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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



Form 10-Q

ý

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31, 2010ORo

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)

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)


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

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 o

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 o    No o

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):

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o (Do not check if a smaller
reporting company)

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

As of May 4, 2010, there were 330,760,982 shares of the registrant's common stock, par value $0.01 per share, issued and outstanding, excluding 1,192,500
unvested shares of restricted stock held in escrow.

The
Additional Registrant meets the conditions set forth in General Instruction H(1)(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.



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VIRGIN MEDIA INC.  FORM 10-Q  QUARTER ENDED MARCH 31, 2010  INDEX



PagePART IFINANCIAL INFORMATION

5Item 1. Financial Statements

5Virgin Media Inc.Condensed Consolidated Balance SheetsMarch 31, 2010 and December 31, 2009

5Condensed Consolidated Statements of OperationsThree Months ended March 31, 2010 and
2009

6Condensed Consolidated Statements of Cash FlowsThree Months ended March 31, 2010 and
2009

7Notes to Condensed Consolidated Financial Statements

8Virgin Media Investment Holdings LimitedCondensed Consolidated Balance SheetsMarch 31, 2010 and December 31, 2009

29Condensed Consolidated Statements of OperationsThree Months ended March 31, 2010 and
2009

30Condensed Consolidated Statements of Cash FlowsThree Months ended March 31, 2010 and
2009

31Virgin Media Investments LimitedCondensed Consolidated Balance SheetsMarch 31, 2010 and December 31, 2009

32Condensed Consolidated Statements of OperationsThree Months ended March 31, 2010 and
2009

33Condensed Consolidated Statements of Cash FlowsThree Months ended March 31, 2010 and
2009

34Virgin Media Investment Holdings Limited and Virgin Media Investments LimitedCombined Notes to Condensed Consolidated Financial Statements

35Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

51Item 3. Quantitative and Qualitative Disclosures about Market
Risk

73Item 4. Controls and Procedures

75PART IIOTHER INFORMATION

76Item 1. Legal Proceedings

76Item 1A. Risk Factors

76Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

76Item 3. Defaults Upon Senior Securities

76Item 4. (Removed and Reserved)

76Item 5. Other Information

76Item 6. Exhibits

77SIGNATURES

80




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).

2

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Table of Contents

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995

Various statements contained in this document constitute "forward-looking statements" as that term is defined under the Private
Securities Litigation Reform Act of 1995. Words like "believe," "anticipate," "should," "intend," "plan," "will," "expects," "estimates," "projects," "positioned," "strategy," and similar expressions
identify these forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance 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:



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, 2009,
or the 2009 Annual Report, as filed with the U.S. Securities and Exchange Commission, or SEC, on February 26, 2010. 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

This quarterly report on Form 10-Q (excepting separate financial statements responsive to Part I,
Item 1) covers Virgin Media, VMIL and VMIH, a company incorporated in England and Wales, with its registered office at 160 Great Portland Street, London W1W 5QA, United Kingdom, that is
a wholly owned subsidiary of Virgin Media Finance PLC, or Virgin Media Finance, and a wholly owned indirect subsidiary of Virgin Media Inc. VMIH is not an accelerated filer. VMIH is a
guarantor of the unsecured senior notes issued by Virgin Media Finance. VMIH's guarantee of these notes is not deemed to be unconditional. VMIH is also a guarantor of the senior secured notes issued
by Virgin Media Secured Finance PLC in January 2010. VMIH carries on the same business as Virgin Media, and is the principal borrower under Virgin Media's senior credit
facility. Unless otherwise indicated, the discussion contained in this report applies to VMIH as well as Virgin Media and VMIL.

3

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Table of Contents

Note Concerning Virgin Media Investments Limited

VMIL was 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 Finance, on the same terms as VMIH. As VMIL's guarantees are not deemed to be unconditional, separate
financial statements for VMIL with notes to the financial statements combined with those of VMIH have been included in this quarterly report pursuant to the rules and regulations of the SEC. VMIL is
not a registrant of this quarterly report on Form 10-Q. Unless otherwise indicated, the discussion contained in this report applies to VMIL as well as Virgin Media and VMIH.

Financial Information and Currency of Financial Statements

All of the financial statements included 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 our consolidated financial statements is U.K. pounds sterling.

4

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Table of Contents



PART IFINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

VIRGIN MEDIA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except par value)

March 31,
2010

December 31,
2009(unaudited)AssetsCurrent assetsCash and cash equivalents

£
420.7

£
430.5Restricted cash


6.0


6.0Accounts receivabletrade, less allowances for doubtful accounts of £10.9 (2010) and £9.6 (2009)


420.3


427.9Inventory for resale


15.5


12.9Programming inventory


88.1


62.1Derivative financial instruments


5.2


2.2Prepaid expenses and other current assets


95.6


100.8Total current assets


1,051.4


1,042.4Fixed assets, net


4,982.6


5,049.2Goodwill and other indefinite-lived assets


2,071.6


2,071.9Intangible assets, net


228.8


265.9Equity investments


359.4


359.9Derivative financial instruments


296.6


235.1Deferred financing, net of accumulated amortization of £174.4 (2010) and £136.1 (2009)


94.9


112.2Other assets


50.9


50.8Total assets

£
9,136.2

£
9,187.4Liabilities and shareholders' equityCurrent liabilitiesAccounts payable

£
340.6

£
375.5Accrued expenses and other current liabilities


367.5


420.1Derivative financial instruments


3.4


17.8Restructuring liabilities


51.3


57.3VAT and employee taxes payable


93.5


67.6Interest payable


127.4


126.6Deferred revenue


292.5


284.7Current portion of long term debt


41.7


41.2Total current liabilities


1,317.9


1,390.8Long term debt, net of current portion


6,105.2


5,933.5Derivative financial instruments


106.7


106.8Deferred revenue and other long term liabilities


182.2


182.0Deferred income taxes


84.2


83.0Total liabilities


7,796.2


7,696.1Commitments and contingent liabilitiesShareholders' equityCommon stock$0.01 par value; authorized 1,000.0 (2010 and 2009) shares; issued 331.7 (2010) and 330.8 (2009) and outstanding 330.5 (2010) and 329.4
(2009) shares


1.8


1.8Additional paid-in capital


4,496.0


4,483.2Accumulated other comprehensive income


27.6


22.5Accumulated deficit


(3,185.4
)

(3,016.2
)Total shareholders' equity


1,340.0


1,491.3Total liabilities and shareholders' equity

£
9,136.2

£
9,187.4


See accompanying notes.

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Table of Contents

VIRGIN MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

Three months ended
March 31,2010

2009Revenue

£
963.2

£
935.7Costs and expensesOperating costs (exclusive of depreciation shown separately below)


399.1


413.7Selling, general and administrative expenses


207.7


209.7Restructuring and other charges


0.4


5.4Depreciation


242.9


232.7Amortization


37.1


61.2887.2


922.7Operating income


76.0


13.0Other income (expense)Interest income and other, net


1.1


3.3Interest expense


(123.3
)

(109.0
)Loss on extinguishment of debt


(32.9
)

Share of income from equity investments


7.6


2.5Loss on derivative instruments


(21.0
)

(21.2
)Foreign currency loss


(69.8
)

(11.9
)Loss from continuing operations before income taxes


(162.3
)

(123.3
)Income tax benefit (expense)


1.9


(9.6
)Loss from continuing operations


(160.4
)

(132.9
)Discontinued operationsLoss from discontinued operations, net of tax





(21.1
)Net loss

£
(160.4
)
£
(154.0
)Basic and diluted loss from continuing operations percommon share

£
(0.49
)
£
(0.41
)Basic and diluted loss from discontinued operations percommon share

£


£
(0.06
)Basic and diluted net loss per common share

£
(0.49
)
£
(0.47
)Dividends per share (in U.S. dollars)

$
0.04

$
0.04Average number of shares outstanding


329.7


328.2


See accompanying notes.

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Table of Contents

VIRGIN MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in millions)

Three months ended March 31,2010

2009Operating activities:Net loss

£
(160.4
)
£
(154.0
)Loss from discontinued operations





21.1Loss from continuing operations


(160.4
)

(132.9
)Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities:Depreciation and amortization


280.0


293.9Non-cash interest


5.6


(26.8
)Non-cash compensation


7.3


4.7Loss on extinguishment of debt


32.8


Income from equity accounted investments, net of dividends received


(4.1
)

(2.5
)Unrealized losses on derivative instruments


46.5


23.2Unrealized foreign currency losses


34.1


16.4Income taxes


(0.6
)

9.9Amortization of original issue discount and deferred finance costs


5.3


9.1Gain on disposal of assets


(0.7
)

Other


1.1


(1.3
)Changes in operating assets and liabilities, net of effect from business acquisitions and dispositions:


(59.7
)

(64.5
)Net cash provided by operating activities


187.2


129.2Investing activities:Purchase of fixed and intangible assets


(181.5
)

(144.4
)Principal repayments on loans to equity investments


1.2


1.2Other


1.0


1.5Net cash used in investing activities


(179.3
)

(141.7
)Financing activities:New borrowings, net of financing fees


1,447.8


Proceeds from employee stock option exercises


5.6


Principal payments on long term debt, including redemption premiums, and capital leases


(1,464.9
)

(12.4
)Dividends paid


(8.8
)

(9.0
)Net cash used in financing activities


(20.3
)

(21.4
)Cash flow from discontinued operations:Net cash used in operating activities





(7.9
)Net cash used in discontinued operations





(7.9
)Effect of exchange rate changes on cash and cash equivalents


2.6


(0.2
)Decrease in cash and cash equivalents


(9.8
)

(42.0
)Cash and cash equivalents, beginning of period


430.5


181.6Cash and cash equivalents, end of period

£
420.7

£
139.6Supplemental disclosure of cash flow informationCash paid during the period for interest exclusive of amounts capitalized

£
109.0

£
131.6


See accompanying notes.

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VIRGIN MEDIA INC.

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. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of
normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2010 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2010. For further information, refer to the consolidated financial statements and notes thereto included in Virgin
Media Inc.'s annual report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on February 26, 2010, or the 2009 Annual Report.

Note 2Recent Accounting Pronouncements

In September 2009, the Financial Accounting Standards Board, or FASB, ratified new accounting guidance for existing multiple-element revenue arrangements. The revised multiple-element
revenue arrangements guidance will be effective for the first annual reporting period beginning on or after June 15, 2010 and may be applied retrospectively for all periods presented or
prospectively to arrangements entered into or materially modified after the adoption date. Early adoption is permitted provided that the revised guidance is retroactively applied to the beginning of
the year of adoption. We have not yet adopted the provisions of this guidance and are evaluating the impact on our consolidated financial statements.

In
January 2010, the FASB issued new guidance for fair value measurements and disclosures. The guidance improves disclosures about fair value measurements by requiring a greater level of
disaggregated information and more robust disclosures about valuation techniques and inputs to fair value measurements. In addition, the guidance requires separate disclosure of amounts of significant
transfers in and out of Levels 1 and 2 of the fair value hierarchy and a reconciliation of fair value measurements using significant unobservable inputs (Level 3 of the fair value
hierarchy). The adoption of this standard did not have a material impact on our consolidated financial statements.

In
February 2010, the FASB issued new guidance for the disclosure of subsequent events. As a result of this guidance, we are no longer required to disclose the date through which we have
evaluated subsequent events in the financial statements. We have adopted the provisions of this guidance.

In
April 2010, the FASB issued new guidance for employee share-based payment awards. The guidance clarifies that share-based payment awards with an exercise price denominated in the
currency of a market in which a substantial portion of an entity's equity securities trades, should not be classified as a liability if they otherwise qualify as equity. The new guidance is effective
for fiscal years and interim periods beginning on or after December 15, 2010. While we are still evaluating the impact of the adoption of this guidance, we do not expect it to have a material
impact on our consolidated financial statements.

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VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 3Long Term Debt

Long term debt consisted of (in millions):

March 31,
2010

December 31,
2009Secured ObligationsU.S. Dollar6.50% U.S. dollar senior secured notes due 2018

£
648.7

£
Senior credit facility


181.7


275.3EuroSenior credit facility


267.1


356.5Sterling7.00% sterling senior secured notes due 2018


862.1


Senior credit facility


1,190.8


2,481.0Unsecured ObligationsU.S. Dollar8.75% U.S. dollar senior notes due 2014


58.8


55.39.125% U.S. dollar senior notes due 2016


362.2


340.26.50% U.S. dollar convertible senior notes due 2016


540.2


504.59.50% U.S. dollar senior notes due 2016


864.0


810.98.375% U.S. dollar senior notes due 2019


388.8


365.1Euro8.75% euro senior notes due 2014


42.1


41.99.50% euro senior notes due 2016


153.8


152.9Sterling9.75% sterling senior notes due 2014


78.8


78.88.875% sterling senior notes due 2019


344.5


344.5Other Secured ObligationsCapital leases


162.2


166.6Other


1.1


1.26,146.9


5,974.7Less: current portion


(41.7
)

(41.2
)£6,105.2


£5,933.5


The effective interest rate on the senior credit facility was 5.6% and 5.3% as at March 31, 2010 and December 31, 2009,
respectively.

