	5.33%
	April 2009	Economic		425.0	6 month LIBOR	5.09%
	June 2009	Economic		17.0	3 month LIBOR	4.81%
	April 2009 to April 2010	Accounting		2,600.0	3 month LIBOR	2.27%
	April 2010 to September 2012	Accounting		600.0	3 month LIBOR	2.96%
			£	6,367.0

The terms of our outstanding interest rate swap contracts at September 30, 2012 were as follows:

Foreign Currency Forward Rate Contracts—Hedging the Principal Obligations of the Debt Obligations and Committed and Forecasted Transactions



Hedged item/Maturity date	Hedge type	Notional amount		Weighted average interest rate due from counterparty	Weighted average interest rate due to counterparty
		(in millions)
Senior credit facility
October 2012 to December 2015	Economic	£	200.0	6 month LIBOR	2.91%
October 2012 to December 2015	Economic	200.0		6 month LIBOR	2.87%
October 2012 to December 2015	Economic	200.0		6 month LIBOR	2.79%
£650m senior secured notes due 2021
January 2021	Accounting	£	650.0	5.50%	6 month LIBOR + 1.84%
Other
March 2013	Economic	£	300.0	3 month LIBOR	3.28%
March 2013	Economic	300.0		1.86%	3 month LIBOR

AsForeign ofCurrency ~~March 31,~~Forward ~~2009,~~Rate weContracts—Hedging ~~had~~Committed outstanding foreign currency forward rate contracts to purchase U.S. dollars which hedge changes in the pound sterling value of the U.S. dollar denominated principal obligations. We have also entered into forward rate contracts to purchase U.S. dollars, euros and ~~South African~~Forecasted ~~rand to hedge committed and forecasted purchases. The terms of our outstanding foreign currency forward rate contracts at March 31, 2009 were as follows:~~ Transactions

Hedged item/Maturity date		Hedge type	Notional amount due from counterparty		Notional amount due to counterparty		Weighted average exchange rate
			(in millions)		(in millions)
$425m senior notes due 2014
	April 2009	Accounting	$	425.0	£	254.1	1.6724
Committed and forecasted purchases
	April 2009 to June 2009	Economic	$	11.5	£	8.2	1.4100
	May 2009 to January 2010	Accounting	€	2.4	£	2.1	1.1250
	April 2009 to January 2010	Accounting	ZAR	41.0	£	2.7	15.1351
Other
	April 2009	Economic	$	345.2	£	207.9	1.6610
	April 2009	Economic	£	194.1	$	345.2	1.7788
	April 2009	Economic	€	151.0	£	110.1	1.3720
	April 2009	Economic	£	107.3	€	151.0	1.4069

As of September 30, 2012, we had outstanding foreign currency forward rate contracts to purchase U.S. dollars to hedge committed and forecasted purchases. The terms of our outstanding foreign currency forward rate contracts at September 30, 2012 were as follows:



Hedged item/Maturity date	Hedge type	Notional amount due from counterparty		Notional amount due to counterparty		Weighted average exchange rate
		(in millions)		(in millions)
Committed and forecasted purchases
October 2012 to December 2012	Economic	$	36.0	£	22.9	1.5743
January 2013 to June 2013	Economic	$	72.0	£	44.5	1.6177

Cash Flow Hedging

For derivative instruments that are designated and qualify as cash flow Accounting Hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. In our consolidated statement of cash flows, we recognize the cash flows resulting from derivative contracts that are treated as Accounting Hedges in the same category where the cash flows from the underlying exposure are recognized. Cash flows from derivative contracts that are not designated as Accounting Hedges are recognized as operating activities in the condensed consolidated statement of cash flows. If we discontinue hedge accounting for an instrument, subsequent cash flows are classified based on the nature of the instrument.

Gains or losses representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized as gains or losses on derivative instruments in the condensed consolidated statement of comprehensive income in the period in which they occur. During the three and nine months ended September 30, 2012 and 2011, we recognized no gain or loss relating to ineffectiveness on our cash flow hedges.

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VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5—Derivative Financial Instruments and Hedging Activities (~~Continued~~continued)

The ~~Cash~~following ~~Flow~~table ~~Hedges~~ presents the effective amount of gain or (loss) recognized in other comprehensive income (loss) and amounts reclassified to earnings during the three and nine months ended September 30, 2012 (in millions):

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. In our consolidated statement of cash flows, we recognize the cash flows resulting from derivative contracts that are treated as Accounting Hedges in the same category where the cash flows from the underlying exposure are recognized. All other cash flows from derivative contracts are recognized as operating activities in the consolidated statement of cash flows.



	Total		Interest rate swaps	Cross- currency interest rate swaps		Forward foreign exchange contracts		Tax Effect
Balance at December 31, 2011	(32.4	)	3.3	(25.2	)	0.1		(10.6	)
Amounts recognized in other comprehensive income (loss)	(66.4	)	—	(66.4	)	—		—
Amounts reclassified to earnings impacting:
Foreign exchange gain	60.4		—	60.4		—		—
Interest expense	1.4		—	1.4		—		—
Balance at March 31, 2012	(37.0	)	3.3	(29.8	)	0.1		(10.6	)
Amounts recognized in other comprehensive income (loss)	31.5		—	31.4		—		0.1
Amounts reclassified to earnings impacting:
Foreign exchange loss	(31.1	)	—	(31.1	)	—		—
Interest expense	1.9		—	1.9		—		—
Operating costs	(0.1	)	—	—		(0.1	)	—
Balance at June 30, 2012	(34.8	)	3.3	(27.6	)	—		(10.5	)
Amounts recognized in other comprehensive income (loss)	(75.6	)	—	(75.8	)	—		0.2
Amounts reclassified to earnings impacting:
Foreign exchange gain	54.5		—	54.5		—		—
Interest expense	2.5		—	2.5		—		—
Balance at September 30, 2012	(53.4	)	3.3	(46.4	)	—		(10.3	)

~~Gains or~~Assuming ~~losses~~no ~~representing~~change ~~either~~in ~~hedge~~interest ~~ineffectiveness~~rates or ~~hedge~~foreign ~~components~~exchange ~~excluded~~rates ~~from~~for the ~~assessment~~next oftwelve ~~effectiveness~~months, ~~are recognized as gains or losses on derivative instruments on~~ the ~~statement~~amount of ~~operations~~pre-tax inincome ~~the~~or ~~period~~losses inthat ~~which~~would ~~they~~be ~~occur.~~reclassified Wefrom ~~have~~other nocomprehensive ~~gains~~income or(loss) ~~losses~~to ~~reclassified into~~ earnings aswould abe ~~result~~losses of ~~the discontinuance of cash flow hedges~~£0.9 ~~During~~million ~~the~~relating ~~three~~to ~~months ended~~interest ~~March 31,~~rate ~~2009~~swaps, welosses ~~recognized~~of ~~a loss totaling~~ £08.1 9 million relating to ~~ineffectiveness.~~cross-currency ~~The~~interest ~~following~~rate ~~table~~swaps, ~~presents~~and ~~the~~income ~~effective amount~~ of ~~gain~~£0.0 ormillion ~~(loss)~~relating ~~recognized in other comprehensive income and amount reclassified~~ to ~~earnings~~forward ~~during~~foreign ~~the~~exchange ~~three months ended March 31, 2009~~contracts.

		Total			Interest rate swaps			Cross-currency interest rate swaps			Forward foreign exchange contracts		Tax Effect
		(in millions)
Balance at December 31, 2008		£	40.1		£	(7.9	)	£	64.0		£	—	£	(16.0	)
Amounts recognized in other comprehensive income			(30.6	)		(14.1	)		(16.9	)		0.4		—
Amounts reclassified to earnings impacting:
	Foreign exchange (gains) losses		(2.8	)		—			(2.8	)		—		—
	Interest expense		(2.1	)		2.0			(4.1	)		—		—
Tax effect recognized			9.9			—			—			—		9.9
Balance at March 31, 2009		£	14.5		£	(20.0	)	£	40.2		£	0.4	£	(6.1	)

Fair Value Hedging

~~Assuming no~~For ~~change~~derivative instruments that are designated in ~~interest~~qualifying ~~rates~~fair orvalue ~~foreign~~Accounting ~~exchange~~Hedge ~~rates~~relationships, ~~for~~the gain or loss on the ~~next~~derivative, ~~twelve~~inclusive ~~months~~of counterparty non-performance risk, is reported in earnings. The difference between these movements and changes in the ~~amount~~fair value of ~~pre-tax~~the ~~(losses)~~hedged ~~gains~~debt ~~that~~obligations ~~would~~due beto ~~reclassified~~changes in the hedged risks is referred to ~~earnings~~as ~~would~~hedge ~~be £(16~~ineffectiveness.~~6) million~~ In our condensed consolidated balance sheet, ~~£9.1 million~~changes ~~and~~in ~~£0.4 million~~the ~~relating~~value of the hedged debt obligations due to ~~interest~~changes ~~rate~~in ~~swaps,~~the ~~cross-currency~~hedged ~~interest~~risks ~~rate~~are ~~swaps~~included ~~and~~as ~~forward~~adjustments ~~foreign~~to ~~exchange contracts,~~the ~~respectively~~carrying value of the debt.

In ~~Note 6—Restructuring~~our ~~and~~condensed ~~Other~~consolidated ~~Charges~~ statement of cash flows, we recognize the cash flows resulting from derivative contracts that are treated as Accounting Hedges in the same category where the cash flows from the underlying exposure are recognized. All other cash flows from derivative contracts are recognized as operating activities in the condensed consolidated statement of cash flows.

~~Restructuring~~Gains ~~and~~or ~~other~~losses ~~charges~~representing ofeither ~~£5.4 million~~hedge ~~for~~ineffectiveness ~~the~~or ~~three~~hedge ~~months~~components ~~ended~~excluded ~~March 31,~~from ~~2009 related primarily to employee termination costs in connection with~~ the ~~restructuring~~ ~~program~~assessment ~~initiated~~of ineffectiveness ~~the~~are ~~last~~recognized ~~quarter of 2008~~ as ~~discussed~~gains ~~below.~~or ~~Restructuring~~losses ~~and~~on ~~other~~derivative ~~charges~~instruments ofin ~~£4.6 million for~~ the ~~three~~condensed ~~months~~consolidated ~~ended~~statements ~~March 31, 2008 related to lease exit and employee termination costs as a result~~ of ~~our acquisition-related restructuring programs.~~

During the fourth quarter of 2008, we commenced the implementation of a restructuring plan aimed at driving further improvements in our operational performance and eliminating inefficiencies in

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 65—~~Restructuring~~Derivative Financial Instruments and ~~Other~~Hedging ~~Charges~~Activities (~~Continued~~continued)

~~order to~~comprehensive ~~create~~income ain ~~fully-integrated,~~the ~~customer-focused~~period ~~organization~~in which they occur. ~~This~~We ~~plan~~recognized ~~involves~~hedge ~~the~~ineffectiveness ~~incurrence~~gains of ~~substantial~~£2.0 ~~operating~~million and ~~capital~~losses ~~expenditures,~~of ~~including~~£2.5 ~~certain~~million ~~costs~~for ~~which~~the ~~may~~three beand ~~treated~~nine ~~as restructuring~~months ~~costs~~ended ~~under~~September 30, ~~FASB~~2012, ~~Statement~~respectively, Noand losses of £6. ~~146,~~1 ~~Accounting~~million and £7.9 million for ~~Costs~~the ~~Associated~~three ~~with~~and ~~Exit~~nine ormonths ~~Disposal~~ended ~~Activities.~~September 30, 2011, respectively.

~~The following~~Note 6—Shareholders' ~~tables~~Equity ~~summarize our historical restructuring accruals, the restructuring accruals resulting from the acquisitions made by us during 2006~~ and ~~the~~Share-Based ~~accruals for our restructuring plan announced in 2008 (in millions):~~ Compensation

	Historical Restructuring Accruals			2006 Acquisition Restructuring Accruals			2008 Restructuring Accruals						Total
	Lease Exit Costs			Lease Exit Costs			Involuntary Employee Termination and Related Costs			Lease and Contract Exit Costs
Balance, December 31, 2008	£	16.5		£	38.5		£	2.0		£	14.0		£	71.0
Charged to expense		0.5			0.8			5.6			4.3			11.2
Revisions		(1.2	)		(4.6	)		—			—			(5.8	)
Utilized		(1.2	)		(1.7	)		(2.0	)		(7.6	)		(12.5	)
Balance, March 31, 2009	£	14.6		£	33.0		£	5.6		£	10.7		£	63.9

On July 27, 2011, we announced a second phase capital structure optimization program which includes the application of, in aggregate, up to £850 million for purposes of repurchasing our common stock and debt and for effecting associated derivative transactions until December 31, 2012. Our second phase capital structure optimization program consists of the application of up to £625 million in repurchases of our common stock and up to £225 million for transactions relating to our debt and convertible debt, including related derivative transactions. In addition, on October 27, 2011, we announced our intention to expend up to a further £250 million on share repurchases from the proceeds from the sale of our UKTV joint venture companies to a subsidiary of Scripps Network Interactive Inc. Our capital structure optimization programs may be effected through open market, privately negotiated, and/or derivative transactions, and may be implemented through arrangements with one or more brokers. Any shares of common stock acquired in connection with these programs will be held in treasury or cancelled.

During ~~Note 7—Stockholders'~~the ~~Equity~~three months ended March 31, 2012, we entered into a capped Accelerated Stock Repurchase (ASR) to purchase $250 million (£157.3 million) of our common stock. We received 10.2 million shares of common stock in connection with the ASR at an average purchase price per share of $24.58. The ASR was terminated on March 26, 2012 and ~~Share~~the ~~Based~~shares ~~Compensation~~ of common stock so acquired were cancelled.

During the ~~year~~third ~~ended~~quarter ~~December 31~~of 2012, ~~2008~~we ~~and~~entered into a further ASR to purchase $175.0 million (£112.7 million) of our common stock. We received 5.9 million shares of common stock in connection with this ASR during the ~~three~~quarter ~~months~~at ~~ended~~an ~~March 31~~average purchase price per share of $27.78, ~~2009~~and the stock so acquired was cancelled. The specific number of shares ultimately repurchased through the ASR is based generally on the daily volume-weighted average share price of our common stock over the duration of the ASR, wesubject ~~paid~~to a provision that establishes a minimum number of repurchased shares. The final settlement of the ~~following~~repurchase ~~dividends:~~contemplated by the ASR occurred on October 26, 2012. Further details of this final settlement are provided in note 13, Subsequent Events.

Board Declaration Date	Per Share				Total Amount
					(in millions)
Year ended December 31, 2008:
February 6, 2008	$	0.04	March 12, 2008	March 20, 2008	£	6.6
May 21, 2008		0.04	June 12, 2008	June 20, 2008		6.7
September 2, 2008		0.04	September 12, 2008	September 22, 2008		7.1
November 25, 2008		0.04	December 12, 2008	December 22, 2008		8.9
Three months ended March 31, 2009:
February 27, 2009	$	0.04	March 12, 2009	March 20, 2009	£	9.0

During the nine months ended September 30, 2012, we repurchased 4.2 million shares of common stock in connection with the second phase capital structure optimization program, at an average purchase price per share of $22.54 ($94.9 million, or £60.3 million, in aggregate), through open market repurchases. The shares of common stock so acquired were cancelled.

~~Future payments~~During ofthe ~~regular~~three ~~quarterly~~months ~~dividends~~ended bySeptember 30, us2011, ~~are~~we atrepurchased ~~the~~14.2 ~~discretion~~million shares of common stock in connection with the ~~Board~~second ofphase ~~Directors~~capital ~~and~~structure ~~will~~optimization beprogram, ~~subject~~at toan ~~our~~average ~~future~~purchase ~~needs~~price ~~and~~per ~~uses~~share of ~~cash~~$24.44 ($346.9 million, ~~which~~or ~~could~~£215.4 ~~include investments~~million, in ~~operations~~aggregate), ~~the~~of ~~repayment~~which ofapproximately ~~debt,~~5.1 ~~and~~million shares were purchased through open market repurchases at an average rate purchase price per share ~~repurchase~~of ~~programs~~$24.85 In($127.0 ~~addition~~million, ~~the~~or ~~terms~~£77.6 ofmillion, ~~our~~in aggregate) and ~~our~~approximately ~~subsidiaries'~~9.1 ~~existing~~million ~~and~~shares ~~future~~were ~~indebtedness~~purchased ~~and~~through ~~the~~capped ~~laws~~accelerated ofstock ~~jurisdictions under~~repurchase ~~which~~programs ~~those~~at ~~subsidiaries~~an ~~are~~average ~~organized~~rate ~~limit~~purchase ~~the~~price ~~payment~~per share of ~~dividends~~$24.20 ($219.9 million, ~~loan~~or ~~repayments~~£137.8 ~~and~~million, ~~other~~in ~~distributions~~aggregate). toThe usshares ~~under~~of ~~many~~common ~~circumstances.~~stock acquired in connection with this program were cancelled.

During the nine months ended September 30, 2011, we repurchased 12.0 million shares of common stock in connection with the first phase capital structure optimization program, at an average purchase price per share of $28.83 ($345.5 million, or £212.6 million, in aggregate), through open market repurchases. Approximately 14.2 million shares of common stock were repurchased in connection with the second phase capital structure optimization program, at an average purchase price per share of $24.44 ($346.9 million, or £215.4 million, in aggregate), of which approximately 5.1 million shares were purchased through open market repurchases at an average rate purchase price per share of $24.85 ($127.0 million, or £77.6 million, in aggregate) and approximately 9.1 million shares were purchased through capped accelerated stock repurchase programs at an average rate purchase price per share of $24.20 ($219.9 million, or £137.8 million, in aggregate). The shares of common stock acquired in connection with both programs were cancelled.

Total share based compensation expense included within selling, general and administrative expenses in the condensed consolidated statements of comprehensive income was £3.4 million and £17.1 million for the three and nine months ended September 30, 2012, respectively, and £2.9 million and £17.2 million for the same periods in 2011.

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 7—~~Stockholders'~~Income ~~Equity~~Per ~~and~~Common Share ~~Based Compensation (Continued)~~

Basic ~~and~~ ~~diluted~~ net ~~loss~~income per common share is computed by dividing the net ~~loss~~income for the three and nine months ended ~~March~~September 3130, ~~2009~~2012 and ~~2008~~2011 by the weighted average number of shares outstanding during the respective periods. ~~Options,~~Diluted ~~warrants,~~net income per common share is computed on the basis of the weighted average number of shares ~~issuable~~of ~~under~~common ~~our~~stock ~~convertible~~plus ~~senior~~the ~~notes~~effect of dilutive potential common shares outstanding during the period using the treasury stock method for options, ~~and~~sharesave options, shares of restricted stock held in escrow atand ~~March 31,~~restricted ~~2009~~stock ~~and 2008~~units, ~~respectively,~~and ~~are excluded from~~ the ~~calculation~~if-converted ofmethod ~~diluted~~for ~~loss~~shares ~~per~~potentially ~~share,~~issuable ~~since~~under ~~these~~our ~~securities~~convertible ~~are anti-dilutive~~notes.

The weighted average number of shares outstanding for the three and nine months ended ~~March~~September 3130, ~~2009~~2012 and ~~2008~~2011 is computed as follows (in millions):

		Three months ended March 31,
	Three months ended September 30,						Nine months ended September 30,
		2009			2008
	2012			2011			2012		2011
Number of shares outstanding at start of period	273.5		~~328.1~~	313.2		~~327.5~~	286.4		321.3
Issues of common stock (average number outstanding during the period)			0.1			0.3
Issue of common stock (average number outstanding during the period)	0.4			1.3			1.4		3.3
Average number of shares outstanding			328.2			327.8
Purchase of treasury shares (weighted average)	(4.1	)		(4.1	)		(11.7	)	(9.1	)
Weighted average number of shares outstanding	269.8			310.4			276.1		315.5

~~Total share~~The ~~based~~following ~~compensation~~table ~~expense~~sets ~~included~~forth ~~in selling, general and administrative expenses in~~ the ~~statements~~components of ~~operations~~basic ~~was £4.7 million~~ and ~~£2.1 million~~ ~~for~~diluted ~~the~~income ~~three~~per ~~months~~common ~~ended~~share ~~March 31,~~(in ~~2009 and 2008, respectively.~~ millions):

Note 8—Comprehensive Loss



	Three months ended September 30,					Nine months ended September 30,
	2012		2011			2012		2011
Numerator for basic income per common share from continuing operations	£	123.9	£	(73.8	)	£	195.6	£	28.9
Interest on convertible notes, net of tax	10.3		0.0			30.8		0.0
Numerator for diluted income per common share from continuing operations	£	134.2	£	(73.8	)	£	226.4	£	28.9
Weighted average number of shares:
Denominator for basic income per common share	269.8		310.4			276.1		315.5
Effect of dilutive securities:
Share based awards to employees	4.7		0.0			4.5		4.7
Shares issuable under convertible notes	52.0		0.0			52.0		0.0
Denominator for diluted income per common share	326.5		310.4			332.6		320.2

~~Comprehensive~~The ~~loss~~following ~~comprises~~table sets forth the number of potential common shares excluded from the calculation of the denominator for diluted income per common share (in millions):

		Three months ended March 31,
	Three months ended September 30,						Nine months ended September 30,
		2009			2008
	2012			2011			2012	2011
Net loss for period		£	(154.0	)	£	(104.4	)
Stock options	3.8			10.9			4.2	6.7
Currency translation adjustment			4.6			—
Sharesave options	0.0			0.8			0.0	0.3
Net unrealized (losses) gains on derivatives, net of tax			(22.1	)		15.9
Restricted stock held in escrow	0.1			0.6			0.1	0.6
Reclassification of derivative gains to net income, net of tax			(3.5	)		(9.6	)
Restricted stock units	3.0			3.6			3.0	3.6
Comprehensive loss		£	(175.0	)	£	(98.1	)
Shares issuable under convertible notes	0.0			52.0			0.0	52.0

~~The components~~In ofthe ~~accumulated~~three ~~other~~and ~~comprehensive~~nine ~~income~~months ended September 30, ~~net~~2012, certain share based awards to employees have been excluded from the calculation of ~~taxes,~~the ~~were~~diluted asweighted ~~follows~~average ~~(in~~number ~~millions):~~of shares because generally their exercise prices exceeded our average share price during the calculation period.