On
January 19, 2010, our wholly owned subsidiary Virgin Media Secured Finance PLC issued $1.0 billion aggregate principal amount of 6.50% senior secured notes due
2018 and £875 million aggregate principal amount of 7.00% senior secured notes due 2018. Interest is payable on June 15 and December 15 each year, beginning on
June 15, 2010. The senior secured notes due 2018 rank pari passu with our senior credit facility and, subject to certain exceptions, share in the same guarantees and security which have been
granted in favor of our senior credit facility. We used the net proceeds to make repayments totaling £1,453.0 million under our senior credit facility.

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Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 3Long Term Debt (Continued)

On
April 19, 2010, we drew down an aggregate principal amount of £1,675.0 million under our new senior credit facility dated March 16, 2010, as amended
and restated, or the new senior credit facility, and applied the proceeds towards the repayment of all amounts outstanding under our old senior credit facility and for general corporate purposes. The
new senior credit facility comprises a term loan A facility in an aggregate principal amount of £1,000 million, a term loan B facility in an aggregate principal amount of
£675 million and a revolving credit facility in aggregate principal amount of £250 million. We also utilized £20.4 million of the new revolving
credit facility for bank guarantees and standby letters of credit.

On
April 12, 2010, Virgin Media Finance PLC, or Virgin Media Finance, issued redemption notices to the holders of our senior notes due 2014 pursuant to which we will redeem
the full outstanding principal amount of these notes plus accrued interest on May 12, 2010. The redemption price will be 102.917% of the principal amount of the notes denominated in U.S.
dollars and euros and 103.250% of the principal amount of the notes denominated in sterling. The estimated cost of redemption of these notes, inclusive of the cost to unwind derivative contracts
entered in to as economic hedges of these notes, is £193.9 million.

Long
term debt repayments, excluding capital leases, as of March 31, 2010, were due as follows (in millions):

Period ending March 31:2011

£
0.42012


0.42013


1,639.92014


2015


179.8Thereafter


4,345.1Total debt payments


£6,165.6


Following the repayments made on April 19, 2010, there were no outstanding amounts under our old senior credit facility.

On
a pro forma basis taking into account the repayment of our old senior credit facility and the concurrent drawings under the new senior credit facility along with the early redemption
of the senior
notes due 2014 on May 12, 2010, the long term debt repayments, excluding capital leases, as of March 31, 2010 are as follows (in millions):

Period ending March 31:2011

£
180.12012


150.42013


175.32014


200.02015


200.0Thereafter


5,295.1Total debt payments


£6,200.9


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Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 4Fair Value Measurements

U.S. GAAP defines fair value 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 (exit price). The inputs used to measure fair value are classified into the following hierarchy:

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilitiesLevel 2

Unadjusted quoted prices in active markets for similar assets or liabilities, orUnadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, orInputs other than quoted prices that are observable for the asset or liabilityLevel 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. We have determined that all of our financial assets and liabilities that are stated at fair value fall in levels 1 and 2 in the fair value
hierarchy described above. In estimating the fair value of our financial assets and liabilities, we used the following methods and assumptions:

Cash and cash equivalents, and restricted cash:The carrying amounts reported in the consolidated balance sheets approximate fair value
due to the
short maturity and nature of these financial instruments.

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. The foreign currency forward rate contracts, interest rate swaps and cross-currency interest rate swaps are valued using 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 carrying amounts of our derivative financial instruments are disclosed in note 5.

Long term debt:In the following table the fair value of our senior credit facility is based upon quoted trading prices in inactive
markets for this
debt, which incorporates non-performance risk, and is classified within level 2 of the fair value hierarchy. The fair values of our other debt in the following table are based on
the quoted market prices in active markets and incorporate non-performance risk. Accordingly, the inputs used to value these debt instruments are classified within level 1 of the
fair value hierarchy.

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VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 4Fair Value Measurements (Continued)

The
carrying amounts and fair values of our long term debt are as follows (in millions):

March 31, 2010

December 31, 2009Carrying
Amount

Fair
Value

Carrying
Amount

Fair
ValueSenior credit facility


£1,639.6


£1,638.2


£3,112.8


£3,043.58.75% U.S. dollar senior notes due 2014


58.8


60.1


55.3


57.79.75% sterling senior notes due 2014


78.8


81.2


78.8


81.68.75% euro senior notes due 2014


42.1


44.6


41.9


43.79.125% U.S. dollar senior notes due 2016


362.2


382.4


340.2


359.46.50% U.S. dollar convertible senior notes due 2016


540.2


806.9


504.5


737.09.50% U.S. dollar senior notes due 2016


864.0


987.4


810.9


895.89.50% euro senior notes due 2016


153.8


186.3


152.9


173.58.375% U.S. dollar senior notes due 2019


388.8


395.9


365.1


377.08.875% sterling senior notes due 2019


344.5


362.2


344.5


355.36.50% U.S. dollar senior secured notes due 2018


648.7


646.3





7.00% sterling senior secured notes due 2018


862.1


892.5








Concentrations of Credit Risk

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash, trade receivables and derivative
contracts.

At
March 31, 2010 and December 31, 2009, we had £420.7 million and £430.5 million, respectively, in cash and cash equivalents. These
cash and cash equivalents are on deposit with major financial institutions and, as part of our cash management process, we perform regular evaluations of the credit standing of these institutions
using a range of metrics. We have not experienced any losses in cash balances and do not believe we are exposed to any significant credit risk on our cash balances.

Concentrations
of credit risk with respect to trade receivables are limited because of the large number of customers and their dispersion across geographic areas. We perform periodic
credit evaluations of our Business segment customers' financial condition and generally do not require collateral. No single group or customer represents greater than 10% of total accounts receivable.

Concentrations
of credit risk with respect to derivative contracts are focused within a limited number of international financial institutions with whom we operate and relate only to
derivatives with recorded asset balances at March 31, 2010. We perform regular reviews of the financial institutions with which we operate as to their credit worthiness and financial condition.
We have not experienced non-performance by any of our derivative counterparties nor do we expect there to be non-performance risks associated with our counterparties. At
March 31, 2010, based on market values, we had 56.7% of our derivative contracts with three financial institutions, each with more than 10% of our total exposure. At December 31, 2009,
based on market values, we had 68.2% of our derivative contracts with three financial institutions, each with more than 10% of our total exposure.

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VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities

Strategies and Objectives for Holding Derivative Instruments

Our results could be 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. 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 on
our consolidated statements of operations.

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 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.

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

In
respect 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. 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 derivative 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 or
losses on derivative instruments in the statement of operations. As a result of our effectiveness assessment at March 31, 2010, 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 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. 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.

13

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities (Continued)

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

March 31,
2010

December 31,
2009Included within current assets:Accounting HedgeForeign currency forward rate contracts

£
0.5

£
0.3Economic HedgeForeign currency forward rate contracts


4.7


1.9£
5.2

£
2.2Included within non-current assets:Accounting HedgeCross-currency interest rate swaps

£
139.4

£
63.7Economic HedgeCross-currency interest rate swaps


157.2


169.5Other





1.9£296.6


£235.1Included within current liabilities:Accounting HedgeForeign currency forward rate contracts

£


£
0.3Interest rate swaps





12.0Economic HedgeForeign currency forward rate contracts


0.1


2.4Interest rate swaps


3.3


3.1£
3.4

£
17.8Included within non-current liabilities:Accounting HedgeInterest rate swaps

£


£
21.0Cross-currency interest rate swaps


10.9


27.6Economic HedgeInterest rate swaps


56.8


Cross-currency interest rate swaps


39.0


58.2£106.7


£106.8


Cross-Currency Interest Rate SwapsHedging the Interest Payments of Senior Notes and Senior Credit Facility

As of March 31, 2010, 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 payments on the U.S. dollar and euro denominated senior notes and senior credit facility.

14

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities (Continued)

The terms of our outstanding cross-currency interest rate swaps at March 31, 2010 were as follows:

Hedged item/Maturity date

Hedge type

Notional
amount
due from
counterparty

Notional
amount
due to
counterparty

Weighted average
interest rate due
from counterparty

Weighted average
interest rate due
to counterparty(in millions)

(in millions)$89.3m senior notes due 2014October 2011

Economic

$
89.3

£
62.9

8.75%

9.42%$550m senior notes due 2016August 2016

Accounting


550.0


301.2

9.13%

8.54%$1,350m senior notes due 2016August 2016

Accounting


1,350.0


835.5

9.50%

9.98%$1,000m convertible senior notes due 2016November 2016

Economic


1,000.0


505.6

6.50%

6.95%$600m senior notes due 2019October 2019

Accounting


264.3


159.8

8.38%

9.03%October 2011

Economic


335.7


228.0

8.38%

9.23%October 2011 to October 2019

Accounting


335.7


203.0

8.38%

9.00%$1,000m senior secured notes due 2018January 2018

Accounting


1,000.0


615.4

6.50%

7.01%Senior credit facilitySeptember 2012

Economic


275.9


149.7

3 month $
LIBOR + 2.00%

3 month £
LIBOR + 2.13%$
5,200.9

£
3,061.1€47.3m senior notes due 2014October 2011

Economic

€
47.3

£
43.8

8.75%

8.90%€180m senior notes due 2016August 2016

Accounting


180.0


158.6

9.50%

10.18%Senior credit facilitySeptember 2012

Economic


299.8


207.9

3 month
EURIBOR + 2.00%

3 month
LIBOR + 2.16%€
527.1

£
410.3OtherDecember 2012

Economic

€
56.7

£
40.3

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%€
100.0

£
71.1December 2012

Economic

£
38.8

€
56.7

3 month
LIBOR + 2.40%

3 month
EURIBOR + 2.38%December 2013

Economic


29.7


43.3

3 month
LIBOR + 2.90%

3 month
EURIBOR + 2.88%£
68.5

€
100.0


15

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities (Continued)

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 November 2016 hedging the $1,000 million convertible senior notes due 2016.

Interest Rate SwapsHedging of Interest Rate Sensitive Obligations

As of March 31, 2010, 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, which accrue at variable rates based on LIBOR. The terms of our outstanding interest rate swap contracts at March 31,
2010 were as follows:

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 facilityApril 2010

Economic

£
3,000.0

3 month LIBOR

2.18%April 2010 to April 2011

Economic


200.0

3 month LIBOR

2.58%April 2010 to September 2012

Economic


1,300.0

3 month LIBOR

3.07%OtherApril 2010 to March 2013

Economic

£
300.0

3 month LIBOR

3.28%April 2010 to March 2013

Economic


300.0

1.86%

3 month LIBOR


Foreign Currency Forward Rate ContractsHedging Committed and Forecasted Transactions

As of March 31, 2010, we had outstanding foreign currency forward rate contracts to purchase U.S. dollars and South African rand
to hedge committed and forecasted purchases. The terms of our outstanding foreign currency forward rate contracts at March 31, 2010 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)Commited and forecasted purchasesApril 2010 to December 2010

Economic

$
100.6

£
61.7


1.6306June 2010 to December 2010

Accounting

$
8.5

£
5.3


1.6106April 2010 to June 2010

Accounting


ZAR 13.2

£
1.0


12.6893


Cash Flow Hedges

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

16

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities (Continued)

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.

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 statement of operations in the period in which they occur. During the three months ended March 31, 2010, there were no ineffectiveness losses recognized. The following tables present the
effective amount of gain or (loss) recognized in other comprehensive income and amounts reclassified to earnings during the three months ended March 31, 2010 (in millions):

Total

Interest
rate
swaps

Cross-currency
interest rate
swaps

Forward
foreign
exchange
contracts

Tax
EffectBalance at December 31, 2009

£
(55.3
)
£
(32.4
)
£
(6.9
)
£


£
(16.0
)Amounts recognized in other comprehensive income


95.8





95.1


0.7


Amounts reclassified as a result of cash flow hedge discontinuance


32.4


32.4








Amounts reclassified to earnings impacting:Foreign exchange gain


(127.9
)




(127.9
)




Interest expense


(2.7
)




(2.7
)




Operating costs


(0.2
)







(0.2
)

Balance at March 31, 2010

£
(57.9
)
£


£
(42.4
)
£
0.5

£
(16.0
)


Assuming no change in interest rates or foreign exchange rates for the next twelve months, the amount of pre-tax gains that would be
reclassified from other comprehensive income to earnings would be nil, £6.1 million and £0.5 million relating to interest rate swaps, cross-currency interest rate
swaps and forward foreign exchange contracts, respectively.

Note 6Restructuring and Other Charges

Restructuring and other charges of £0.4 million for the three months ended March 31, 2010 related primarily to employee termination and lease exit costs in
connection with the restructuring program initiated in the last quarter of 2008, partially offset by revisions in cash flow estimates for lease exit costs in relation to our historic and 2006
acquisition restructuring activities. Restructuring and other charges of £5.4 million for the three months ended March 31, 2009 related primarily to employee termination
costs in connection with the restructuring program initiated in the last quarter of 2008.

In
connection with our 2008 restructuring program we expect to incur operating expenditures of between £140 million to £155 million and capital
expenditures of between £40 million to £45 million in connection with this program over a three-year period.