	March 31, 2009			December 31, 2008
				(Adjusted)
Foreign currency translation	£	174.2		£	169.6
Pension liability adjustments		(31.5	)		(31.5	)
Net unrealized gains on derivatives		14.5			40.1
	£	157.2		£	178.2

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 9 7—Income ~~Taxes~~ Per Common Share (continued)

AtIn ~~each~~the ~~period~~three ~~end, it is necessary for us to make certain estimates~~ and ~~assumptions~~nine tomonths ~~compute~~ended ~~the provision for income taxes including~~September 30, ~~but not limited to~~2012, ~~the~~certain ~~expected~~restricted ~~operating income~~stock ~~(or~~held ~~loss) for the year, projections of the proportion of income (or loss) earned and taxed~~ in ~~the~~escrow ~~United Kingdom~~ and ~~the~~certain ~~extent~~restricted tostock ~~which~~units ~~this~~have ~~income~~been ~~(or~~excluded ~~loss)~~from ~~may also be taxed in~~ the ~~United States,~~calculation ~~permanent~~of ~~and temporary differences,~~ the ~~likelihood~~diluted ofweighted ~~deferred~~average ~~tax~~number ~~assets being recovered and the outcome~~ of ~~contingent~~shares ~~tax~~because ~~risks. At each interim period, management uses the best information available to develop~~ these ~~estimates~~shares ~~and assumptions, which~~ are ~~used~~contingently toissuable ~~compute~~based ~~the~~on ~~forecast effective tax rate for~~ the ~~full~~achievement ~~year which is applied in computing the income tax expense or benefit for the interim period. In accordance with U.S. generally accepted accounting principles, the impact~~ of ~~revisions~~performance ~~to these estimates are recorded as income tax expense~~ and/or ~~benefit~~market inconditions ~~the~~that ~~period in which they become known. Accordingly, the accounting estimates used to compute the provision for income taxes~~ have ~~changed~~not ~~and~~been ~~will~~achieved ~~change~~ as ~~new~~of ~~events occur~~September 30, ~~as more experience is acquired, as additional information is obtained and our tax environment changes~~2012. To the extent that the estimate changes during a subsequent quarter, the effect of the change on prior quarters as well as on the current quarter is included in income tax expense for the current quarter.

~~For the~~Stock ~~three~~Option months ended March 31, 2009, there was an income tax expense of £9.6 million as compared with an income tax benefit of £7.3 million for the same period in 2008. The income tax expense for the three months ended March 31, 2009 was comprised of current federal taxes of £0.1 million, deferred federal tax expense of £1.5 million, a U.K. current tax benefit of £1.9 million and a U.K. deferred tax expense of £9.9 million. The U.K. current tax benefit related to amounts receivable in respect of the sale of U.K. tax losses to an equity-method investee. The U.K. deferred tax expense relates to an increase in our deferred tax asset valuation allowance as a result of a reduction in certain deferred tax liabilities relating to amounts recognized in the statement of other comprehensive income during the quarter. The income tax benefit for the three months ended March 31, 2008 was comprised of current federal taxes of £0.2 million, deferred federal tax expense of £3.3 million, a U.K. current tax benefit of £1.3 million and a U.K. deferred tax benefit of £9.5 million. The U.K. current tax benefit related to amounts receivable in respect of the sale of U.K. tax losses to an equity-method investee. Grants

All options outstanding under our stock incentive plans have a ten year term and become fully exercisable within five years of continued employment. We ~~recognize~~ ~~interest~~have historically issued new shares upon exercise of the options and ~~penalties~~expect ~~related~~to continue to ~~unrecognized~~do ~~tax~~so. ~~benefits~~For inperformance-based ~~income~~option ~~tax~~grants, ~~expense~~the inperformance objectives are based upon both quantitative and qualitative objectives, including earnings and stock price performance, amongst others. These objectives may be absolute or relative to prior performance or to the ~~statements~~performance of ~~operations.~~other entities, indices or benchmarks and may be expressed in terms of progression within a specific range.

Sharesave ~~Note 10—Recent~~Option ~~Accounting Pronouncements~~ Grants

InAll ~~December~~options ~~2007,~~granted under the ~~FASB~~Virgin ~~issued Statement No.~~Media ~~141(R), Business Combinations, or FAS 141(R)~~Inc. ~~FAS 141(R)~~Sharesave ~~requires~~Plan ~~the acquiring~~enable ~~entity~~eligible inemployees ~~a business combination~~ to ~~prospectively~~purchase ~~recognize~~shares ~~the full fair value~~ of ~~assets~~our ~~acquired~~common ~~and~~stock ~~liabilities~~at ~~assumed in the transaction (whether~~ a ~~full~~discount. orEmployees ~~partial~~are ~~acquisition); establishes~~invited ~~the~~to ~~acquisition-date~~take ~~fair~~out ~~value~~savings ascontracts ~~the~~that ~~measurement~~last ~~objective~~ for ~~all~~three ~~assets~~years. ~~acquired~~At ~~and~~the ~~liabilities~~end ~~assumed; requires expensing~~ of ~~most~~the ~~transaction~~contract, ~~and~~employees ~~restructuring~~use ~~costs; and requires~~ the ~~acquirer~~proceeds ~~to disclose to investors and other users all~~ of ~~the~~these ~~information~~savings ~~needed~~ to ~~evaluate~~exercise ~~and understand~~ the ~~nature~~options ~~and~~granted ~~financial~~under ~~effect of~~ the ~~business combination~~plan. ~~Further, regardless~~We ofintend ~~the business combination date, any subsequent changes~~ to ~~acquired~~issue ~~uncertain~~new ~~tax~~shares ~~positions~~upon ~~and~~exercise ~~valuation~~of ~~allowances~~the ~~associated with acquired deferred tax assets will no longer be applied to goodwill but will be recognized as an adjustment to income tax expense~~options. ~~FAS 141(R) is effective for financial statements~~

Restricted Stock Grants

The shares of restricted stock granted under our stock incentive plans have a term of up to three and a half years and vest based on time or performance, subject to continued employment. For performance-based restricted stock grants, the performance objectives are based upon quantitative and qualitative objectives, including earnings, operational performance and achievement of strategic goals, amongst others, and vest after a one to three year period. These objectives may be absolute or relative to prior performance or to the performance of other entities, indices or benchmarks and may be expressed in terms of progression within a specific range.

Restricted Stock Unit and Performance Share Grants

The restricted stock units and performance shares granted under our stock incentive plans have a term of up to three and a half years and vest based on performance, subject to continued employment. These targets may be absolute or relative to prior performance or to the performance of other entities, indices or benchmarks and may be expressed in terms of progression within a specific range.

Convertible Notes

Holders of our U.S. dollar denominated 6.50% convertible senior notes due 2016 may tender their notes for conversion at any time on or after August 15, 2016 through to the second scheduled trading date preceding the maturity date. Prior to August 15, 2016, holders may convert their notes, at their option, only under the following circumstances: (i) in any quarter, if the closing sale price of Virgin Media Inc.'s common stock during at least 20 of the last 30 trading days of the prior quarter was more than 120% of the applicable conversion price per share of common stock on the last day of such prior quarter; (ii) if, for five consecutive trading days, the trading price per $1,000 principal amount of notes was less than 98% of the product of the closing price of our common stock and the then applicable conversion rate; (iii) if a specified corporate event occurs, such as a merger, recapitalization, reclassification, binding share exchange or conveyance of all, or substantially all, of Virgin Media Inc.'s assets; (iv) the declaration by Virgin Media Inc. of the distribution of certain rights, warrants, assets or debt securities to all, or substantially all, holders of Virgin Media Inc.'s common stock; or (v) if Virgin Media Inc. undergoes a fundamental change (as defined in the indenture governing the convertible senior notes), such as a change in control, merger, consolidation, dissolution or delisting.

The initial conversion rate is equal to 52.0291 shares of Virgin Media Inc.'s common stock per $1,000 of convertible notes, which represents an initial conversion price of approximately $19.22 per share of common stock. The conversion rate is subject to adjustment for stock splits, stock dividends or distributions, stock repurchases where the price exceeds market values, the issuance of certain rights or warrants or certain cash dividends or distributions.

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 108—~~Recent~~Comprehensive ~~Accounting Pronouncements (Continued)~~ Income

~~issued for~~Comprehensive ~~fiscal~~income ~~years~~comprises ~~beginning~~(in ~~after December 15, 2008. The adoption of this statement did not have a material impact on our consolidated financial statements.~~ millions):

In December 2007, the FASB issued Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements—an Amendment of ARB No. 51, or FAS 160. FAS 160 establishes requirements for ownership interests in subsidiaries held by parties other than ourselves (sometimes called "minority interests") to be clearly identified, presented, and disclosed in the consolidated statement of financial position within equity, but separate from the parent's equity. All changes in the parent's ownership interests are required to be accounted for consistently as equity transactions and any non-controlling equity investments in unconsolidated subsidiaries must be measured initially at fair value. FAS 160 is effective, on a prospective basis, for fiscal years beginning after December 15, 2008; however, presentation and disclosure requirements must be retrospectively applied to comparative financial statements. The account balances recorded in our consolidated financial statements relating to noncontrolling interests are immaterial and therefore, the disclosure requirements of FAS 160 have not been applied as permitted by the provisions of the accounting standard.



	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Net income (loss) for period	£	123.9		£	(73.8	)	£	195.6		£	27.7
Currency translation adjustment	9.5			(11.2		)	12.4			(11.8		)
Net unrealized (losses) gains on derivatives, net of tax	(75.6		)	41.5			(110.5		)	(24.0		)
Reclassification of derivative losses (gains) to net income, net of tax	57.0			(39.8		)	89.5			2.3
Pension liability adjustment, net of tax	0.6			(0.5		)	1.8			(0.5		)
	£	115.4		£	(83.8	)	£	188.8		£	(6.3	)

The ~~Note 11—Industry~~components ~~Segments~~ of accumulated other comprehensive income, net of taxes, were as follows (in millions):

Our reporting segments are based on our method of internal reporting along with the criteria used by our chief executive officer, who is our chief operating decision maker (CODM), to evaluate segment performance, the availability of separate financial information and overall materiality considerations.