17

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 6Restructuring and Other Charges (Continued)

The following table summarizes our historical restructuring accruals, the restructuring accruals resulting
from the acquisitions made by us during 2006 and the accruals for our restructuring plan announced in 2008 (in millions):

Historical
Restructuring
Accruals

2006
Acquisition
Restructuring
Accruals

2008 Restructuring AccrualsThree months ended March 31, 2010

Lease
Exit Costs

Lease
Exit Costs

Involuntary
Employee
Termination
and Related Costs

Lease and
Contract
Exit Costs

TotalBalance, December 31, 2009

£
12.6

£
27.4

£
1.8

£
15.5

£
57.3Amendments offset against goodwill





(0.3
)







(0.3
)Charged to expense


0.4





0.4


1.3


2.1Revisions


(0.4
)

(1.1
)

(0.2
)




(1.7
)Utilized


(1.4
)

(1.9
)

(1.1
)

(1.7
)

(6.1
)Balance, March 31, 2010

£
11.2

£
24.1

£
0.9

£
15.1

£
51.3


Note 7Stockholders' Equity and Share Based Compensation

The average number of shares outstanding for the three months ended March 31, 2010 and 2009 is computed as follows (in millions):

Three months
ended
March 31,2010

2009Number of shares outstanding at start of period


329.4


328.1Issues of common stock (average number outstanding during the period)


0.3


0.1Average number of shares outstanding


329.7


328.2


Total share based compensation expense included in selling, general and administrative expenses in the statements of operations was
£7.3 million and £4.7 million for the three months ended March 31, 2010 and 2009, respectively.

Basic
and diluted net loss per share is computed by dividing the net loss for the three months ended March 31, 2010 and 2009 by the weighted average number of shares outstanding
during the respective periods. Options, sharesave options, shares of restricted stock held in escrow, restricted stock units, warrants, and shares issuable under our convertible senior notes at
March 31, 2010 and 2009 are

18

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 7Stockholders' Equity and Share Based Compensation (Continued)

excluded
from the calculation of diluted loss per share, since these securities are anti-dilutive. The following is a summary of the terms of each of these securities:

Stock Option Grants

All options granted under our stock incentive plans have a ten year term and vest and become fully exercisable within five years of
continued employment. We issue new shares upon exercise of the options. For performance-based option grants, the performance objectives are based upon 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 performance of other entities, indices or benchmarks and may
be expressed in terms of progression within a specific range.

Sharesave Option Grants

All options granted under the Virgin Media Inc. Sharesave Plan enable eligible employees to purchase shares of our common stock
at a discount. Employees are invited to take out savings contracts that last for three years. At the end of the contract, employees use the proceeds of these savings to exercise the options granted
under the plan. We issue new shares upon exercise of the options.

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, which 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 Grants

The restricted stock units 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. The
final number of restricted stock units vesting will be settled in either common stock or an amount of cash equivalent to the fair market value at the date of vesting.

Series A Warrants

Warrants are exercisable for a total of 25,769,060 shares of our common stock at an exercise price of $105.17 per share. The
Series A warrants expire on January 10, 2011.

Convertible Senior 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

19

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 7Stockholders' Equity and Share Based Compensation (Continued)

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 senior 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, the issuance of certain rights or warrants, certain
cash dividends or distributions or stock repurchases where the price exceeds market values.

Note 8Comprehensive Loss

Comprehensive loss comprises (in millions):

Three months
ended
March 31,2010

2009Net loss for period

£
(160.4
)
£
(154.0
)Currency translation adjustment


7.7


4.6Net unrealized gains (losses) on derivatives, net of tax


95.8


(22.1
)Reclassification of derivative gains to net income, net of tax


(98.4
)

(3.5
)Comprehensive loss

£
(155.3
)
£
(175.0
)


The components of accumulated other comprehensive income, net of taxes, were as follows (in millions):

March 31,
2010

December 31,
2009Foreign currency translation

£
167.8

£
160.1Pension liability adjustments


(82.3
)

(82.3
)Net unrealized gains on derivatives


(57.9
)

(55.3
)£
27.6

£
22.5


20

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 9Contingent Liabilities

We are involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employee and employee benefits which arise in the ordinary course of
our business. We recognize a provision for a liability when management believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We
believe we have adequate provisions for any such matters. We review these provisions at least quarterly and adjust these provisions to reflect the impact of negotiations, settlements, rulings, advice
of legal counsel and other information and events pertaining to a particular case. Whilst litigation is inherently unpredictable, we believe that we have valid defenses with respect to legal matters
pending against us. Nevertheless, it is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these
contingencies, or because of the diversion of management's attention and the creation of significant expenses.

Our
revenue generating activities are subject to Value Added Tax, or VAT. The U.K. tax authorities are seeking to challenge our VAT treatment of certain of these activities. As a result,
we have estimated contingent losses totaling £35.9 million as of March 31, 2010 that are not accrued for, as we do not deem them to be probable of resulting in a liability.
We continue to evaluate the likelihood of the contingent losses as additional information becomes available and, to the extent an accrual becomes necessary, it will be recognized in earnings in the
period when such amount becomes probable. Any challenge made could be subject to court proceedings before any settlement would be required and therefore the timescale for resolution is not expected to
occur within the next financial year.

Note 10Industry Segments

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.

Our
internal reporting structure and the related financial information used by management and the CODM reflect our operating structure which has been established to build a
customer-focused organization able to respond effectively to rapid changes in the market, technology and customer demands through our three customer-based segments: Consumer, Business and Content.

Our
Consumer segment is our primary segment, consisting of the distribution of television programming, broadband and fixed line telephone services to residential customers on our cable
network, the provision of broadband and fixed line telephone services to residential customers outside of our cable network, and the provision of mobile telephony and broadband to residential
customers.

Our
Business segment comprises our operations carried out through Virgin Media 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.

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

21

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 10Industry Segments (Continued)

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.

Segment
information for the three month periods ended March 31, 2010 and 2009 was as follows (in millions):

Three months ended March 31, 2010Consumer

Business

Content

TotalRevenue

£
789.5

£
139.9

£
33.8

£
963.2Inter segment revenue








7.1


7.1Segment contribution

£
480.5

£
76.1

£
6.6

£
563.2




Three months ended March 31, 2009Consumer

Business

Content

TotalRevenue

£
753.3

£
149.8

£
32.6

£
935.7Inter segment revenue








6.6


6.6Segment contribution

£
438.2

£
82.6

£
6.9

£
527.7


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

Three months
ended
March 31,2010

2009Total segment contribution

£
563.2

£
527.7Other operating and corporate costs


206.8


215.4Depreciation


242.9


232.7Amortization


37.1


61.2Restructuring and other charges


0.4


5.4Consolidated operating income

£
76.0

£
13.0


Note 11Condensed Consolidated Financial Information

On April 13, 2004, Virgin Media Finance issued £375 million aggregate principal amount of 9.75% senior notes due 2014, $425 million aggregate principal
amount of 8.75% senior notes due 2014, and €225 million aggregate principal amount of 8.75% senior notes due 2014. On July 25, 2006, Virgin Media Finance issued
$550 million aggregate principal amount of 9.125% senior notes due 2016. On June 3, 2009, Virgin Media Finance issued $750 million aggregate principal amount of 9.50% senior notes
due 2016 and €180 million aggregate principal amount of 9.50% senior notes due 2016 and on

22

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 11Condensed Consolidated Financial Information (Continued)

July 21,
2009, Virgin Media Finance issued a further $600 million aggregate principle amounts of 9.50% senior notes due 2016. On November 9, 2009, Virgin Media Finance issued
$600 million aggregate principal amount of 8.375% senior notes due 2019 and £350 million aggregate principal amount of 8.875% senior notes due 2019. 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. VMIL is included as a conditional guarantor as at December 31, 2009 following its accession on December 30, 2009 as a senior subordinated guarantor
of the senior notes issued by Virgin Media Finance.

We
present the following condensed consolidated financial information as of March 31, 2010 and December 31, 2009 and for the three months ended March 31, 2010 and
2009 as required by Rule 3-10(d) of Regulation S-X.

23

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 11Condensed Consolidated Financial Information (Continued)

March 31, 2010Balance sheets

Company

Virgin
Media
Finance

Other
guarantors

VMIH

VMIL

All other
subsidiaries

Adjustments

Total(in millions)Cash and cash equivalents

£
15.4

£
1.8

£
0.8

£
345.2

£


£
57.5

£


£
420.7Restricted cash

















6.0





6.0Other current assets


5.6








16.2





602.9





624.7Total current assets


21.0


1.8


0.8


361.4





666.4





1,051.4Fixed assets, net

















4,982.6





4,982.6Goodwill and intangible assets, net








(15.0
)







2,315.4





2,300.4Investments in, and loans to, parent and subsidiary companies


1,867.8


687.1


(1,104.2
)

2,056.9


1,442.3


(5,500.0
)

909.5


359.4Other assets, net


10.7








358.6





73.1





442.4Total assets

£
1,899.5

£
688.9

£
(1,118.4
)
£
2,776.9

£
1,442.3

£
2,537.5

£
909.5

£
9,136.2Current liabilities

£
19.3

£
55.7

£
40.3

£
120.2

£


£
1,946.5

£
(864.1
)
£
1,317.9Long term debt, net of current portion


540.2


2,293.0





1,278.8





1,993.2





6,105.2Other long term liabilities








0.3


83.9





288.9





373.1Shareholders' equity (deficit)


1,340.0


(1,659.8
)

(1,159.0
)

1,294.0


1,442.3


(1,691.1
)

1,773.6


1,340.0Total liabilities and shareholders' equity

£
1,899.5

£
688.9

£
(1,118.4
)
£
2,776.9

£
1,442.3

£
2,537.5

£
909.5

£
9,136.2




December 31, 2009Balance sheets

Company

Virgin
Media
Finance

Other
guarantors

VMIH

VMIL

All other
subsidiaries

Adjustments

Total(in millions)Cash and cash equivalents

£
12.4

£
1.9

£
0.3

£
292.9

£


£
123.0

£


£
430.5Restricted cash

















6.0





6.0Other current assets


4.3





0.1


9.9





591.6





605.9Total current assets


16.7


1.9


0.4


302.8





720.6





1,042.4Fixed assets, net

















5,049.2





5,049.2Goodwill and intangible assets, net








(15.0
)







2,352.8





2,337.8Investments in, and loans to, parent and subsidiary companies


1,977.8


766.8


(962.1
)

2,859.9





(6,316.6
)

2,034.1


359.9Other assets, net


10.4








295.5





92.2





398.1Total assets

£
2,004.9

£
768.7

£
(976.7
)
£
3,458.2

£


£
1,898.2

£
2,034.1

£
9,187.4Current liabilities

£
9.1

£
82.9

£
25.2

£
127.3

£


£
1,863.1

£
(716.8
)
£
1,390.8Long term debt, net of current portion


504.5


2,189.5





1,798.9





1,440.6





5,933.5Other long term liabilities








0.1


83.8





287.9





371.8Shareholders' equity (deficit)


1,491.3


(1,503.7
)

(1,002.0
)

1,448.2





(1,693.4
)

2,750.9


1,491.3Total liabilities and shareholders' equity

£
2,004.9

£
768.7

£
(976.7
)
£
3,458.2

£


£
1,898.2

£
2,034.1

£
9,187.4


24

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 11Condensed Consolidated Financial Information (Continued)

Three months ended March 31, 2010Statements of operations

Company

Virgin
Media
Finance

Other
guarantors

VMIH

VMIL

All other
subsidiaries

Adjustments

Total(in millions)Revenue

£


£


£


£


£


£
963.2

£


£
963.2Operating costs

















(399.1
)




(399.1
)Selling, general and administrative expenses


(4.6
)













(203.1
)




(207.7
)Restructuring and other charges

















(0.4
)




(0.4
)Depreciation and amortization

















(280.0
)




(280.0
)Operating income (loss)


(4.6
)













80.6





76.0Interest income and other, net


10.3


56.8


29.4


28.3





161.0


(284.7
)

1.1Interest expense


(14.4
)

(58.6
)

(28.2
)

(108.7
)




(198.1
)

284.7


(123.3
)Loss on extinguishment of debt











(16.4
)




(16.5
)




(32.9
)Share of income from equity investments

















7.6





7.6Loss on derivative instruments











(19.1
)




(1.9
)




(21.0
)Foreign currency loss


(0.2
)




(4.4
)

(36.3
)




(28.9
)




(69.8
)Income tax benefit (expense)








(0.2
)

3.6





(1.5
)




1.9(Loss) income from continuing operations


(8.9
)

(1.8
)

(3.4
)

(148.6
)




2.3





(160.4
)Equity in net loss of subsidiaries


(151.5
)

(151.7
)

(148.1
)

(3.1
)

(3.4
)




457.8


Net (loss) income

£
(160.4
)
£
(153.5
)
£
(151.5
)
£
(151.7
)
£
(3.4
)
£
2.3

£
457.8

£
(160.4
)


25

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 11Condensed Consolidated Financial Information (Continued)



Three months ended March 31, 2009Statements of operations

Company

Virgin
Media
Finance

Other
guarantors

VMIH

All other
subsidiaries

Adjustments

Total(in millions)Revenue

£


£


£


£


£
935.7

£


£
935.7Operating costs














(413.7
)