	September 30, 2012			December 31, 2011
Foreign currency translation	£	162.3		£	149.9
Pension liability adjustment	(85.7		)	(87.5		)
Net unrealized losses on derivatives	(53.4		)	(32.4		)
	£	23.2		£	30.0

~~Our previously~~Note ~~reported~~9—Contingent operating segments were based on how we distributed our services. Distribution through cable systems, delivery of television content, and provision of mobile phone services made up the core of our business and were the focus of how the business was managed internally through our former Cable, Content and Mobile segments. Liabilities

~~As a~~We ~~result~~are involved in lawsuits, claims, investigations and proceedings, consisting of ~~the~~intellectual ~~business~~property, ~~reorganization~~commercial, ~~initiated~~employee and employee benefits which arise in ~~2008,~~the weordinary ~~have~~course ~~realigned~~of our ~~internal~~business. ~~reporting~~In ~~structure~~accordance ~~and~~with the ~~related~~Contingencies ~~financial~~Topic ~~information~~of ~~used~~the byFASB ASC, we recognize a provision for a liability when management believes that it is both probable that a liability has been incurred and the ~~CODM~~amount of the loss can be reasonably estimated. ~~Our~~ ~~operating~~We ~~structures~~believe we have ~~been~~adequate ~~revised~~provisions tofor ~~build~~any asuch ~~customer-focused~~matters. ~~organization~~We ~~able~~review these provisions at least quarterly and adjust these provisions to ~~respond~~reflect ~~effectively~~the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to ~~rapid~~a ~~changes~~particular case. Additionally, when we believe it is at least reasonably possible that a liability has been incurred in excess of any recorded liabilities we provide an estimate of the ~~market,~~possible ~~technology~~loss ~~and~~or ~~customer~~range ~~demands~~of ~~through~~loss ~~our~~or ~~three~~a ~~new customer-based~~statement ~~segments:~~that ~~Consumer~~such an estimate cannot be made. While litigation is inherently unpredictable, ~~Business~~we ~~and~~believe ~~Content~~that we have valid defenses with respect to legal matters pending against us.

Our ~~Consumer~~ ~~segment,~~revenue ~~part~~generating ofactivities ~~which~~are ~~was~~subject ~~previously~~to ~~included~~Value ~~within~~Added ~~our~~Tax, ~~Cable~~or ~~segment,~~VAT. isThe U.K. tax authorities have challenged our ~~primary~~VAT ~~segment,~~treatment ~~consisting~~of certain of ~~the~~these ~~distribution~~activities. ofAs ~~television~~a ~~programming~~result, ~~broadband~~we ~~and fixed~~have ~~line~~estimated ~~telephone~~contingent ~~services~~losses tototaling ~~consumers~~£30.8 onmillion ~~our~~as ~~cable~~of ~~network~~September 30, ~~and~~2012 that are not accrued for, as we deem them to abe ~~lesser~~reasonably ~~extent~~possible, ~~off~~but ~~our~~not ~~cable~~probable, ~~network.~~of ~~The~~resulting ~~Consumer~~in ~~segment~~a ~~also~~liability. ~~includes~~We ~~our~~currently ~~former~~expect ~~Mobile~~an ~~segment~~initial ~~consisting~~hearing ofon ~~our~~these ~~mobile telephony~~matters ~~and~~to ~~broadband~~take ~~business.~~place in 2013.

Our Business segment, which was previously part of our Cable segment, comprises our operations carried out through ntl:Telewest Business which provides a complete portfolio of voice, data and internet solutions to leading businesses, public sector organizations and service providers in the U.K.

We operate our Content segment through Virgin Media TV, which supplies television programming to the U.K. pay-television broadcasting market.

The 2008 fiscal year amounts have been adjusted to conform to the current period presentation. We performed an interim impairment review of the goodwill related to the previous Mobile segment as

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 11 10—Industry Segments ~~(Continued)~~

~~at January 1,~~Our ~~2009~~reporting ~~and~~segments ~~concluded~~are ~~that~~based on our method of internal reporting along with the ~~goodwill~~criteria ~~was~~used ~~not~~by ~~impaired.~~our Wechief ~~are~~executive ~~also~~officer, ~~performing~~who ~~the~~is ~~necessary~~our ~~valuations~~chief ~~required~~operating decision maker (CODM), to ~~allocate~~evaluate ~~goodwill~~segment ~~between~~performance, the ~~revised~~availability of separate financial information and overall materiality considerations. We have two reporting segments, Consumer and Business ~~segments.~~, as described below.

~~Segment contribution,~~Our ~~which~~Consumer issegment ~~operating income (loss) before network operating costs, corporate costs, depreciation, amortization, goodwill and intangible asset impairments and restructuring and other charges,~~ is ~~management's~~our ~~measure~~primary of segment ~~profit as permitted under FASB Statement No. 131~~, ~~Disclosures~~consisting ~~about Segments~~ of ~~an Enterprise and Related Information. Segment contribution excludes~~ the ~~impact~~distribution of ~~certain~~television ~~costs~~programming, broadband and ~~expenses~~fixed ~~that~~line ~~are~~telephone ~~not~~services ~~directly attributable~~ to ~~the~~residential ~~reporting~~customers ~~segments,~~on ~~such~~our ascable ~~the costs of operating the~~ network, ~~corporate~~the ~~costs~~provision ~~and~~of ~~depreciation~~broadband and ~~amortization.~~fixed ~~Restructuring~~line ~~and~~telephone ~~other~~services ~~charges,~~to ~~and~~residential ~~goodwill~~customers ~~and~~outside ~~intangible asset impairments are excluded from segment contribution as management believes they are not characteristic~~ of our ~~underlying~~cable ~~business~~network, ~~operations. Assets are reviewed on a consolidated basis~~ and ~~are not allocated to segments for management reporting since~~ the ~~primary~~ ~~asset~~provision of ~~the~~mobile ~~business~~telephony isand ~~the~~mobile ~~cable~~broadband ~~network~~to ~~infrastructure,~~residential ~~which is shared by our Consumer and Business segments~~customers.

~~Segment information~~Our ~~for~~Business ~~the~~segment ~~three~~comprises ~~months~~our ~~ended~~operations ~~March 31~~carried out through Virgin Media Business which provides voice, ~~2009~~data and ~~2008~~internet issolutions asto ~~follows~~businesses, (public sector organizations and service providers in ~~millions):~~the U.K.

	Three months ended March 31, 2009
	Consumer		Business		Content		Total
Revenue	£	753.3	£	149.8	£	32.6	£	935.7
Inter segment revenue		—		—	£	6.6	£	6.6
Segment Contribution	£	438.2	£	82.6	£	6.9	£	527.7

Segment contribution, which is operating income before network operating costs, corporate costs, depreciation, amortization, goodwill and intangible asset impairments and restructuring and other charges, is management's measure of segment profit. Segment contribution excludes the impact of certain costs and expenses that are not directly attributable to the reporting segments, such as the costs of operating the network, corporate costs and depreciation and amortization. Restructuring and other charges, and goodwill and intangible asset impairments are excluded from segment contribution as management believes they are not characteristic of our underlying business operations. Assets are reviewed on a consolidated basis and are not allocated to segments for management reporting since the primary asset of the business is the cable network infrastructure, which is shared by our Consumer and Business segments.

	Three months ended March 31, 2008
	Consumer		Business		Content		Total
Revenue	£	758.2	£	160.7	£	28.4	£	947.3
Inter segment revenue		—	£	0.1	£	6.3	£	6.4
Segment Contribution	£	451.3	£	82.2	£	4.0	£	537.5

Segment information for the three and nine months ended September 30, 2012 and 2011 was as follows (in millions):

The reconciliation of total segment contribution to our consolidated operating income (loss) is as follows (in millions):



	Three months ended September 30, 2012						Three months ended September 30, 2011
	Consumer		Business		Total		Consumer		Business		Total
Revenue	£	859.1	£	168.6	£	1,027.7	£	846.0	£	154.0	£	1,000.0
Segment contribution	£	521.9	£	95.5	£	617.4	£	493.5	£	90.1	£	583.6
	Nine months ended September 30, 2012						Nine months ended September 30, 2011
	Consumer		Business		Total		Consumer		Business		Total
Revenue	£	2,555.8	£	505.0	£	3,060.8	£	2,503.8	£	464.3	£	2,968.1
Segment contribution	£	1,522.3	£	278.4	£	1,800.7	£	1,473.0	£	274.5	£	1,747.5

		Three months ended March 31,
		2009		2008
Total segment contribution		£	527.7	£	537.5
	Other operating and corporate costs		215.4		214.0
	Depreciation		232.7		230.9
	Amortization		61.2		89.9
	Restructuring and other charges		5.4		4.6
Consolidated operating income (loss)		£	13.0	£	(1.9	)

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 12 10—~~Condensed~~Industry ~~Consolidated~~Segments ~~Financial Information~~ (continued)

OnThe ~~April 13,~~reconciliation ~~2004, our wholly owned subsidiary, Virgin Media Finance PLC, or Virgin Media Finance, issued £375 million aggregate principal amount~~ of ~~9.75% senior~~total ~~notes~~segment ~~due~~contribution ~~2014,~~to ~~$425 million~~consolidated ~~aggregate~~operating ~~principal~~income ~~amount of 8.75% senior notes due 2014,~~ and ~~€225 million~~ ~~aggregate~~net ~~principal~~income ~~amount~~is ~~of 8.75% senior notes due 2014, together referred to~~ as ~~the~~follows Senior Notes due 2014. On July 25, 2006, Virgin Media Finance issued $550 million aggregate principal amount of 9.125% senior notes due 2016, which together with the Senior Notes due 2014, are referred to as the Senior Notes. Virgin Media Inc. and certain of its subsidiaries, namely Virgin Media Group LLC, Virgin Media Holdings Inc., Virgin Media (~~UK)~~in Group, Inc. and Virgin Media Communications Limited, have guaranteed the Senior Notes on a senior basis. Virgin Media Investment Holdings Limited, or VMIH, has guaranteed the Senior Notes on a senior subordinated basis. millions):

We present the following condensed consolidated financial information as of March 31, 2009 and December 31, 2008 and for the three months ended March 31, 2009 and 2008 as required by Rule 3-10(d) of Regulation S-X.