(413.7
)Selling, general and administrative expenses


(5.1
)




(0.7
)




(203.9
)




(209.7
)Restructuring and other charges














(5.4
)




(5.4
)Depreciation and amortization














(293.9
)




(293.9
)Operating income (loss)


(5.1
)




(0.7
)




18.8





13.0Interest and other income, net


11.3


38.6


35.8


19.8


137.4


(239.6
)

3.3Interest expense


(15.4
)

(38.8
)

(29.7
)

(82.7
)

(182.0
)

239.6


(109.0
)Share of income from equity investments














2.5





2.5Foreign currency (losses) gains





(0.3
)

(0.5
)

(12.8
)

1.7





(11.9
)Losses on derivative instruments











(21.2
)







(21.2
)Income tax expense








(0.1
)

(8.0
)

(1.5
)




(9.6
)(Loss) income from continuing operations


(9.2
)

(0.5
)

4.8


(104.9
)

(23.1
)




(132.9
)Loss from discontinued operations, net of taxes














(21.1
)




(21.1
)Equity in net loss of subsidiaries


(144.8
)

(151.8
)

(149.8
)

(46.9
)




493.3


Net loss

£
(154.0
)
£
(152.3
)
£
(145.0
)
£
(151.8
)
£
(44.2
)
£
493.3

£
(154.0
)


26

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 11Condensed Consolidated Financial Information (Continued)

Three months ended March 31, 2010Statements 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

£
(6.4
)
£
(0.1
)
£
3.6

£
79.5

£


£
110.6

£


£
187.2Investing activities:Purchase of fixed and intangible assets

















(181.5
)




(181.5
)Principal repayments on loans to equity investments

















1.2





1.2Principal drawdowns (repayments) on loans to group companies


10.0





(3.1
)

(973.2
)




966.3





Proceeds from the sale of fixed assets























Other

















1.0





1.0Net cash (used in) provided by investing activities


10.0





(3.1
)

(973.2
)




787.0





(179.3
)Financing activities:New borrowings, net of financing fees











1,447.8











1,447.8Proceeds from employee stock option exercises


5.6




















5.6Principal payments on long term debt and capital leases











(501.8
)




(963.1
)




(1,464.9
)Dividends paid


(8.8
)



















(8.8
)Net cash (used in) provided by financing activities


(3.2
)







946.0





(963.1
)




(20.3
)Effect of exchange rates on cash and cash equivalents


2.6




















2.6(Decrease) increase in cash and cash equivalents


3.0


(0.1
)

0.5


52.3





(65.5
)




(9.8
)Cash and cash equivalents at beginning of period


12.4


1.9


0.3


292.9





123.0





430.5Cash and cash equivalents at end of period

£
15.4

£
1.8

£
0.8

£
345.2

£


£
57.5

£


£
420.7


27

---



Table of Contents

VIRGIN MEDIA INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 11Condensed Consolidated Financial Information (Continued)



Three months ended March 31, 2009Statements of cash flows

Company

Virgin
Media
Finance

Other
guarantors

VMIH

All
Other
subsidiaries

Adjustments

Total(in millions)Net cash provided by (used in) operating activities

£
(3.1
)
£


£
(1.4
)
£
75.1

£
58.6

£


£
129.2Investing activities:Purchase of fixed and intangible assets














(144.4
)




(144.4
)Principal repayments on loans to equity investments














1.2





1.2Principal repayments (drawdowns) on loans to group companies


0.6





0.6


(0.9
)

(0.3
)




Other














1.5





1.5Net cash (used in) provided by investing activities


0.6





0.6


(0.9
)

(142.0
)




(141.7
)Financing activities:Principal payments on long term debt and capital leases














(12.4
)




(12.4
)Intercompany funding movements


15.0








(9.9
)

(5.1
)




Dividends paid


(9.0
)
















(9.0
)Net cash (used in) provided by financing activities


6.0








(9.9
)

(17.5
)




(21.4
)Cash flow from discontinued operationsNet cash used in operating activities














(7.9
)




(7.9
)Net cash used in discontinued operations














(7.9
)




(7.9
)Effect of exchange rates on cash and cash equivalents


(0.2
)
















(0.2
)Decrease (increase) in cash and cash equivalents


3.3





(0.8
)

64.3


(108.8
)




(42.0
)Cash and cash equivalents at beginning of period


9.9





1.2


0.4


170.1





181.6Cash and cash equivalents at end of period

£
13.2

£


£
0.4

£
64.7

£
61.3

£


£
139.6


28

---



Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

March 31, 2010

December 31, 2009(unaudited)AssetsCurrent assetsCash and cash equivalents

£
402.7

£
415.9Restricted cash


5.3


5.3Accounts receivabletrade, less allowances for doubtful accounts of £10.8 (2010) and £9.6 (2009)


414.6


427.9Inventory for resale


15.5


12.9Programming inventory


88.1


62.1Derivative financial instruments


5.2


2.2Prepaid expenses and other current assets


90.0


96.4Total current assets


1,021.4


1,022.7Fixed assets, net


4,861.9


4,925.3Goodwill and other indefinite-lived assets


2,080.7


2,081.0Intangible assets, net


228.8


265.9Equity investments


359.4


359.9Derivative financial instruments


296.6


235.1Deferred financing, net of accumulated amortization of £171.4 (2010) and £133.6 (2009)


84.2


101.8Other assets


50.9


50.8Due from group companies


814.2


781.6Total assets

£
9,798.1

£
9,824.1Liabilities and shareholders' equityCurrent liabilitiesAccounts payable

£
340.5

£
375.5Accrued expenses and other current liabilities


356.1


407.4Derivative financial instruments


3.4


17.8VAT and employee taxes payable


89.3


61.8Restructuring liabilities


50.3


55.9Interest payable


61.4


42.7Interest payable to group companies


165.5


165.9Deferred revenue


290.4


276.7Current portion of long term debt


41.7


41.2Total current liabilities


1,398.6


1,444.9Long term debt, net of current portion


3,272.0


3,239.4Long term debt due to group companies


3,461.9


3,321.1Derivative financial instruments


106.7


106.8Deferred revenue and other long term liabilities


180.7


180.7Deferred income taxes


84.2


83.0Total liabilities


8,504.1


8,375.9Commitments and contingent liabilitiesShareholders' equityCommon stock£0.001 par value; authorized 1,000,000 ordinary shares (2010 and 2009); issued and outstanding 224,552 ordinary shares (2010 and
2009)





Additional paid-in capital


4,371.3


4,371.3Accumulated other comprehensive loss


(140.3
)

(137.8
)Accumulated deficit


(2,937.0
)

(2,785.3
)Total shareholders' equity


1,294.0


1,448.2Total liabilities and shareholders' equity

£
9,798.1

£
9,824.1


See accompanying notes

29

---



Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited) (in millions)

Three months ended
March 31,2010

2009Revenue

£
937.4

£
907.6Costs and expensesOperating costs (exclusive of depreciation shown separately below)


388.5


400.3Selling, general and administrative expenses


196.4


197.3Restructuring and other charges


0.4


5.1Depreciation


237.4


227.5Amortization


37.1


61.2859.8


891.4Operating income


77.6


16.2Other income (expense)Interest income and other, net


1.4


3.3Interest income from group companies


1.9


2.1Interest expense


(54.6
)

(65.3
)Interest expense to group companies


(68.6
)

(47.7
)Loss on extinguishment of debt


(32.9
)

Share of income from equity investments


7.6


2.5Loss on derivative instruments


(21.0
)

(21.2
)Foreign currency loss


(65.2
)

(11.1
)Loss from continuing operations before income taxes


(153.8
)

(121.2
)Income tax benefit (expense)


2.1


(9.5
)Loss from continuing operations


(151.7
)

(130.7
)Discontinued operationsLoss from discontinued operations, net of tax





(21.1
)Net loss

£
(151.7
)
£
(151.8
)


See accompanying notes.

30

---



Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in millions)

Three months ended March 31,2010

2009Operating activitiesNet loss

£
(151.7
)
£
(151.8
)Loss from discontinued operations





21.1Loss from continuing operations


(151.7
)

(130.7
)Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities:Depreciation and amortization


274.5


288.7Non-cash interest


25.1


(52.7
)Non-cash compensation


6.7


4.0Loss on extinguishment of debt


32.8


Income from equity accounted investments, net of dividends received


(4.1
)

(2.5
)Unrealized losses on derivative instruments


46.5


23.2Unrealized foreign currency losses


35.8


14.2Income taxes


(0.7
)

9.8Amortization of original issue discount and deferred finance costs


4.9


8.6Gain on disposal of assets


(0.7
)

Other


1.1


(1.3
)Changes in operating assets and liabilities, net of effect from business acquisitions and dispositions:


(43.6
)

(63.7
)Net cash provided by operating activities


226.6


97.6Investing activities:Purchase of fixed and intangible assets


(179.3
)

(141.9
)Principal repayments on loans to equity investments


1.2


1.2Investments and loans from parent and subsidiary companies


(45.6
)

17.1Other


1.0


1.5Net cash used in investing activities


(222.7
)

(122.1
)Financing activities:New borrowings, net of financing fees


1,447.8


Principal payments on long term debt, including redemption premiums, and capital leases


(1,464.9
)

(12.4
)Net cash used in financing activities


(17.1
)

(12.4
)Cash flow from discontinued operations:Net cash used in operating activities





(7.9
)Net cash used in discontinued operations





(7.9
)Effect of exchange rate changes on cash and cash equivalents





0.1Decrease in cash and cash equivalents


(13.2
)

(44.7
)Cash and cash equivalents, beginning of period


415.9


170.7Cash and cash equivalents, end of period

£
402.7

£
126.0


See
accompanying notes.

31

---



Table of Contents

VIRGIN MEDIA INVESTMENTS LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited) (in millions, except par value)

March 31,
2010

December 31,
2009(Adjusted)AssetsCurrent assetsCash and cash equivalents

£
402.7

£
415.9Restricted cash


5.3


5.3Accounts receivabletrade, less allowances for doubtful accounts of £10.8 (2010) and £9.6 (2009)


414.6


427.9Inventory for resale


15.5


12.9Programming inventory


88.1


62.1Derivative financial instruments


5.2


2.2Prepaid expenses and other current assets


90.0


96.4Total current assets


1,021.4


1,022.7Fixed assets, net


4,861.9


4,925.3Goodwill and other indefinite-lived assets


2,080.7


2,081.0Intangible assets, net


228.8


265.9Equity investments


359.4


359.9Derivative financial instruments


296.6


235.1Deferred financing, net of accumulated amortization of £171.4 (2010) and £133.6 (2009)


84.2


101.8Other assets


50.9


50.8Due from group companies


814.2


781.6Total assets

£
9,798.1

£
9,824.1Liabilities and shareholders' equityCurrent liabilitiesAccounts payable

£
340.5

£
375.5Accrued expenses and other current liabilities


356.1


407.4Derivative financial instruments


3.4


17.8VAT and employee taxes payable


89.3


61.8Restructuring liabilities


50.3


55.9Interest payable


17.2


18.9Interest payable to group companies


209.7


189.7Deferred revenue


290.4


276.7Current portion of long term debt


41.7


41.2Total current liabilities


1,398.6


1,444.9Long term debt, net of current portion


482.4


1,440.5Long term debt due to group companies


6,251.5


5,120.0Derivative financial instruments


106.7


106.8Deferred revenue and other long term liabilities


180.7


180.7Deferred income taxes


84.2


83.0Total liabilities


8,504.1


8,375.9Commitments and contingent liabilitiesShareholder's equityCommon stock£1.0 par value; issued and outstanding 1.0 (2010 and 2009) ordinary shares


1.0


1.0Additional paid-in capital


4,370.3


4,370.3Accumulated other comprehensive loss


(140.3
)

(137.8
)Accumulated deficit


(2,937.0
)

(2,785.3
)Total shareholders' equity


1,294.0


1,448.2Total liabilities and shareholders' equity

£
9,798.1

£
9,824.1


See accompanying notes

32

---



Table of Contents

VIRGIN MEDIA INVESTMENTS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited) (in millions)

Three months ended
March 31,2010

2009Revenue

£
937.4

£
907.6Costs and expensesOperating costs (exclusive of depreciation shown separately below)


388.5


400.3Selling, general and administrative expenses


196.4


197.3Restructuring and other charges


0.4


5.1Depreciation


237.4


227.5Amortization


37.1


61.2859.8


891.4Operating income


77.6


16.2Other income (expense)Interest income and other, net


1.4


3.3Interest income from group companies


1.9


2.1Interest expense


(9.2
)

(30.4
)Interest expense to group companies


(114.0
)

(82.6
)Loss on extinguishment of debt


(32.9
)

Share of income from equity investments


7.6


2.5Loss on derivative instruments


(21.0
)

(21.2
)Foreign currency loss


(65.2
)

(11.1
)Loss from continuing operations before income taxes


(153.8
)

(121.2
)Income tax benefit (expense)


2.1


(9.5
)Loss from continuing operations


(151.7
)

(130.7
)Discontinued operationsLoss from discontinued operations, net of tax





(21.1
)Net loss

£
(151.7
)
£
(151.8
)


See accompanying notes.

33

---



Table of Contents

VIRGIN MEDIA INVESTMENTS LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited) (in millions)

Three months ended March 31,2010

2009Operating activitiesNet loss

£
(151.7
)
£
(151.8
)Loss from discontinued operations





21.1Loss from continuing operations


(151.7
)

(130.7
)Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities:Depreciation and amortization


274.5


288.7Non-cash interest


25.1


(52.7
)Non-cash compensation


6.7


4.0Loss on extinguishment of debt


32.8


Income from equity accounted investments, net of dividends received


(4.1
)

(2.5
)Unrealized losses on derivative instruments


46.5


23.2Unrealized foreign currency losses


35.8


14.2Income taxes


(0.7
)

9.8Amortization of original issue discount and deferred finance costs


4.9


8.6Gain loss on disposal of assets


(0.7
)

Other


1.1


(1.3
)Changes in operating assets and liabilities, net of effect from business acquisitions and dispositions:


(43.6
)

(63.7
)Net cash provided by operating activities


226.6


97.6Investing activities:Purchase of fixed and intangible assets


(179.3
)

(141.9
)Principal repayments on loans to equity investments


1.2


1.2Investments and loans from parent and subsidiary companies


920.8


17.1Other


1.0


1.5Net cash provided by (used) in investing activities


743.7


(122.1
)Financing activities:New borrowings, net of financing fees


(20.2
)

Principal payments on long term debt, including redemption premiums, and capital leases


(963.3
)

(12.4
)Net cash used in financing activities


(983.5
)

(12.4
)Cash flow from discontinued operations:Net cash used in operating activities





(7.9
)Net cash used in discontinued operations





(7.9
)Effect of exchange rate changes on cash and cash equivalents





0.1Decrease in cash and cash equivalents


(13.2
)

(44.7
)Cash and cash equivalents, beginning of period


415.9


170.7Cash and cash equivalents, end of period

£
402.7

£
126.0


See accompanying notes.

34

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1Basis of Presentation

These combined notes accompany and form an integral part of the separate condensed consolidated financial statements of Virgin Media Investment Holdings Limited and its subsidiaries, or
VMIH, and Virgin Media Investments Limited and its subsidiaries, or VMIL. VMIH and VMIL are indirect, wholly owned subsidiaries of Virgin Media Inc. VMIL is a direct, wholly owned subsidiary of
VMIH.

On
January 1, 2010, VMIL acquired VMIH's shareholdings in its wholly owned subsidiaries other than Virgin Media Secured Finance PLC, which remains a subsidiary of VMIH.
VMIL issued 1,000,141 shares to VMIH as part of this internal reorganization with an additional issuance of shares from VMIL to VMIH due to occur upon the filing of the 2009 audited financial
statements of VMIH with the appropriate authorities in England and Wales. As a result of the reorganization, it was determined that a change in reporting entity had occurred for VMIL and accordingly
the comparative separate financial statements for VMIL have been adjusted to consist of the combined historical balance sheet, results of operations, and cash flows of the wholly owned subsidiaries of
VMIH that were contributed to VMIL as part of the group reorganization. These comparative financial statements have been prepared in accordance with the guidance permissible for reorganizations
between wholly owned subsidiaries such that the historic values of all assets and liabilities acquired in the reorganization have been carried over with no new purchase accounting considered. The
effect of the issuance of common stock to VMIH has been retrospectively applied to the shareholder's equity amounts in the consolidated balance sheet as at December 31, 2009 to reflect these
amounts as if the transaction had occurred at the beginning of the periods presented. The retrospective application had no material effect on other amounts. Intercompany accounts and transactions have
been eliminated on consolidation.

Under
the terms of the indentures governing the senior notes issued by Virgin Media Finance PLC and the indentures governing the senior secured notes issued by Virgin Media
Secured Finance PLC, VMIL was required to grant guarantees that are identical to the guarantees granted by VMIH under the same indentures. Under the terms of the intercreditor deed governing
the senior credit facility, VMIL was required to grant a guarantee identical to the guarantee granted by VMIH under the same deed. VMIH is fully dependent on the cash flows of the operating
subsidiaries of VMIL to service these debt obligations. As a result, debt obligations, cash required to service debt obligations, derivative financial instruments, and any effects on the consolidated
results of operations and cash flows related to the senior notes, senior secured notes and senior credit facility have been reflected in the separate condensed consolidated financial statements of
VMIL. As such, the amounts included in the financial statements of VMIL do not necessarily represent items to which VMIL has legal title.

As
used in these notes, the terms "we", "our", or "companies" refer to VMIH and VMIL and, except as otherwise noted, the information in these combined notes relates to both of the
companies.

The
accompanying separate unaudited condensed consolidated financial statements of each of the companies 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. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary
for a fair presentation have been included. Operating results for the three months ended March 31, 2010 are not necessarily

35

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Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 1Basis of Presentation (Continued)

indicative
of the results that may be expected for the year ending December 31, 2010. For further information, refer to the consolidated financial statements and notes thereto included in the
annual report on Form 10-K for the year ended December 31, 2009, as filed with the SEC on February 26, 2010.

Note 2Recent Accounting Pronouncements

In September 2009, the Financial Accounting Standards Board, or FASB, ratified new accounting guidance for existing multiple-element revenue arrangements. The revised multiple-element
revenue arrangements guidance will be effective for the first annual reporting period beginning on or after June 15, 2010 and may be applied retrospectively for all periods presented or
prospectively to arrangements entered into or materially modified after the adoption date. Early adoption is permitted provided that the revised guidance is retroactively applied to the beginning of
the year of adoption. We have not yet adopted the provisions of this guidance and are evaluating the impact on our consolidated financial statements.

In
January 2010, the FASB issued new guidance for fair value measurements and disclosures. The guidance improves disclosures about fair value measurements by requiring a greater level of
disaggregated information and more robust disclosures about valuation techniques and inputs to fair value measurements. In addition, the guidance requires separate disclosure of amounts of significant
transfers in and out of Levels 1 and 2 of the fair value hierarchy and a reconciliation of fair value
measurements using significant unobservable inputs (Level 3 of the fair value hierarchy). The adoption of this standard did not have a material impact on our consolidated financial statements.

In
February 2010, the FASB issued new guidance for the disclosure of subsequent events. As a result of this guidance, we are no longer required to disclose the date through which we have
evaluated subsequent events in the financial statements. We have adopted the provisions of this guidance.

Note 3Long Term Debt

Long term debt reflects our obligations under the terms of the indentures governing the senior notes and senior secured notes as well as the intercreditor deed governing the senior
credit facility. As such, these amounts include debt owed directly to third parties by affiliated entities not consolidated by us which have been classified as amounts due to group companies.

36

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Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 3Long Term Debt (Continued)

Long
term debt consisted of (in millions):

March 31, 2010

December 31, 2009VMIH

VMIL

VMIH

VMILAmounts due to third partiesSterling7.00% senior secured notes due 2018

£
862.1

£


£


£
Senior credit facility


1,190.8


179.1


2,481.0


1,038.6Capital leases


162.2


162.2


166.6


166.6Other


1.1


1.1


1.2


1.2U.S. Dollar6.50% senior secured notes due 2018


648.7








Senior credit facility


181.7


181.7


275.3


275.3EuroSenior credit facility


267.1





356.5


3,313.7


524.1


3,280.6


1,481.7Less current portion


(41.7
)

(41.7
)

(41.2
)

(41.2
)Long term debt due to third parties

£
3,272.0

£
482.4

£
3,239.4

£
1,440.5Amounts due to group companiesSterling9.75% senior notes due 2014

£
78.8

£
78.8

£
78.8

£
78.88.875% senior notes due 2019


344.5


344.5


344.5


344.57.00% senior secured notes due 2018





862.1





Senior credit facility





1,011.7





1,442.4U.S. Dollar8.75% senior notes due 2014


58.8


58.8


55.3


55.39.125% senior notes due 2016


362.2


362.2


340.2


340.26.50% senior notes due 2016


646.0


646.0


606.8


606.89.50% senior notes due 2016


864.0


864.0


810.9


810.98.375% senior notes due 2019


388.8


388.8


365.1


365.16.50% senior secured notes due 2018





648.7





Floating rate senior loan notes due 2012


65.9


65.9


61.9


61.9Euro8.75% senior notes due 2014


42.1


42.1


41.9


41.99.50% senior notes due 2016


153.8


153.8


152.9


152.9Senior credit facility





267.1





356.5Other amounts due to group companiesOther notes due to affiliates


457.0


457.0


462.8


462.8Long term debt due to group companies

£
3,461.9

£
6,251.5

£
3,321.1

£
5,120.0


37

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Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 3Long Term Debt (Continued)

The effective interest rate on the senior credit facility was 5.6% and 5.3% as at March 31, 2010 and December 31, 2009,
respectively.

On
January 19, 2010, Virgin Media Secured Finance PLC, a wholly owned subsidiary of VMIH, issued $1.0 billion aggregate principal amount of 6.50% senior secured
notes due 2018 and £875 million aggregate principal amount of 7.00% senior secured notes due 2018. Interest is payable on June 15 and December 15 each year, beginning
on June 15, 2010. The senior secured notes due 2018 rank pari passu with our senior credit facility and, subject to certain exceptions, share in the same guarantees and security which have been
granted in favor of our senior credit facility. We used the net proceeds to make repayments totaling £1,453.0 million under our senior credit facility.

On
April 19, 2010, we drew down an aggregate principal amount of £1,675.0 million under our new senior credit facility dated March 16, 2010, as amended
and restated, or the new senior credit facility, and applied the proceeds towards the repayment of all amounts outstanding under our old senior credit facility and for general corporate purposes. The
new senior credit facility comprises a term loan A facility in an aggregate principal amount of £1,000 million, a term loan B facility in an aggregate principal amount of
£675 million and a revolving credit facility in aggregate principal amount of £250 million. We also utilized £20.4 million of the new revolving
credit facility for bank guarantees and standby letters of credit.

On
April 12, 2010, Virgin Media Finance PLC, or Virgin Media Finance, issued redemption notices to the holders of our senior notes due 2014 pursuant to which we will redeem
the full outstanding principal amount of these notes plus accrued interest on May 12, 2010. The redemption price will be 102.917% of the principal amount of the notes denominated in U.S.
dollars and euros and 103.250% of the principal amount of the notes denominated in sterling. The estimated cost of redemption of these notes, inclusive of the cost to unwind derivative contracts
entered in to as economic hedges of these notes, is £193.9 million.

Long
term debt repayments, excluding capital leases, as of March 31, 2010, were due as follows (in millions):

Period ending March 31:2011

£
0.42012


0.42013


1,705.82014


2015


179.8Thereafter


4,789.6Total debt payments

£
6,676.0


Following the repayments made on April 19, 2010, there were no outstanding amounts under our old senior credit facility.

On
a pro forma basis taking into account the repayment of our old senior credit facility and the concurrent drawings under the new senior credit facility along with the early redemption
of the senior

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Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 3Long Term Debt (Continued)

notes
due 2014 on May 12, 2010, the long term debt repayments, excluding capital leases as of March 31, 2010 are as follows (in millions):

Period ending March 31:2011

£
180.12012


150.42013


241.22014


200.02015


200.0Thereafter


5,739.6Total debt payments

£
6,711.3


Note 4Fair Value Measurements

U.S. GAAP defines fair value 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 (exit price). The inputs used to measure fair value are classified into the following hierarchy:

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilitiesLevel 2

Unadjusted quoted prices in active markets for similar assets or liabilities, orUnadjusted quoted prices for identical or similar assets or liabilities in markets that are not active,
orInputs other than quoted prices that are observable for the asset or liabilityLevel 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. We have determined that all of our financial assets and liabilities that are stated at fair value fall in levels 1 and 2 in the fair value
hierarchy described above. In estimating the fair value of our financial assets and liabilities, we used the following methods and assumptions:

Cash and cash equivalents, and restricted cash:The carrying amounts reported in the consolidated balance sheets approximate fair value
due to the
short maturity and nature of these financial instruments.

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Table of Contents



VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 4Fair Value Measurements (Continued)

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. The foreign currency forward rate contracts, interest rate swaps and cross-currency interest rate swaps are valued using 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 carrying amounts of our derivative financial instruments are disclosed in note 5.

Long term debt:In the following table the fair value of our senior credit facility is based upon quoted trading prices in inactive
markets for this
debt, which incorporates non-performance risk, and is classified within level 2 of the fair value hierarchy. The fair values of our other debt in the following table are based on
the quoted market prices in active markets and incorporate non-performance risk. Accordingly, the inputs used to value these debt instruments are classified within level 1 of the
fair value hierarchy.