	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Total segment contribution	£	617.4		£	583.6		£	1,800.7		£	1,747.5
Other operating and corporate costs	194.7			185.3			589.4			581.0
Restructuring and other charges	(0.8		)	6.2			4.1			7.7
Depreciation	243.5			235.6			716.7			694.6
Amortization	0.0			28.1			0.0			90.3
Consolidated operating income	180.0			128.4			490.5			373.9
Other income (expense)
Interest expense	(100.2		)	(107.6		)	(304.4		)	(335.3		)
Loss on extinguishment of debt	0.0			(18.3		)	(58.6		)	(47.2		)
Share of income from equity investments	0.0			3.6			0.0			18.6
Loss on disposal of equity investments	0.0			(8.0		)	0.0			(8.0		)
Gain (loss) on derivative instruments	44.0			(59.3		)	67.9			(40.5		)
Foreign currency gains (losses)	0.3			(13.0		)	(5.5		)	0.8
Interest income and other, net	0.2			0.5			6.5			83.8
Income tax expense	(0.4		)	(0.1		)	(0.8		)	(17.2		)
Income (loss) from continuing operations	123.9			(73.8		)	195.6			28.9
Loss from discontinued operations, net of tax	0.0			0.0			0.0			(1.2		)
Net income (loss)	£	123.9		£	(73.8	)	£	195.6		£	27.7

		March 31, 2009
Balance sheets		Company		Virgin Media Finance			Other guarantors			VMIH		All other subsidiaries			Adjustments			Total
		(in millions)
Cash and cash equivalents		£	13.2	£	—		£	0.4		£	64.7	£	61.3		£	—		£	139.6
Restricted cash			—		—			—			—		6.0			—			6.0
Other current assets			2.9		—			0.4			181.4		626.8			—			811.5
Current assets held for sale			—		—			—			—		15.8			—			15.8
	Total current assets		16.1		—			0.8			246.1		709.9			—			972.9
Fixed assets, net			—		—			—			—		5,270.1			—			5,270.1
Intangible assets, net			—		—			(15.0	)		—		2,546.5			—			2,531.5
Investments in, and loans to, parent and subsidiary companies			2,389.5		138.4			(641.8	)		3,336.5		(5,948.6	)		1,083.2			357.2
Other assets, net			13.0		—			—			451.3		81.5			—			545.8
	Total assets	£	2,418.6	£	138.4		£	(656.0	)	£	4,033.9	£	2,659.4		£	1,083.2		£	9,677.5
Other current liabilities		£	20.8	£	56.5		£	42.1		£	234.9	£	1,994.8		£	(740.0	)	£	1,609.1
Current liabilities held for sale			—		—			—			—		26.5			—			26.5
	Total current liabilities		20.8		56.5			42.1			234.9		2,021.3			(740.0	)		1,635.6
Long term debt			561.1		1,265.5			—			2,012.8		2,082.9			—			5,922.3
Other long term liabilities			—		—			0.8			23.2		258.9			—			282.9
Shareholders' equity			1,836.7		(1,183.6	)		(698.9	)		1,763.0		(1,703.7	)		1,823.2			1,836.7
	Total liabilities and shareholders' equity	£	2,418.6	£	138.4		£	(656.0	)	£	4,033.9	£	2,659.4		£	1,083.2		£	9,677.5

Note 11—Condensed Consolidating Financial Information—Senior Notes

We present the following condensed consolidating financial information as of September 30, 2012 and December 31, 2011 and for the three and nine months ended September 30, 2012 and 2011 as required by Rule 3-10(d) of Regulation S-X.

Virgin Media Finance PLC is the issuer of the following senior notes:


•	$850 million aggregate principal amount of 9.50% senior notes due 2016


•	€180 million aggregate principal amount of 9.50% senior notes due 2016


•	$600 million aggregate principal amount of 8.375% senior notes due 2019


•	£350 million aggregate principal amount of 8.875% senior notes due 2019


•	$500 million aggregate principal amount of 5.25% senior notes due 2022

Virgin Media Inc. and certain of its subsidiaries, namely Virgin Media Group LLC, Virgin Media Holdings Inc., Virgin Media (UK) Group, Inc. and Virgin Media Communications Limited, have guaranteed the senior notes on a senior basis. Each of Virgin Media Investment Holdings Limited, or VMIH, and Virgin Media Investments Limited, or VMIL, are conditional guarantors and have guaranteed the senior notes on a senior subordinated basis.

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 12 11—Condensed ~~Consolidated~~Consolidating Financial Information—Senior Notes (~~Continued~~continued)

			December 31, 2008
	September 30, 2012
Balance sheets	Company		~~Company~~		VirginMediaFinance	~~Virgin Media Finance~~			~~Other guarantors~~Otherguarantors			~~VMIH~~	VMIH		~~All other subsidiaries~~		VMIL	~~Adjustments~~			~~Total~~All othersubsidiaries			Adjustments			Total
			(Adjusted) (in millions)
	(in millions)
Cash and cash equivalents	£	12.3	£	~~9.9~~	£	£1.0	—		£	10.2		£	~~0.4~~£	0.0	£	~~170.1~~	£	£0.0	—		£	~~181~~99.69		£	0.0		£	113.4
Restricted cash	0.0			—	0.0		—		0.0	—			—0.0			~~6.1~~	0.0		—		1.9	~~6.1~~		0.0			1.9
Other current assets	6.3			~~3.5~~	0.0		—		0.0	~~0.3~~			~~187~~8.7			~~620.1~~	0.0		—		549.4	~~811.6~~		0.0			564.4
Current assets held for sale				—			—			—			—			56.2			—			56.2
Total current assets	18.6				1.0				0.2				8.7				0.0				651.2			0.0			679.7
	Total current assets			13.4			—			1.5			188.1			852.5			—			1,055.5
Fixed assets, net	0.0				0.0				0.0				0.0				0.0				4,546.5			0.0			4,546.5
Fixed assets, net				—			—			—			—			5,342.1			—			5,342.1
Goodwill and intangible assets, net	0.0				0.0				(15.0		)		0.0				0.0				2,032.5			0.0			2,017.5
Intangible assets, net				—			—			(15.0	)		—			2,607.6			—			2,592.6
Investments in, and loans to, parent and subsidiary companies	819.8				441.7				(672.2		)		1,767.4				2,581.7				(2,204.1		)	(2,734.3		)	0.0
Investments in, and loans to, parent and subsidiary companies				2,545.0			287.9			(487.7	)		3,519.4			(6,591.6	)		1,080.5			353.5
Other assets, net	226.2				20.4				0.2				165.7				0.0				89.8			0.0			502.3
Other assets, net				13.2			—			—			506.5			69.9			—			589.6
Total assets	£	1,064.6			£	463.1			£	(686.8	)		£	1,941.8			£	2,581.7			£	5,115.9		£	(2,734.3	)	£	7,746.0
	Total assets		£	2,571.6		£	287.9		£	(501.2	)	£	4,214.0		£	2,280.5		£	1,080.5		£	9,933.3
Current liabilities	£	27.6			£	39.9			£	3.0			£	91.6			£	0.0			£	2,010.8		£	(910.2	)	£	1,262.7
Other current liabilities			£	9.5		£	37.1		£	26.1		£	197.1		£	1,381.2		£	(171.6	)	£	1,479.4
Long-term debt, net of current portion	540.8				1,675.9				0.0				0.0				0.0				3,494.6			0.0			5,711.3
Current liabilities held for sale				—			—			—			—			36.2			—			36.2
Other long-term liabilities	0.2				0.0				0.0				101.8				0.0				174.0			0.0			276.0
	Total current liabilities			9.5			37.1			26.1			197.1			1,417.4			(171.6	)		1,515.6
Total liabilities	568.6				1,715.8				3.0				193.4				0.0				5,679.4			(910.2		)	7,250.0
Long term debt				545.9			1,256.2			—			2,064.6			2,262.9			—			6,129.6
Shareholders’ equity (deficit)	496.0				(1,252.7		)		(689.8		)		1,748.4				2,581.7				(563.5		)	(1,824.1		)	496.0
Other long term liabilities				—			—			0.7			11.5			259.7			—			271.9
Total liabilities and shareholders’ equity (deficit)	£	1,064.6			£	463.1			£	(686.8	)		£	1,941.8			£	2,581.7			£	5,115.9		£	(2,734.3	)	£	7,746.0
Shareholders' equity				2,016.2			(1,005.4	)		(528.0	)		1,940.8			(1,659.5	)		1,252.1			2,016.2
	Total liabilities and shareholders' equity		£	2,571.6		£	287.9		£	(501.2	)	£	4,214.0		£	2,280.5		£	1,080.5		£	9,933.3

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 12 11—Condensed ~~Consolidated~~Consolidating Financial Information—Senior Notes (~~Continued~~continued)

		Three months ended March 31, 2009
	December 31, 2011
Statements of operations		Company			Virgin Media Finance			Other guarantors			VMIH			All other subsidiaries			Adjustments			Total
Balance sheets	Company				VirginMediaFinance				Otherguarantors				VMIH				VMIL				All othersubsidiaries			Adjustments			Total
	(in millions)	~~(in millions)~~
Revenue		£	—		£	—		£	—		£	—		£	935.7		£	—		£	935.7
Cash and cash equivalents	£	16.2			£	1.9			£	0.3			£	0.1			£	0.0			£	281.9		£	0.0		£	300.4
Operating costs			—			—			—			—			(413.7	)		—			(413.7	)
Restricted cash	0.0				0.0				0.0				0.0				0.0				1.9			0.0			1.9
Selling, general and administrative expenses			(5.1	)		—			(0.7	)		—			(203.9	)		—			(209.7	)
Other current assets	0.3				0.0				1.0				16.3				0.0				524.3			0.0			541.9
Restructuring and other charges			—			—			—			—			(5.4	)		—			(5.4	)
Total current assets	16.5				1.9				1.3				16.4				0.0				808.1			0.0			844.2
Depreciation and amortization			—			—			—			—			(293.9	)		—			(293.9	)
Fixed assets, net	0.0				0.0				0.0				0.0				0.0				4,602.7			0.0			4,602.7
Operating income (loss)			(5.1	)		—			(0.7	)		—			18.8			—			13.0
Goodwill and intangible assets, net	0.0				0.0				(15.0		)		0.0				0.0				2,032.5			0.0			2,017.5
Interest and other income, net			11.3			38.6			35.8			19.8			137.4			(239.6	)		3.3
Investments in, and loans to, parent and subsidiary companies	1,042.2				330.2				(841.2		)		1,474.5				2,217.5				(2,902.6		)	(1,320.6		)	0.0
Interest expense			(15.4	)		(38.8	)		(29.7	)		(82.7	)		(182.0	)		239.6			(109.0	)
Other assets, net	146.1				23.5				0.0				208.4				0.0				96.4			0.0			474.4
Share of income from equity investments			—			—			—			—			2.5			—			2.5
Total assets	£	1,204.8			£	355.6			£	(854.9	)		£	1,699.3			£	2,217.5			£	4,637.1		£	(1,320.6	)	£	7,938.8
Foreign currency (losses) gains			—			(0.3	)		(0.5	)		(12.8	)		1.7			—			(11.9	)
Current liabilities	£	14.6			£	52.2			£	13.6			£	101.2			£	0.0			£	1,897.8		£	(801.6	)	£	1,277.8
Losses on derivative instruments			—			—			—			(21.2	)		—			—			(21.2	)
Long-term debt, net of current portion	551.1				1,720.3				0.0				0.0				0.0				3,507.1			0.0			5,778.5
Income tax expense			—			—			(0.1	)		(8.0	)		(1.5	)		—			(9.6	)
Other long-term liabilities	0.2				0.0				0.0				45.8				0.0				197.6			0.0			243.6
Loss from continuing operations			(9.2	)		(0.5	)		4.8			(104.9	)		(23.1	)		—			(132.9	)
Total liabilities	565.9				1,772.5				13.6				147.0				0.0				5,602.5			(801.6		)	7,299.9
Loss from discontinued operations, net of taxes			—			—			—			—			(21.1	)		—			(21.1	)
Shareholders’ equity (deficit)	638.9				(1,416.9		)		(868.5		)		1,552.3				2,217.5				(965.4		)	(519.0		)	638.9
Equity in net loss of subsidiaries			(144.8	)		(151.8	)		(149.8	)		(46.9	)		—			493.3			—
Total liabilities and shareholders’ equity (deficit)	£	1,204.8			£	355.6			£	(854.9	)		£	1,699.3			£	2,217.5			£	4,637.1		£	(1,320.6	)	£	7,938.8
Net loss		£	(154.0	)	£	(152.3	)	£	(145.0	)	£	(151.8	)	£	(44.2	)	£	493.3		£	(154.0	)