The
carrying amounts and fair values of our long term debt are as follows (in millions):

March 31, 2010

December 31, 2009Carrying
Amount

Fair
Value

Carrying
Amount

Fair
ValueSenior credit facility

£
1,639.6

£
1,638.2

£
3,112.8

£
3,043.58.75% U.S. dollar loan notes due 2014


58.8


60.1


55.3


57.79.75% sterling loan notes due 2014


78.8


81.2


78.8


81.68.75% euro loan notes due 2014


42.1


44.6


41.9


43.79.125% U.S. dollar senior notes due 2016


362.2


382.4


340.2


359.46.50% U.S. dollar loan notes due 2016


646.0


791.6


606.8


723.19.50% U.S. dollar senior notes due 2016


864.0


987.4


810.9


895.89.50% euro senior loan notes due 2016


153.8


186.3


152.9


173.58.375% U.S. dollar senior notes due 2019


388.8


395.9


365.1


377.08.875% sterling senior notes due 2019


344.5


362.2


344.5


355.36.50% U.S. dollar senior secured notes due 2018


648.7


646.3





7.00% sterling senior secured notes due 2018


862.1


892.5





Floating rate loan note due 2012


65.9


65.9


61.9


61.9Other loan notes due to affiliates


457.0


457.0


462.8


462.8


Concentrations of Credit Risk

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash, trade receivables and derivative
contracts.

At
March 31, 2009 and December 31, 2009, we had £402.7 million and £415.9 million, respectively, in cash and cash equivalents. These
cash and cash equivalents are on deposit with major financial

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Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 4Fair Value Measurements (Continued)

institutions
and, as part of our cash management process, we perform regular evaluations of the credit standing of these institutions using a range of metrics. We have not experienced any losses in
cash balances and do not believe we are exposed to any significant credit risk on our cash balances.

Concentrations
of credit risk with respect to trade receivables are limited because of the large number of customers and their dispersion across geographic areas. We perform periodic
credit evaluations of our Business segment customers' financial condition and generally do not require collateral. No single group or customer represents greater than 10% of total accounts receivable.

Concentrations
of credit risk with respect to derivative contracts are focused within a limited number of international financial institutions with whom we operate and relate only to
derivatives with recorded asset balances at March 31, 2010. We perform regular reviews of the financial institutions with which we operate as to their credit worthiness and financial condition.
We have not experienced non-performance by any of our derivative counterparties nor do we expect there to be non-performance risks associated with our counterparties. At
March 31, 2010, based on market values, we had 56.7% of our derivative contracts with three financial institutions, each with more than 10% of our total exposure. At December 31, 2009,
based on market values, we had 68.2% of our derivative contracts with three financial institutions, each with more than 10% of our total exposure.

Note 5Derivative Financial Instruments and Hedging Activities

Strategies and Objectives for Holding Derivative Instruments

Our results could be 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. 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 on
our consolidated statements of operations.

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 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.

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

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Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities (Continued)

In
respect 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. 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 derivative 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 or
losses on derivative instruments in the statement of operations. As a result of our effectiveness assessment at March 31, 2010, 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 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. 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.

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities (Continued)

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

March 31,
2010

December 31,
2009Included within current assets:Accounting HedgeForeign currency forward rate contracts

£
0.5

£
0.3Economic HedgeForeign currency forward rate contracts


4.7


1.9£
5.2

£
2.2Included within non-current assets:Accounting HedgeCross-currency interest rate swaps

£
139.4

£
63.7Economic HedgeCross-currency interest rate swaps


157.2


169.5Other





1.9£
296.6

£
235.1Included within current liabilities:Accounting HedgeForeign currency forward rate contracts

£


£
0.3Interest rate swaps





12.0Economic HedgeForeign currency forward rate contracts


0.1


2.4Interest rate swaps


3.3


3.1£
3.4

£
17.8Included within non-current liabilities:Accounting HedgeInterest rate swaps

£


£
21.0Cross-currency interest rate swaps


10.9


27.6Economic HedgeInterest rate swaps


56.8


Cross-currency interest rate swaps


39.0


58.2£
106.7

£
106.8


Cross-Currency Interest Rate SwapsHedging the Interest Payments of Senior Notes and Senior Credit Facility

As of March 31, 2010, 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 payments on the U.S. dollar and euro denominated senior notes and senior credit facility.

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities (Continued)

The terms of our outstanding cross-currency interest rate swaps at March 31, 2010 were as follows:

Hedged item/Maturity date

Hedge type

Notional
amount
due from
counterparty

Notional
amount
due to
counterparty

Weighted average
interest rate due
from counterparty

Weighted average
interest rate due
to counterparty(in millions)

(in millions)$89.3m senior notes due 2014October 2011

Economic

$
89.3

£
62.9

8.75%

9.42%$550m senior notes due 2016August 2016

Accounting


550.0


301.2

9.13%

8.54%$1,350m senior notes due 2016August 2016

Accounting


1,350.0


835.5

9.50%

9.98%$1,000m senior notes due 2016November 2016

Economic


1,000.0


505.6

6.50%

6.95%$600m senior notes due 2019October 2019

Accounting


264.3


159.8

8.38%

9.03%October 2011

Economic


335.7


228.0

8.38%

9.23%October 2011 to October 2019

Accounting


335.7


203.0

8.38%

9.00%$1,000m senior secured notes due 2018January 2018

Accounting


1,000.0


615.4

6.50%

7.01%Senior credit facilitySeptember 2012

Economic


275.9


149.7

3 month $
LIBOR + 2.00%

3 month £
LIBOR + 2.13%$
5,200.9

£
3,061.1€47.3m senior notes due 2014October 2011

Economic

€
47.3

£
43.8

8.75%

8.90%€180m senior notes due 2016August 2016

Accounting


180.0


158.6

9.50%

10.18%Senior credit facilitySeptember 2012

Economic


299.8


207.9

3 month
EURIBOR + 2.00%

3 month
LIBOR + 2.16%€
527.1

£
410.3OtherDecember 2012

Economic

€
56.7

£
40.3

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%€
100.0

£
71.1December 2012

Economic

£
38.8

€
56.7

3 month
LIBOR + 2.40%

3 month
EURIBOR + 2.38%December 2013

Economic


29.7


43.3

3 month
LIBOR + 2.90%

3 month
EURIBOR + 2.88%£
68.5

€
100.0


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Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities (Continued)

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 November 2016 hedging the $1,000 million senior notes due 2016.

Interest Rate SwapsHedging of Interest Rate Sensitive Obligations

As of March 31, 2010, 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, which accrue at variable rates based on LIBOR. The terms of our outstanding interest rate swap contracts at March 31,
2010 were as follows:

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 facilityApril 2010

Economic

£
3,000.0

3 month LIBOR

2.18%April 2010 to April 2011

Economic


200.0

3 month LIBOR

2.58%April 2010 to September 2012

Economic


1,300.0

3 month LIBOR

3.07%OtherApril 2010 to March 2013

Economic

£
300.0

3 month LIBOR

3.28%April 2010 to March 2013

Economic


300.0

1.86%

3 month LIBOR


Foreign Currency Forward Rate ContractsHedging Committed and Forecasted Transactions

As of March 31, 2010, we had outstanding foreign currency forward rate contracts to purchase U.S. dollars and South African rand
to hedge committed and forecasted purchases. The terms of our outstanding foreign currency forward rate contracts at March 31, 2010 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)Commited and forecasted purchasesApril 2010 to December 2010

Economic

$
100.6

£
61.7


1.6306June 2010 to December 2010

Accounting

$
8.5

£
5.3


1.6106April 2010 to June 2010

Accounting


ZAR 13.2

£
1.0


12.6893


Cash Flow Hedges

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

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Table of Contents

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED

VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 5Derivative Financial Instruments and Hedging Activities (Continued)

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.

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 statement of operations in the period in which they occur. During the three months ended March 31, 2010, there were no ineffectiveness losses recognized. The following tables present the
effective amount of gain or (loss) recognized in other comprehensive income and amounts reclassified to earnings during the three months ended March 31, 2010 (in millions):

Total

Interest
rate
swaps

Cross-currency
interest rate
swaps

Forward
foreign
exchange
contracts

Tax
EffectBalance at December 31, 2009

£
(55.3
)
£
(32.4
)
£
(6.9
)
£


£
(16.0
)Amounts recognized in other comprehensive income


95.8





95.1


0.7


Amounts reclassified as a result of cash flow hedge discontinuance


32.4


32.4








Amounts reclassified to earnings impacting:Foreign exchange gain


(127.9
)




(127.9
)




Interest expense


(2.7
)




(2.7
)




Operating costs


(0.2
)







(0.2
)

Balance at March 31, 2010

£
(57.9
)
£


£
(42.4
)
£
0.5

£
(16.0
)


Assuming no change in interest rates or foreign exchange rates for the next twelve months, the amount of pre-tax gains that would be
reclassified from other comprehensive income to earnings would be nil, £6.1 million and £0.5 million relating to interest rate swaps, cross-currency interest rate
swaps and forward foreign exchange contracts, respectively.

Note 6Restructuring and Other Charges

Restructuring and other charges of £0.4 million for the three months ended March 31, 2010 related primarily to employee termination and lease exit costs in
connection with the restructuring program initiated in the last quarter of 2008 partially offset by revisions in cash flow estimates for lease exit costs in relation to our historic and 2006
acquisition restructuring activities. Restructuring and other charges of £5.1 million for the three months ended March 31, 2009 related primarily to employee termination
costs in connection with the restructuring program initiated in the last quarter of 2008.

In
connection with our 2008 restructuring program, we expect to incur operating expenditures of between £140 million to £155 million and capital
expenditures of between £40 million to £45 million in connection with this program over a three-year period.

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 6Restructuring and Other Charges (Continued)

The following table summarizes our historical restructuring accruals, the restructuring accruals resulting from the acquisitions made by us during 2006 and the accruals for the
restructuring plan announced in 2008 by Virgin Media (in millions):

Historical
Restructuring
Accruals

2006
Acquisition
Restructuring
Accruals

2008
Restructuring
AccrualsThree months ended March 31, 2010

Lease
Exit Costs

Lease
Exit Costs

Involuntary
Employee
Termination
and Related
Costs

Lease and
Contract
Exit Costs

TotalBalance, December 31, 2009

£
12.2

£
27.0

£
1.7

£
15.0

£
55.9Amendments offset against goodwill





(0.3
)







(0.3
)Charged to expense


0.4





0.4


1.3


2.1Revisions


(0.4
)

(1.1
)

(0.2
)




(1.7
)Utilized


(1.3
)

(1.8
)

(1.0
)

(1.6
)

(5.7
)Balance, March 31, 2010

£
10.9

£
23.8

£
0.9

£
14.7

£
50.3


Note 7Share Based Compensation

Stock Option Plans

We are indirect, wholly owned subsidiaries of Virgin Media Inc. Accordingly, we have no stock-based compensation plans. As at
March 31, 2010, certain of our employees participated in the stock-based compensation plans of Virgin Media, as described in Virgin Media's 2009 Annual Report.

Note 8Comprehensive Loss

Comprehensive loss comprises (in millions):

Three months
ended
March 31,2010

2009Net loss for period

£
(151.7
)
£
(151.8
)Currency translation adjustment


0.1


(0.4
)Net unrealized gains (losses) on derivatives, net of tax


95.8


(22.1
)Reclassification of derivative gains to net income, net of tax


(98.4
)

(3.5
)Comprehensive loss

£
(154.2
)
£
(177.8
)


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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 8Comprehensive Loss (Continued)

The components of accumulated other comprehensive (loss) income, net of taxes, were as follows (in millions):

March 31,
2010

December 31,
2009Foreign currency translation

£
(0.1
)
£
(0.2
)Pension liability adjustments


(82.3
)

(82.3
)Net unrealized gains on derivatives


(57.9
)

(55.3
)£
(140.3
)
£
(137.8
)


Note 9Related Party Transactions

Virgin Media Inc. and its consolidated subsidiaries

We are wholly owned subsidiaries of Virgin Media Inc. We charge Virgin Media Inc. and certain of its group companies for
operating costs and selling, general and administrative expenses incurred by us on their behalf. The following information summarizes our significant related party transactions with Virgin
Media Inc. and its group companies (in millions):

Three months
ended
March 31,2010

2009Operating costs

£
10.6

£
13.4Selling, general and administrative expenses


11.3


12.4


The above recharges are recorded in operating costs and selling, general and administrative expenses and offset the respective costs incurred.

Note 10Contingent Liabilities

We are involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employee and employee benefits which arise in the ordinary course of
our business. We recognize a provision for a liability when management believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We
believe we have adequate provisions for any such matters. We review these provisions at least quarterly and adjust these provisions to reflect the impact of negotiations, settlements, rulings, advice
of legal counsel and other information and events pertaining to a particular case. Whilst litigation is inherently unpredictable, we believe that we have valid defenses with respect to legal matters
pending against us. Nevertheless, it is possible that cash flows or results of operations could be materially affected in any particular period by
the unfavorable resolution of one or more of these contingencies, or because of the diversion of management's attention and the creation of significant expenses.

Our
revenue generating activities are subject to Value Added Tax, or VAT. The U.K. tax authorities are seeking to challenge our VAT treatment of certain of these activities. As a result,
we have

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 10Contingent Liabilities (Continued)

estimated
contingent losses totaling £35.9 million as of March 31, 2010 that are not accrued for, as we do not deem them to be probable of resulting in a liability. We
continue to evaluate the likelihood of the contingent losses as additional information becomes available and, to the extent an accrual becomes necessary, it will be recognized in earnings in the
period when such amount becomes probable. Any challenge made could be subject to court proceedings before any settlement would be required and therefore the timescale for resolution is not expected to
occur within the next financial year.