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 12 11—Condensed ~~Consolidated~~Consolidating Financial Information—Senior Notes (~~Continued~~continued)

		Three months ended March 31, 2008
	Three months ended September 30, 2012
Statements of operations		Company			Virgin Media Finance			Other guarantors			VMIH			All other subsidiaries			Adjustments			Total
Statements of comprehensive income	Company				VirginMediaFinance				Otherguarantors				VMIH				VMIL				All othersubsidiaries			Adjustments			Total
		(Adjusted) (in millions)
	(in millions)
Revenue	£	£0.0	—		£	—0.0		£	—£	0.0	£	—	£	£0.0	~~947.3~~		£	—0.0		£	~~947.3~~£	1,027.7		£	0.0		£	1,027.7
Operating costs	0.0		—		0.0	—			—0.0			—	0.0		~~(420.0~~	)	0.0	—			(~~420~~403.03	)	)	0.0			(403.3		)
Selling, general and administrative expenses	(4.1		~~(0.6~~)	)	0.0	—			(50.20	)		—	0.0		~~(198.0~~	)	0.0	—			(~~203~~197.86	)	)	0.0			(201.7		)
Restructuring and other charges	0.0		—		0.0	—			—0.0			—	0.0		~~(4.6~~	)	0.0	—			(40.68	)		0.0			0.8
Depreciation and amortization	0.0		—		0.0	—			—0.0			—	0.0		~~(320.8~~	)	0.0	—			(~~320~~243.85	)	)	0.0			(243.5		)
Operating (loss) income			(0.6	)		—			(5.2	)		—			3.9			—			(1.9	)
Operating income (loss)	(4.1		)		0.0				0.0				0.0				0.0				184.1			0.0			180.0
Interest income and other, net			—			25.5			13.1			16.9			(9.1	)		(40.5	)		5.9
Interest expense	(29.7		)		(38.8		)		(2.7		)		(83.1		)		0.0				(234.6		)	288.7			(100.2		)
Interest expense			(0.4	)		(25.5	)		(6.6	)		(82.6	)		(48.7	)		40.5			(123.3	)
Loss on extinguishment of debt	0.0				0.0				0.0				0.0				0.0				0.0			0.0			0.0
Share of income from equity investments	0.0		—		0.0	—			—0.0			—	0.0		~~5.1~~		0.0	—			50.10			0.0			0.0
Foreign currency (losses) gains			—			(0.4	)		—			(28.5	)		0.5			—			(28.4	)
Loss on disposal of equity investments	0.0				0.0				0.0				0.0				0.0				0.0			0.0			0.0
Gain on derivative instruments			—			—			—			—			33.4			—			33.4
Gain (loss) on derivative instruments	51.6				0.0				0.0				(7.6		)		0.0				0.0			0.0			44.0
Income tax benefit (expense)			—			—			(2.3	)		—			9.6			—			7.3
Foreign currency gains(losses)	0.4				(1.8		)		(1.7		)		(17.2		)		0.0				(5.8		)	26.4			0.3
Loss from continuing operations			(1.0	)		(0.4	)		(1.0	)		(94.2	)		(5.3	)		—			(101.9	)
Interest income and other, net	0.0				38.3				3.9				40.5				0.0				206.2			(288.7		)	0.2
Loss from discontinued operations, net of tax			—			—			—			—			(2.5	)		—			(2.5	)
Income tax (expense) benefit	0.0				0.0				0.1				(0.1		)		0.0				(0.4		)	0.0			(0.4		)
Equity in net loss of subsidiaries			(103.4	)		(100.2	)		(102.5	)		(6.0	)		—			312.1			—
Income (loss) from continuing operations	18.2				(2.3		)		(0.4		)		(67.5		)		0.0				149.5			26.4			123.9
Net loss		£	(104.4	)	£	(100.6	)	£	(103.5	)	£	(100.2	)	£	(7.8	)	£	312.1		£	(104.4	)
Equity in net income (loss) of subsidiaries	105.7				102.1				106.2				143.2				142.8				0.0			(600.0		)	0.0
Net income (loss)	£	123.9			£	99.8			£	105.8			£	75.7			£	142.8			£	149.5		£	(573.6	)	£	123.9
Total comprehensive income (loss)	£	115.4			£	81.8			£	89.3			£	57.7			£	143.6			£	150.3		£	(522.7	)	£	115.4

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 12 11—Condensed ~~Consolidated~~Consolidating Financial Information—Senior Notes (~~Continued~~continued)

		Three months ended March 31, 2009
	Three months ended September 30, 2011
Statements of cash flows		Company			Virgin Media Finance			Other guarantors			VMIH			All other subsidiaries			Adjustments		Total
Statements of comprehensive income	Company				VirginMediaFinance				Otherguarantors				VMIH				VMIL			All othersubsidiaries			Adjustments			Total
	(in millions)	~~(in millions)~~
Net cash provided by (used in) operating activities		£	(3.1	)	£	—		£	(1.4	)	£	75.1		£	58.6		£	—	£	129.2
Revenue	£	0.0			£	0.0			£	0.0			£	0.0			£	0.0		£	1,000.0		£	0.0		£	1,000.0
Investing activities:
Operating costs	0.0				0.0				0.0				0.0				0.0			(401.7		)	0.0			(401.7		)
Purchase of fixed and intangible assets			—			—			—			—			(144.4	)		—		(144.4	)
Selling, general and administrative expenses	(1.2		)		0.0				0.0				0.0				0.0			(198.8		)	0.0			(200.0		)
Principal repayments (drawdowns) on loans to equity investments			—			—			—			—			1.2			—		1.2
Restructuring and other charges	0.0				0.0				0.0				0.0				0.0			(6.2		)	0.0			(6.2		)
Principal repayments (drawdowns) on loans to group companies			0.6			—			0.6			(0.9	)		(0.3	)		—		—
Depreciation and amortization	0.0				0.0				0.0				0.0				0.0			(263.7		)	0.0			(263.7		)
Other			—			—			—			—			1.5			—		1.5
Operating income (loss)	(1.2		)		0.0				0.0				0.0				0.0			129.6			0.0			128.4
Net cash (used in) provided by investing activities			0.6			—			0.6			(0.9	)		(142.0	)		—		(141.7	)
Interest expense	(15.6		)		(45.4		)		(7.6		)		(90.5		)		0.0			(263.4		)	314.9			(107.6		)
Financing activities:
Loss on extinguishment of debt	0.0				(15.5		)		0.0				18.1				0.0			(20.9		)	0.0			(18.3		)
Principal payments on long term debt and capital leases			—			—			—			—			(12.4	)		—		(12.4	)
Share of income from equity investments	0.0				0.0				0.0				0.0				0.0			3.6			0.0			3.6
Intercompany funding movements			15.0			—			—			(9.9	)		(5.1	)		—		—
Loss on disposal of equity investments	0.0				0.0				0.0				0.0				0.0			(8.0		)	0.0			(8.0		)
Dividends paid			(9.0	)		—			—			—			—			—		(9.0	)
Loss on derivative instruments	(53.6		)		0.0				0.0				(3.9		)		0.0			(1.8		)	0.0			(59.3		)
Net cash (used in) provided by financing activities			6.0			—			—			(9.9	)		(17.5	)		—		(21.4	)
Foreign currency (losses) gains	0.0				1.9				(5.6		)		9.2				0.0			(18.5		)	0.0			(13.0		)
Cash flow from discontinued operations
Interest income and other, net	0.2				44.9				8.5				45.1				0.0			216.7			(314.9		)	0.5
Net cash used in operating activities			—			—			—			—			(7.9	)		—		(7.9	)
Income tax (expense) benefit	0.0				0.0				(1.2		)		0.0				0.0			1.1			0.0			(0.1		)
Net cash used in discontinued operations			—			—			—			—			(7.9	)		—		(7.9	)
(Loss) income from continuing operations	(70.2		)		(14.1		)		(5.9		)		(22.0		)		0.0			38.4			0.0			(73.8		)
Effect of exchange rates			(0.2	)		—			—			—			—			—		(0.2	)
Equity in net (loss) income of subsidiaries	(3.6		)		9.6				2.4				31.7				134.9			0.0			(175.0		)	0.0
(Decrease) increase in cash and cash equivalents			3.3			—			(0.8	)		64.3			(108.8	)		—		(42.0	)
Net (loss) income	£	(73.8	)		£	(4.5	)		£	(3.5	)		£	9.7			£	134.9		£	38.4		£	(175.0	)	£	(73.8	)
Cash and cash equivalents at beginning of period			9.9			—			1.2			0.4			170.1			—		181.6
Total comprehensive (loss) income	£	(83.8	)		£	(3.3	)		£	(3.8	)		£	10.9			£	134.4		£	37.9		£	(176.1	)	£	(83.8	)
Cash and cash equivalents at end of period		£	13.2		£	—		£	0.4		£	64.7		£	61.3		£	—	£	139.6

Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 12 11—Condensed ~~Consolidated~~Consolidating Financial Information—Senior Notes (~~Continued~~continued)