Note 11Industry Segments

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. While both companies have operating segments, consisting of Consumer, Business
and Content, which are consistent with Virgin Media's operating segments, financial information is only prepared and reviewed by the CODM at the consolidated level. As such, there are no separable
reportable segments for either of the companies.

Virgin
Media's Consumer segment, is its primary segment, consisting of the distribution of television programming, broadband and fixed line telephone services to residential customers on
its cable network, the provision of broadband and fixed line telephone services to residential customers outside of its cable network, and the provision of mobile telephony and broadband to
residential customers.

Virgin
Media's Business segment comprises its operations carried out through Virgin Media 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.

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

Segment
contribution, which is operating income (loss) 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 Virgin Media's Consumer and Business segments.

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VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED
VIRGIN MEDIA INVESTMENTS LIMITED

COMBINED NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(unaudited)

Note 11Industry Segments (Continued)

The
following segment information is based on the consolidated results of Virgin Media for the three month periods ended March 31, 2010 and 2009 (in millions):

Three months ended
March 31, 2010Consumer

Business

Content

TotalRevenue

£
789.5

£
139.9

£
33.8

£
963.2Inter segment revenue








7.1


7.1Segment contribution

£
480.5

£
76.1

£
6.6

£
563.2




Three months ended
March 31, 2009Consumer

Business

Content

TotalRevenue

£
753.3

£
149.8

£
32.6

£
935.7Inter segment revenue








6.6


6.6Segment contribution

£
438.2

£
82.6

£
6.9

£
527.7


Revenue in the table above includes £25.8 million and £28.1 million for the three months ended
March 31, 2010 and 2009, respectively, related to subsidiaries of Virgin Media that are not consolidated in either of the companies. The reconciliation of total segment contribution to our
consolidated operating income is as follows (in millions):

Three months
ended
March 31,2010

2009Total segment contribution

£
563.2

£
527.7Other operating and corporate costs


206.8


215.4Depreciation


242.9


232.7Amortization


37.1


61.2Operating loss of subsidiaries not consolidated in either of the companies


(1.6
)

(3.2
)Restructuring and other charges


0.4


5.4Consolidated operating income

£
77.6

£
16.2


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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the condensed consolidated financial statements and
related notes that appear elsewhere in this document.

Overview

We are a leading provider of entertainment and communications services in the U.K., offering "quad-play" broadband
internet, television, mobile telephony and fixed line telephony services. We are one of the U.K.'s largest providers of residential broadband internet, pay television and fixed line telephony services
by number of customers. We believe our advanced, deep fiber access network enables us to offer faster and higher quality broadband services
than our digital subscriber line, or DSL, competitors. As a result, we provide our customers with a leading next generation broadband service and one of the most advanced TV on-demand
services available in the U.K. market. We are also one of the U.K.'s largest mobile virtual network operators by number of customers. In addition, we provide a complete portfolio of voice, data and
internet solutions to leading businesses, public sector organizations and service providers in the U.K. through Virgin Media Business (formerly ntl:Telewest Business). We also provide a broad range of
programming through Virgin Media Television, or Virgin Media TV, which operates our wholly owned channels, such as Virgin1, Living and Bravo; and through UKTV, our joint ventures with BBC Worldwide.

Our
operating segments are as follows:



Our
revenue by segment for the three months ended March 31, 2010 and 2009 was as follows (in millions):

Three months ended March 31,2010

2009Consumer Segment

£
789.5


82.0
%
£
753.3


80.5
%Business Segment


139.9


14.5


149.8


16.0Content Segment


33.8


3.5


32.6


3.5£
963.2


100.0
%
£
935.7


100.0
%


For further discussion of our business, please refer to our 2009 Annual Report.

Factors Affecting Our Business

A number of factors affect the performance of our business, at both a general and segment level.

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General

Factors that affect all of the segments in which we operate are as follows:

General Macroeconomic Factors.General macroeconomic factors in the U.K. have an impact on our business. For example, during an
economic slowdown,
potential and existing customers may be less willing or able to purchase our products or upgrade their services. We may also experience increased churn and higher bad debt expense. In addition,
expenditures by advertisers are sensitive to economic conditions and tend to decline in recessionary periods and other periods of uncertainty. We have experienced a decrease in advertising revenues
generated through our television programming and broadband internet platforms, except to the extent offset by an increase in our share of the advertising market.

Currency Movements.We encounter currency exchange rate risks because substantially all of our revenue and operating costs are
earned and paid
primarily in U.K. pounds sterling, but we pay interest and principal obligations with respect to a portion of our existing indebtedness in U.S. dollars and euros. We have in place hedging programs
that seek to mitigate the risk from these exposures. While the objective of these programs is to reduce the volatility of our cash flows and earnings caused by changes in underlying currency exchange
rates, not all of our exposures are hedged, and not all of our hedges are designated as such for accounting purposes. Additionally, we do not hedge the principal portion of our convertible senior
notes. We also purchase goods and services in U.S. dollars, euros and South African rand, such as TV programming, customer premise equipment and network maintenance services and some of these
exposures are not hedged.

Integration and Restructuring Activities.In 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 order to create a fully-integrated, customer-focused organization. We anticipate significant cost savings from the
plan and that the annual savings from and after 2010 will exceed the annual costs incurred in connection with the plan. These costs will include purchases of fixed assets, lease and contract exit
costs, employee termination costs and other restructuring and restructuring-related expenses, some of which will be classified as restructuring costs. In total, we expect to incur operating
expenditures of between £140 million to £155 million and capital expenditures of between £40 million to £45 million in
connection with this plan over a three-year period. Our financial performance may be negatively affected if we are unable to implement our restructuring plan successfully and realize the
anticipated benefits.

Capital Expenditures.Our business requires substantial capital expenditures on a continuing basis for various purposes,
including expanding,
maintaining and upgrading our cable network, investing in new customer acquisitions, and offering new services. If we do not continue to invest in our network and in new technologies, our ability to
retain and acquire customers may be hindered. Therefore, our liquidity and the availability of cash to fund capital projects are important drivers of our revenue. When our liquidity is restricted, so
is our ability to meet our capital expenditure requirements.

Consumer Segment

In our Consumer segment, cable customers account for the majority of our revenue. The number of customers, the number and types of
services that each customer uses and the prices we charge for these services drive our revenue. Our profit is driven by the relative margins on the types of services we provide to these customers and
by the number of services that we provide to them and, with respect to our fixed and mobile telephone customers, by usage levels of our services. For example, cable broadband internet is more
profitable than our television services and, on average, our "triple-play" customers are more profitable than "double-play" or "single-play" customers. Similarly,
over the service term our contract mobile customers are more profitable than our prepay mobile customers, and

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provide
a better opportunity for cross-sell of our cable products. We actively promote "quad-play" services and our packaging of services and our pricing are designed to
encourage our customers to use multiple services such as television, fixed and mobile telephone and broadband at a lower price than each stand-alone product on a combined basis. Factors particularly
affecting our Consumer segment include average revenue per user, or ARPU, churn, competition, seasonality and distribution.

Cable ARPU.Cable ARPU is a measure we use to evaluate how effectively we are realizing potential revenue from our residential
cable customers on our
network. We believe that our "triple-play" cable offering of television, broadband and fixed line telephone services is attractive to our existing cable customer base and generally allows
us to increase our cable ARPU by facilitating the sale of multiple services to each customer. Cable ARPU excludes any revenue from our mobile and non-cable customers.

Mobile ARPU.Mobile ARPU is a measure we use to evaluate how effectively we are realizing revenue from our mobile customers. The
mix of prepay and
contract customers and level of usage have a material impact on Mobile ARPU. The mix of our customer base is changing as we focus on acquiring higher lifetime value contract customers, rather than
lower lifetime value prepay customers, particularly through cross-selling to our cable customer base. Consequently, the number of prepay customers is expected to continue to decline in 2010, along
with prepay usage.

Churn.Churn is the proportion of customers who stop subscribing to any of our services. An increase in our churn can lead to
increased costs and
reduced revenue. We continue to focus on improving our customer service and enhancing and expanding our service offerings to existing customers in order to manage our churn rates. Our ability to
reduce our churn rates beyond a base level is limited by factors like competition, the economy and, in respect of our cable business, customers moving outside our network service area, in particular
during the summer season. Managing our churn rates is a significant component of our business plan. Our churn rates may increase if our customer service is seen as unsatisfactory, if we are unable to
deliver a service without interruption, if we fail to match offerings by our competitors, if we increase our prices, if there is an improvement in the U.K. housing market or if there is a prolonged
economic downturn.

Competition.Our ability to acquire and retain customers and increase revenue depends on our competitive strength. There is
significant and
increasing competition in the market for our consumer services, including broadband and telephone services offered by BT Group plc, or BT; resellers or local loop unbundlers, such as British
Sky Broadcasting Group plc, or BSkyB, and Talk Talk Telecom Group PLC; alternative internet access services like DSL; satellite television services offered by BSkyB and by BBC and ITV
through Freesat; free-to-air digital terrestrial television offered through Freeview; internet protocol television offered by BT; and mobile telephone, television and data
services offered by other mobile network operators, or MNOs, including O2, Orange, Vodafone, T-Mobile and 3 U.K., and from other mobile virtual network operators, including Tesco Mobile,
Lebara, Carphone Warehouse and ASDA. In addition, certain
competitors, such as BT, BSkyB and large MNOs are dominant in markets in which we compete and may use their dominance in those markets to offer bundled services that compete with our product
offerings. As a result of increased competition, we have had to, and may be required to continue to, adjust our pricing and offer discounts to new and existing customers in order to attract and retain
customers.

Seasonality.Some of our Consumer revenue streams are subject to seasonal factors. For example, telephone usage revenue by
residential customers
tends to be slightly lower during summer holiday months. In the fourth quarter of each year, our mobile customer acquisition and retention costs typically increase due to the Christmas holiday period.
Our Mobile ARPU generally decreases in the first quarter of each year due to the fewer number of days in February and lower usage after the Christmas holiday period. Our churn rates include persons
who disconnect their service because of

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moves,
resulting in a seasonal increase in our churn rates during the summer months when higher levels of U.K. house moves occur and students leave their accommodation between academic years.

Distribution.We rely, to a large extent, upon third parties to distribute our mobile products and services. If any of these
distribution partners
were to cease to act as distributors for our products and services, or the commissions or other costs charged by the third parties were to increase, our ability to gain new mobile customers or retain
existing customers may be adversely affected. We also distribute our products through our own retail outlets.

Business Segment

Factors particularly affecting our Business segment include competition, pricing and operational effectiveness.

Competition.Our ability to acquire and retain business customers and increase revenue depends on our competitive strength.
There is significant and
increasing competition in the market for our business services, including data and voice services offered by BT, Cable & Wireless plc, virtual network operators and systems integrators.
While BT represents the main competitive threat nationally due to its network reach and product portfolio, we also compete with regional providers, such as COLT Telecom
Group plc, which have a strong network presence within limited geographic areas. Recently we have also faced increasing competition from the launch of services by MNOs.

Pricing.Competition in the U.K. business telecommunications market continues to be based on value for money, the key components
of which are
quality, reliability and price. Particularly, in the current challenging economic conditions, price is becoming an increasingly important factor. Certain of BT's product pricing is regulated by the
U.K. Office of Communications; however, in respect of non-regulated product pricing, the market is increasingly price sensitive.

Operational Effectiveness.Because of the extensive use of optical fiber in our access networks, we are also able to provide
high-speed
ethernet services directly to business customers and provide nationwide area networking to these customers via our core networks. Business customers require timely installation services and our
ability to meet required timescales and commence providing services may impact our revenues. We regularly rely on third-party suppliers to connect business customers and we have a variety of
alternative methods to connect our national telecommunications network to the premises of business customers that are located outside of our cabled areas.

Content Segment

Factors particularly affecting our Content segment include competition, the number of buyers for our television channels across limited
distribution platforms, our access to content, seasonality and advertising revenue.

Competition.Our television channels compete with other broadcasters for advertising revenues, subscription revenues and
programming rights. IDS, our
advertising sales department, competes with advertising sales operations representing other television broadcasters. The level of this competition is increasing as the advertising sales market
consolidates and is higher in a poor macroeconomic climate.

Limited Number of Buyers and Distribution Platforms.All of our channels are carried on our cable platform and on the satellite
platform owned by
BSkyB. A few of our channels are also carried on the free-to-air digital terrestrial television platform known as Freeview.
Therefore, the principal third-party buyer of programming services from our television channels is BSkyB. Other than BSkyB, there are no significant buyers of our programming services.

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Access to Content.Most of the television content on the Virgin Media TV channels is purchased, mainly from the U.S., and
because there is a limited
supply of content available and an increasing number of digital channels in the U.K., Virgin Media TV has experienced and may continue to experience an increase in the cost of its imported
programming. Exchange rate movements have also resulted in increased programming costs and may continue to do so.

Seasonality.Our Content segment incurs increased costs in the fourth quarter of each year due to the need to provide enhanced
programming over the
important Christmas holiday period.