		Three months ended March 31, 2008
	Nine months ended September 30, 2012
Statements of cash flows		Company			Virgin Media Finance			Other guarantors			VMIH			All other subsidiaries			Adjustments		Total
Statements of comprehensive income	Company				VirginMediaFinance				Otherguarantors				VMIH				VMIL			All othersubsidiaries			Adjustments			Total
		(Adjusted) (in millions)
	(in millions)
Net cash provided by (used in) operating activities		£	5.7		£	—		£	3.1		£	(24.3	)	£	126.1		£	—	£	110.6
Revenue	£	0.0			£	0.0			£	0.0			£	0.0			£	0.0		£	3,060.8		£	0.0		£	3,060.8
Investing activities:
Operating costs	0.0				0.0				0.0				0.0				0.0			(1,223.4		)	0.0			(1,223.4		)
Purchase of fixed and intangible assets			—			—			—			—			(124.4	)		—		(124.4	)
Selling, general and administrative expenses	(11.6		)		0.0				0.0				0.0				0.0			(614.5		)	0.0			(626.1		)
Principal (drawdowns) repayments on loans to equity investments			—			—			0.9			31.2			(37.0	)		—		(4.9	)
Restructuring and other charges	0.0				0.0				0.0				0.0				0.0			(4.1		)	0.0			(4.1		)
Other			—			—			—			—			0.3			—		0.3
Depreciation and amortization	0.0				0.0				0.0				0.0				0.0			(716.7		)	0.0			(716.7		)
Net cash (used in) provided by investing activities			—			—			0.9			31.2			(161.1	)		—		(129.0	)
Operating income (loss)	(11.6		)		0.0				0.0				0.0				0.0			502.1			0.0			490.5
Financing activities:
Interest expense	(82.2		)		(121.7		)		(8.1		)		(257.6		)		0.0			(714.4		)	879.6			(304.4		)
Proceeds from employee stock option excercises			0.6			—			—			—			—			—		0.6
Loss on extinguishment of debt	0.0				(58.6		)		0.0				0.0				0.0			0.0			0.0			(58.6		)
Principal payments on long term debt and capital leases			—			—			—			—			(8.8	)		—		(8.8	)
Gain (loss) on derivative instruments	91.5				0.0				0.0				(23.6		)		0.0			0.0			0.0			67.9
Dividends paid			(6.6	)		—			—			—			—			—		(6.6	)
Foreign currency (losses) gains	0.0				(7.7		)		(6.0		)		(25.4		)		0.0			2.1			31.5			(5.5		)
Net cash used in financing activities			(6.0	)		—			—			—			(8.8	)		—		(14.8	)
Interest income and other, net	0.0				124.6				11.6				137.2				0.0			612.7			(879.6		)	6.5
Cash flow from discontinued operations
Income tax expense (benefit)	0.0				0.0				0.1				(0.3		)		0.0			(0.6		)	0.0			(0.8		)
Net cash used in operating activities			—			—			—			—			(5.3	)		—		(5.3	)
Income (loss) from continuing operations	(2.3		)		(63.4		)		(2.4		)		(169.7		)		0.0			401.9			31.5			195.6
Net cash used in investing activities			—			—			—			—			(0.6	)		—		(0.6	)
Equity in net income (loss) of subsidiaries	197.9				246.7				200.3				384.9				383.3			0.0			(1,413.1		)	0.0
Net cash used in discontinued operations			—			—			—			—			(5.9	)		—		(5.9	)
Net income (loss)	£	195.6			£	183.3			£	197.9			£	215.2			£	383.3		£	401.9		£	(1,381.6	)	£	195.6
(Decrease) increase in cash and cash equivalents			(0.3	)		—			4.0			6.9			(49.7	)		—		(39.1	)
Total comprehensive income (loss)	£	188.8			£	164.1			£	180.7			£	196.0			£	385.5		£	404.1		£	(1,330.4	)	£	188.8
Cash and cash equivalents at beginning of period			1.3			—			10.0			0.7			309.4			—		321.4
Cash and cash equivalents at end of period		£	1.0		£	—		£	14.0		£	7.6		£	259.7		£	—	£	282.3

Table of Contents

VIRGIN MEDIA ~~INVESTMENT HOLDINGS LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in millions, except per share data)~~ INC.

		March 31, 2009			December 31, 2008
					(Adjusted)
Assets
Current assets
	Cash and cash equivalents	£	126.0		£	170.7
	Restricted cash		5.3			5.3
	Accounts receivable—trade, less allowances for doubtful accounts of £17.0 (2009) and £16.5 (2008)		449.0			454.3
	Inventory		106.0			81.1
	Derivative financial instruments		167.1			168.4
	Prepaid expenses and other current assets		86.2			104.0
	Current assets held for sale		15.8			56.2
Total current assets			955.4			1,040.0
Fixed assets, net			5,139.9			5,209.3
Goodwill and other indefinite-lived assets			2,091.4			2,091.4
Intangible assets, net			449.2			510.3
Equity investments			357.2			353.5
Derivative financial instruments			401.6			435.7
Other assets, net of accumulated amortization of £86.6 (2009) and £78.0 (2008)			131.1			140.7
Due from group companies			817.9			795.0
Total assets		£	10,343.7		£	10,575.9
Liabilities and shareholders' equity
Current liabilities
	Accounts payable	£	332.6		£	370.0
	Accrued expenses and other current liabilities		415.6			443.4
	Derivative financial instruments		92.3			84.4
	VAT and employee taxes payable		67.1			57.4
	Restructuring liabilities		62.5			69.5
	Interest payable		38.7			95.9
	Interest payable to group companies		159.9			113.7
	Deferred revenue		261.7			259.4
	Current portion of long term debt		257.7			40.5
	Current liabilities held for sale		26.5			36.2
	Total current liabilities		1,714.6			1,570.4
Long term debt, net of current portion			4,095.8			4,327.6
Long term debt due to group companies			2,490.2			2,468.1
Derivative financial instruments			50.7			42.6
Deferred revenue and other long term liabilities			148.7			147.2
Deferred income taxes			80.7			79.2
Total liabilities			8,580.7			8,635.1
Commitments and contingent liabilities
Shareholders' equity
	Common stock—£0.001 par value; authorized 1,000,000 ordinary shares (2009 and 2008); issued and outstanding 224,552 ordinary shares (2009 and 2008)		—			—
	Additional paid-in capital		4,371.3			4,371.3
	Accumulated other comprehensive (loss)/income		(17.0	)		9.0
	Accumulated deficit		(2,591.3	)		(2,439.5	)
	Total shareholders' equity		1,763.0			1,940.8
Total liabilities and shareholders' equity		£	10,343.7		£	10,575.9

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~See accompanying notes.~~ (unaudited)

Note 11—Condensed Consolidating Financial Information—Senior Notes (continued)



	Nine months ended September 30, 2011
Statements of comprehensive income	Company			Virgin Media Finance			Other guarantors			VMIH			VMIL		All other subsidiaries			Adjustments			Total
	(in millions)
Revenue	£	0.0		£	0.0		£	0.0		£	0.0		£	0.0	£	2,968.1		£	0.0		£	2,968.1
Operating costs	0.0			0.0			0.0			0.0			0.0		(1,202.7		)	0.0			(1,202.7		)
Selling, general and administrative expenses	(9.4		)	0.0			0.0			0.0			0.0		(589.5		)	0.0			(598.9		)
Restructuring and other charges	0.0			0.0			0.0			0.0			0.0		(7.7		)	0.0			(7.7		)
Depreciation and amortization	0.0			0.0			0.0			0.0			0.0		(784.9		)	0.0			(784.9		)
Operating income (loss)	(9.4		)	0.0			0.0			0.0			0.0		383.3			0.0			373.9
Interest expense	(44.9		)	(142.4		)	(29.1		)	(288.1		)	0.0		(785.1		)	954.3			(335.3		)
Loss on extinguishment of debt	0.0			(15.5		)	0.0			0.0			0.0		(31.7		)	0.0			(47.2		)
Share of income from equity investments	0.0			0.0			0.0			0.0			0.0		18.6			0.0			18.6
Loss on disposal of equity investments	0.0			0.0			0.0			0.0			0.0		(8.0		)	0.0			(8.0		)
Loss on derivative instruments	(38.8		)	0.0			0.0			0.0			0.0		(1.7		)	0.0			(40.5		)
Foreign currency gains (losses)	(0.3		)	0.0			0.7			0.0			0.0		0.4			0.0			0.8
Interest income and other, net	3.6			142.5			32.1			129.6			0.0		730.3			(954.3		)	83.8
Income tax (expense) benefit	0.0			0.0			(1.2		)	(23.3		)	0.0		7.3			0.0			(17.2		)
Income (loss) from continuing operations	(89.8		)	(15.4		)	2.5			(181.8		)	0.0		313.4			0.0			28.9
Loss on discontinued operations, net of tax	0.0			0.0			0.0			0.0			0.0		(1.2		)	0.0			(1.2		)
Equity in net income (loss) of subsidiaries	117.5			110.0			115.1			291.8			408.7		0.0			(1,043.1		)	0.0
Net income (loss)	£	27.7		£	94.6		£	117.6		£	110.0		£	408.7	£	312.2		£	(1,043.1	)	£	27.7
Total comprehensive income (loss)	£	(6.3	)	£	72.4		£	95.0		£	87.8		£	431.5	£	335.0		£	(1,021.7	)	£	(6.3	)

Table of Contents

VIRGIN MEDIA ~~INVESTMENT HOLDINGS LIMITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in millions)~~ INC.

			Three months ended March 31,
			2009			2008
						(Adjusted)
Revenue			£	907.6		£	919.9
Costs and expenses
	Operating costs (exclusive of depreciation shown separately below)			400.3			407.1
	Selling, general and administrative expenses			197.3			191.4
	Restructuring and other charges			5.1			4.5
	Depreciation			227.5			225.3
	Amortization			61.2			88.0
				891.4			916.3
Operating income				16.2			3.6
Other income (expense)
	Interest income and other, net			3.3			5.8
	Interest income from group companies			2.1			1.9
	Interest expense			(65.3	)		(99.4	)
	Interest expense to group companies			(47.7	)		(29.7	)
	Share of income from equity investments			2.5			5.1
	Foreign currency losses			(11.1	)		(28.0	)
	Gains (losses) on derivative instruments			(21.2	)		33.4
Loss from continuing operations before income taxes				(121.2	)		(107.3	)
Income tax (expense) benefit				(9.5	)		9.6
	Loss from continuing operations			(130.7	)		(97.7	)
Discontinued operations
		Loss from discontinued operations, net of tax		(21.1	)		(2.5	)
Net loss			£	(151.8	)	£	(100.2	)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~See accompanying notes.~~ (unaudited)

Note 11—Condensed Consolidating Financial Information—Senior Notes (continued)



	Nine months ended September 30, 2012
Statements of cash flows	Company			Virgin Media Finance			Other guarantors			VMIH			VMIL		All other subsidiaries			Adjustments		Total
	(in millions)
Net cash provided by (used in) operating activities	£	(66.2	)	£	(48.5	)	£	(4.9	)	£	(136.3	)	£	0.0	£	1,063.5		£	0.0	£	807.6
Investing activities:
Purchase of fixed and intangible assets	0.0			0.0			0.0			0.0			0.0		(572.4		)	0.0		(572.4		)
Proceeds from sale of fixed assets	0.0			0.0			0.0			0.0			0.0		2.1			0.0		2.1
Principal drawdowns (repayments) on loans to group companies	415.3			45.9			4.8			133.9			0.0		(599.9		)	0.0		0.0
Acquisitions, net of cash	0.0			0.0			0.0			0.0			0.0		(0.6		)	0.0		(0.6		)
Disposal of equity investments, net	0.0			0.0			0.0			0.0			0.0		(2.5		)	0.0		(2.5		)
Net cash (used in) provided by investing activities	415.3			45.9			4.8			133.9			0.0		(1,173.3		)	0.0		(573.4		)
Financing activities:
New borrowings, net of financing fees	0.0			315.8			0.0			100.0			0.0		(0.2		)	0.0		415.6
Repurchase of common stock	(330.2		)	0.0			0.0			0.0			0.0		0.0			0.0		(330.2		)
Proceeds from employee stock option exercises, net of taxes reimbursed	(0.6		)	0.0			0.0			0.0			0.0		0.0			0.0		(0.6		)
Principal payments on long term debt and capital leases	0.0			(314.1		)	0.0			(100.0		)	0.0		(72.0		)	0.0		(486.1		)
Proceeds from settlement of cross-currency swaps	0.0			0.0			0.0			2.3			0.0		0.0			0.0		2.3
Dividends paid	(20.7		)	0.0			0.0			0.0			0.0		0.0			0.0		(20.7		)
Net cash (used in) provided by financing activities	(351.5		)	1.7			0.0			2.3			0.0		(72.2		)	0.0		(419.7		)
Effect of exchange rates on cash and cash equivalents	(1.5		)	0.0			0.0			0.0			0.0		0.0			0.0		(1.5		)
Decrease in cash and cash equivalents	(3.9		)	(0.9		)	(0.1		)	(0.1		)	0.0		(182.0		)	0.0		(187.0		)
Cash and cash equivalents at beginning of period	16.2			1.9			0.3			0.1			0.0		281.9			0.0		300.4
Cash and cash equivalents at end of period	£	12.3		£	1.0		£	0.2		£	0.0		£	0.0	£	99.9		£	0.0	£	113.4

Table of Contents

VIRGIN MEDIA ~~INVESTMENT HOLDINGS LIMITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in millions)~~ INC.

			Three months ended March 31,
			2009			2008
						(Adjusted)
Operating activities
Net loss			£	(151.8	)	£	(100.2	)
Loss from discontinued operations				21.1			2.5
Loss from continuing operations				(130.7	)		(97.7	)
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities
	Depreciation and amortization			288.7			313.3
	Non-cash interest			(52.7	)		(34.5	)
	Non-cash compensation			4.0			1.5
	Income from equity accounted investments, net of dividends received			(2.5	)		(4.4	)
	Income taxes			9.8			(8.3	)
	Amortization of original issue discount and deferred finance costs			8.6			5.5
	Unrealized foreign currency losses			14.2			26.9
	Unrealized losses (gains) on derivative instruments			23.2			(33.4	)
	Other			(1.3	)		0.1
Changes in operating assets and liabilities				(63.7	)		(81.8	)
		Net cash provided by operating activities		97.6			87.2
Investing activities
	Purchase of fixed and intangible assets			(141.9	)		(122.9	)
	Principal repayments (drawdowns) on loans to equity investments			1.2			(4.9	)
	Investments in, and loans from, parent and subsidiary companies			17.1			12.3
	Other			1.5			0.3
		Net cash used in investing activities		(122.1	)		(115.2	)
Financing activities
	Principal payments on long term debt and capital leases			(12.4	)		(8.8	)
		Net cash used in financing activities		(12.4	)		(8.8	)
Cash flow from discontinued operations
	Net cash used in operating activities			(7.9	)		(5.3	)
	Net cash used in investing activities			—			(0.6	)
		Net cash used in discontinued operations		(7.9	)		(5.9	)
Effect of exchange rate changes on cash and cash equivalents				0.1			—
Decrease in cash and cash equivalents				(44.7	)		(42.7	)
Cash and cash equivalents, beginning of period				170.7			310.0
Cash and cash equivalents, end of period			£	126.0		£	267.3

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~See accompanying notes.~~ (unaudited)

Note 11—Condensed Consolidating Financial Information—Senior Notes (continued)



	Nine months ended September 30, 2011
Statements of cash flows	Company			Virgin Media Finance			Other guarantors			VMIH			VMIL		All other subsidiaries			Adjustments		Total
	(in millions)
Net cash provided by (used in) operating activities	£	(20.2	)	£	(16.7	)	£	0.3		£	44.9		£	0.0	£	846.4		£	0.0	£	854.7
Investing activities:
Purchase of fixed and intangible assets	0.0			0.0			0.0			0.0			0.0		(479.3		)	0.0		(479.3		)
Proceeds from sale of fixed assets	0.0			0.0			0.0			0.0			0.0		1.5			0.0		1.5
Principal repayments on loans to equity investments	0.0			0.0			0.0			0.0			0.0		108.2			0.0		108.2
Principal drawdowns (repayments) on loans to group companies	388.7			357.2			0.1			(104.2		)	0.0		(641.8		)	0.0		0.0
Acquisitions, net of cash	0.0			0.0			0.0			0.0			0.0		(14.6		)	0.0		(14.6		)
Disposal of equity investments, net	0.0			0.0			0.0			0.0			0.0		241.0			0.0		241.0
Other	0.0			0.0			0.0			0.0			0.0		2.5			0.0		2.5
Net cash (used in) provided by investing activities	388.7			357.2			0.1			(104.2		)	0.0		(782.5		)	0.0		(140.7		)
Financing activities:
New borrowings, net of financing fees	0.0			0.0			0.0			(10.4		)	0.0		987.6			0.0		977.2
Repurchase of common stock	(447.0		)	0.0			0.0			0.0			0.0		0.0			0.0		(447.0		)
Proceeds from employee stock option exercises, net of taxes reimbursed	14.4			0.0			0.0			0.0			0.0		0.0			0.0		14.4
Principal payments on long term debt and capital leases	0.0			(340.4		)	0.0			0.0			0.0		(988.0		)	0.0		(1,328.4		)
Proceeds from settlement of cross currency swaps	0.0			0.0			0.0			65.5			0.0		0.0			0.0		65.5
Dividends paid	(23.7		)	0.0			0.0			0.0			0.0		0.0			0.0		(23.7		)
Net cash used in financing activities	(456.3		)	(340.4		)	0.0			55.1			0.0		(0.4		)	0.0		(742.0		)
Cash flow from discontinued operations:
Net cash used in operating activities	0.0			0.0			0.0			0.0			0.0		(10.4		)	0.0		(10.4		)
Net cash used in discontinued operations	0.0			0.0			0.0			0.0			0.0		(10.4		)	0.0		(10.4		)
Effect of exchange rates on cash and cash equivalents	(2.4		)	0.0			(0.4		)	0.0			0.0		0.0			0.0		(2.8		)
(Decrease) increase in cash and cash equivalents	(90.2		)	0.1			0.0			(4.2		)	0.0		53.1			0.0		(41.2		)

Table of Contents

VIRGIN MEDIA ~~INVESTMENT HOLDINGS LIMITED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)~~ INC.

NOTES ~~Note 1—Basis~~TO ofTHE ~~Presentation~~ CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~Virgin Media Investment Holdings Limited, or VMIH, is an indirect, wholly owned subsidiary of Virgin Media Inc.~~ (unaudited)

~~The accompanying~~Note 11—Condensed ~~unaudited~~Consolidating ~~condensed~~Financial ~~consolidated~~Information—Senior ~~financial~~Notes statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the rules and regulations of the Securities and Exchange Commission, or SEC. Accordingly, they do not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (~~consisting of normal recurring accruals~~continued) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. For further information, refer to the consolidated financial statements and notes thereto included in Virgin Media's annual report on Form 10-K for the year ended December 31, 2008, as filed with the SEC on February 26, 2009.

The 2008 financial information has been adjusted so the basis of presentation is consistent with that of the 2009 financial information. The adjustments reflect the financial condition and results of operations of our sit-up reporting unit as assets and liabilities available for sale and discontinued operations, respectively, in the periods presented.



Cash and cash equivalents at beginning of period	£	101.3	£	1.8	£	0.4	£	4.5	£	0.0	£	371.5	£	0.0	£	479.5
Cash and cash equivalent sat end of period	£	11.1	£	1.9	£	0.4	£	0.3	£	0.0	£	424.6	£	0.0	£	438.3

Note 2—Discontinued Operations

On April 1, 2009, we reached an agreement to sell our sit-up reporting unit, which was formerly included within our Content segment. sit-up provided a variety of retail consumer products through three interactive auction-based television channels: price-drop tv, bid tv and speed auction tv.

In accordance with the provisions of FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, or FAS 144, we determined that the planned sale of the sit-up business met the requirements as of March 31, 2009 to be reflected as assets and liabilities held for sale and discontinued operations in both the current and prior periods and accordingly, we adjusted the balance sheet as of December 31, 2008 and statement of operations for the three months ended March 31, 2008. Revenue of the sit-up business, reported in discontinued operations, for the three months ended March 31, 2009 and 2008 was £38.9 million and £55.0 million, respectively. sit-up's pre-tax loss, reported within discontinued operations, for the three months ended March 31, 2009 and 2008 was £21.1 million and £2.5 million, respectively. In accordance with the provisions of FAS 144, we wrote down the assets held for sale to fair value, resulting in a £19.0 million impairment charge, which is included in the loss from discontinued operations for the three months ended March 31, 2009.

Table of Contents

VIRGIN MEDIA ~~INVESTMENT HOLDINGS LIMITED~~ INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 212—~~Discontinued~~Condensed ~~Operations~~Consolidating ~~(Continued)~~Financial Information—Senior Secured Notes

~~The assets~~We ~~and~~present ~~liabilities~~the offollowing ~~the~~condensed ~~sit-up~~consolidating ~~business~~financial ~~reported~~information as ~~held~~of September 30, 2012 and December 31, 2011 and for ~~sale~~the asthree ofand ~~March~~nine months ended September 3130, ~~2009~~2012 ~~included~~and ~~(in~~2011 as required by Rule ~~millions~~3-10(d): of Regulation S-X. Virgin Media Secured Finance PLC is the issuer of the following senior secured notes:

Current assets held for sale
	Accounts receivable, net		£	2.6
	Inventory			5.4
	Prepaid expenses			4.1
	Other current assets			3.7
		Current assets held for sale	£	15.8
Current liabilities held for sale
	Accounts payable		£	18.6
	Accrued expenses			7.2
	Deferred revenue and other liabilities			0.7
		Current liabilities held for sale	£	26.5


•	£875 million aggregate principal amount of 7.00% senior notes due 2018

~~In accordance~~• ~~with the sale agreement, part of the consideration included a loan note from Aurelius AG. On April~~ $1,000 ~~2009,~~million weaggregate ~~entered~~principal ~~into~~amount ~~a five-year carriage agreement with sit-up for continued distribution~~ of ~~the three sit-up channels on our television platform~~6.50% Insenior ~~general,~~notes ~~the~~due agreements governing the loan note and exchange of services between us and sit-up are for specified periods at commercial rates. Following the sale, our continuing involvement with sit-up is limited to the loan note and carriage agreement and is therefore not considered significant. 2018


•	£650 million aggregate principal amount of 5.50% senior notes due 2021


•	$500 million aggregate principal amount of 5.25% senior notes due 2021



	September 30, 2012
Balance sheets	Company		Virgin Media Secured Finance		Guarantors		Non- Guarantors		Adjustments		Total
	(in millions)
Cash and cash equivalents	£	12.3	£	0.0	£	96.9	£	4.2	£	0.0	£	113.4
Restricted cash	0.0		0.0		1.0		0.9		0.0		1.9
Other current assets

Large accelerated filer

Accelerated filer

Non-accelerated filer

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Smaller reporting company

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