Advertising Revenue.The majority of revenue for Virgin Media TV is from advertisers. Consequently, Virgin Media TV's revenue is
directly affected by
changes in the total spend on television advertising in the U.K., including changes related to a sustained economic downturn, the viewing levels for its channels and the proportion of the U.K.
advertising market represented by IDS.

Critical Accounting Policies

The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets and contingent liabilities. We base our judgments on historical experience and on various other assumptions that we
believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates under different assumptions or conditions.

For
a discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our consolidated financial statements, please refer to our 2009
Annual Report.

Consolidated Results of Operations

Consolidated Results of Operations for the Three Months Ended March 31, 2010 and 2009

Revenue

For the three months ended March 31, 2010, revenue increased by 2.9% to £963.2 million from
£935.7 million for the three months ended March 31, 2009. Increases in revenue recognized in our Consumer and Content segments were partially offset by a decline in revenue
in our Business segment, as more fully described in the segment discussions below.

Operating Costs

Operating costs for the three months ended March 31, 2010 and 2009 were as follows (in millions):

Three months ended
March 31,Increase/
(Decrease)2010

2009Operating costs:Consumer cost of sales

£
226.2

£
239.4


(5.5
)%Business cost of sales


44.9


51.0


(12.0
)Content cost of sales


24.6


23.2


6.0Network and other operating costs


103.4


100.1


3.3Total operating costs

£
399.1

£
413.7


(3.5
)%


For the three months ended March 31, 2010, operating costs decreased by 3.5% to £399.1 million from
£413.7 million during the same period in 2009. This decrease was primarily attributable to

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declines
in Consumer segment and Business segment cost of sales, partially offset by increased Content segment cost of sales and network and other operating costs. Consumer cost of sales decreased
primarily as a result of lower fixed line telephony costs as a result of lower usage along with lower mobile telephone costs as a result of lower wholesale rates. These declines were partially offset
by increased costs in relation to greater bundled volumes provided to mobile contract customers. Business cost of sales decreased primarily as a result of lower Business segment revenue. Content cost
of sales increased as a result of increased programming investment to support growth in the number of viewers of our channels. Network and other operating costs increased mainly due to greater install
activity resulting from customer additions during the period. As a result of these changes, operating costs as a percentage of revenue decreased to 41.4% for the three months ended March 31,
2010 from 44.2% for the three months ended March 31, 2009.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended March 31, 2010 and 2009 were as follows (in millions):

Three months ended
March 31,Increase/
(Decrease)2010

2009Selling, general and administrative expenses:Employee and outsourcing costs

£
117.8

£
115.3


2.2
%Marketing costs


41.0


31.3


31.0Facilities


17.7


20.5


(13.7
)Other


31.2


42.6


(26.8
)Total selling, general and administrative expenses

£
207.7

£
209.7


(1.0
)%


For the three months ended March 31, 2010, selling, general and administrative expenses decreased by 1.0% to
£207.7 million from £209.7 million for the three months ended March 31, 2009. This decrease was primarily due to lower facilities and other costs,
partially offset by higher marketing costs and employee and outsourcing costs. Lower facilities costs were mainly due to lower operating costs resulting from site closures in prior periods. Lower
other costs were due to a reduction in IT and legal expenses as compared to the prior period. Higher employee and outsourcing
costs were mainly due to costs related to an increase in share based compensation and pension costs. Marketing costs were higher primarily due to increased marketing activity in our Consumer segment
and the cost of rebranding in our Business segment to Virgin Media Business.

Restructuring and Other Charges

Restructuring and other charges were £0.4 million in the three months ended March 31, 2010 which included
£1.5 million in respect of involuntary employee termination costs and lease exit costs in connection with the restructuring program initiated in the fourth quarter of 2008 offset by
revisions in cash flow estimates for our historical programs of £1.1 million. Restructuring and other charges were £5.4 million in the three months ended
March 31, 2009, comprised of £9.9 million in respect of involuntary employee termination costs and lease exit costs in connection with the restructuring program initiated in
the fourth quarter of 2008, offset by a £4.5 million reduction in the accruals from lease exit costs in connection with our historical programs.

Depreciation Expense

For the three months ended March 31, 2010, depreciation expense increased by 4.4% to £242.9 million from
£232.7 million for the three months ended March 31, 2009. The increase in

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depreciation
expense was primarily a result of increases in depreciation in respect of new fixed assets, partially offset by fixed assets becoming fully depreciated.

Amortization Expense

For the three months ended March 31, 2010, amortization expense decreased to £37.1 million from
£61.2 million for the three months ended March 31, 2009. The decline in amortization expense was primarily attributable to the cessation of amortization of certain intangible
assets that became fully amortized in 2009.

Interest Income and Other, Net

For the three months ended March 31, 2010, interest income and other decreased to £1.1 million, from
£3.3 million, for the three months ended March 31, 2009, as a result of lower interest rates throughout the period.

Interest Expense

For the three months ended March 31, 2010, interest expense increased to £123.3 million from
£109.0 million for the three months ended March 31, 2009, primarily as a result of refinancing lower cost bank debt with higher cost bond debt. We paid cash interest of
£109.0 million for the three months ended March 31, 2010 and £131.6 million for the three months ended March 31, 2009. The decrease in cash interest
payments was primarily due to differences in the timing of interest payments on our senior credit facility and senior notes.

Loss on Extinguishment of Debt

The loss on extinguishment of debt of £32.9 million in the three months ended March 31, 2010 related to the
write-off of deferred financing costs resulting from repayments of our senior credit facility from the net proceeds of the senior secured bond issuance on January 19, 2010.

Share of Income From Equity Investments

For the three months ended March 31, 2010, share of income from equity investments was £7.6 million as
compared with income of £2.5 million for the same period in 2009. The share of income from equity investments in the three months ended March 31, 2010 was primarily our
proportionate share of the income earned by UKTV. The share of income from equity investments in the three months ended March 31, 2009 was largely comprised of our proportionate share of the
income earned by UKTV, partially offset by our share of the losses
incurred by Setanta Sports News. Setanta Sports News ceased broadcasting on June 23, 2009 when Setanta Sports Limited entered administration.

Loss on Derivative Instruments

The loss on derivative instruments of £21.0 million in the three months ended March 31, 2010 was mainly
driven by the reclassification of losses on derivative contracts previously designated as accounting hedges from accumulated other comprehensive income to earnings, partially offset by gains on
economic hedges resulting from the pound sterling weakening against the U.S. dollar. The loss from derivative instruments of £21.2 million in the three months ended March 31,
2009 was mainly driven by the euro weakening against the pound sterling in the quarter, which resulted in a reduction in the fair value of euro denominated cross-currency interest rate swaps not
designated as hedges for accounting purposes.

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Foreign Currency Loss

The foreign currency loss of £69.8 million in the three months ended March 31, 2010 was primarily due to the
weakening of the pound sterling relative to the U.S. dollar and related remeasurement losses on our convertible senior notes and the U.S. dollar denominated tranches of our senior credit facility. The
foreign currency loss of £11.9 million in the three months ended March 31, 2009 was primarily due to the weakening of the pound sterling relative to the U.S. dollar and
related remeasurement losses on our convertible senior notes.

Income Tax Benefit (Expense)

For the three months ended March 31, 2010, income tax benefit was £1.9 million as compared with income tax
expense of £9.6 million for the same period in 2009. The income tax benefit relates primarily to consortium tax relief receivable from
our joint venture operations. The income tax expense in the prior year primarily related 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.

Net Loss From Continuing Operations

For the three months ended March 31, 2010, net loss from continuing operations increased to £160.4 million
compared with a net loss of £132.9 million for the same period in 2009 due to the factors discussed above.

Loss From Discontinued Operations

For the three months ended March 31, 2010, net loss from discontinued operations was nil compared with a loss of
£21.1 million for the same period in 2009 relating to our former sit-up operations.

Net Loss From Continuing Operations Per Share

Basic and diluted net loss from continuing operations per common share for the three months ended March 31, 2010 was
£0.49 compared to £0.41 for the three months ended March 31, 2009. Basic and diluted net loss from continuing operations per share is computed using a weighted average
of 329.7 million shares issued in the three months ended March 31, 2010 and a weighted average of 328.2 million shares issued for the same period in 2009. Options, warrants and
shares issuable under our convertible senior notes and shares of restricted stock held in escrow outstanding at March 31, 2010 and March 31, 2009 are excluded from the calculation of
diluted net loss from continuing operations per share, since the securities are anti-dilutive.

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Segmental Results of Operations from Continuing Operations for the Three Months Ended March 31, 2010 and 2009

A description of the products and services, as well as financial data, for each segment can be found in note 10 to Virgin
Media's condensed consolidated financial statements.

The
reportable segments disclosed in this quarterly report on Form 10-Q are based on our management organizational structure as of March 31, 2010. Future
changes to this organizational structure may result in changes to the reportable segments disclosed.

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, 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.

In
the last quarter of 2009 we changed the description that we previously used for "Revenue Generating Units", or RGUs to "Products". There is no change to the definition or calculation.
We also have changed the description that we previously used for "on-net" and "off-net" to "cable" and "non-cable" respectively. There is no change to the
definition.

Consumer Segment

The summary combined results of operations of our Consumer segment for the three months ended March 31, 2010 and 2009 were as
follows (in millions):

Three months ended
March 31,Increase/
(Decrease)2010

2009Revenue

£
789.5

£
753.3


4.8
%Segment contribution


480.5


438.2


9.7




Our Consumer segment revenue for the three months ended March 31, 2010 and 2009 was as follows (in millions):

Three months ended March 31,Increase/
(Decrease)2010

2009Revenue:Cable

£
640.0

£
604.0


6.0
%Mobile(1)


131.9


135.3


(2.5
)Non-cable


17.6


14.0


25.7Total revenue

£
789.5

£
753.3


4.8
%


---

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For the three months ended March 31, 2010, revenue from our Consumer segment customers increased by 4.8% to
£789.5 million from revenue of £753.3 million for the three months ended March 31, 2009. This increase was primarily due to an increase in cable and
non-cable revenues, partially offset by a decrease in mobile revenue.

The
increase in cable revenue was primarily due to selective price increases as well as additional cable customers, partially offset by continued decline in fixed line telephony usage
and higher price discounting to stimulate customer activity and retention in light of competitive factors in the marketplace.

Cable
ARPU increased to £45.01 for the three months ended March 31, 2010 from £42.74 for the three months ended March 31, 2009. The increase in
cable ARPU was mainly due to the selective price increases and successful up-selling and cross-selling to existing customers, partially offset by declining telephony usage. Our focus on
acquiring new bundled customers and on cross-selling to existing customers is demonstrated by cable products per customer increasing to 2.48 at March 31, 2010 from 2.43 at March 31,
2009, and by "triple-play" penetration growing to 61.9% at March 31, 2010 from 57.6% at March 31, 2009. A triple-play customer is a customer who subscribes to our
cable television, broadband and fixed line telephone services.

For
the three months ended March 31, 2010, mobile revenue decreased to £131.9 million from £135.3 million for the three months ended
March 31, 2009. The decrease was attributable to equal declines in both service and equipment revenues. The service revenue decrease was mainly driven by the declining base of prepay mobile
subscribers together with lower mobile termination rates that came into force following regulatory changes in April 2009, partially offset by an increase in contract mobile subscribers and increased
data revenue. The equipment revenue decrease was due to fewer handset sales and lower average revenue per unit.

Mobile
ARPU increased to £13.70 for the three months ended March 31, 2010 from £13.14 for the three months ended March 31, 2009. The increase was
primarily due to the increased proportion of our higher value contract customers relative to the total number of mobile customers, which rose to 33.7% at March 31, 2010 from 21.8% at
March 31, 2009, and increased usage of voice and texts, partially offset by declining rates for those services and lower mobile termination rates as described above.

Non-cable
revenue for the three months ended March 31, 2010 increased to £17.6 million from £14.0 million for the three months
ended March 31, 2009
following the launch of wholesale line rental in August 2009 as discussed further in Summary Non-cable Statistics below.



For the three months ended March 31, 2010, Consumer segment contribution increased to £480.5 million from
£438.2 million for the three months ended March 31, 2009. This increase was primarily due to the net increase in Consumer revenue, as described above, and lower telephony
costs resulting from lower telephony usage, partially offset by higher selective marketing expense.



Selected statistics for our cable customers, for the three months ended March 31, 2010 as well as the four prior quarters are
set forth in the table below. Our net customer movement for the three months ended March 31, 2010 was an increase of 38,300 customers, being the net of gross additions and disconnections (net
additions). The increase in net additions compared with the three months ended March 31, 2009 was primarily the result of higher gross additions and fewer disconnections which we believe is the
result of improved product propositions in recent periods. Customer churn remained flat at 1.1% for both the three months ended March 31, 2010 and 2009. The total number of

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cable
products grew to 11,817,700 at March 31, 2010 from 11,440,700 at March 31, 2009, representing a net increase in products of 377,000.

Three months endedMarch 31,
2010

December 31,
2009

September 30,
2009

June 30,
2009

March 31,
2009Opening customers(1)


4,723,500


4,694,900


4,686,800


4,713,000


4,705,900Customer additions


193,100


198,600


213,800


159,500


167,200Customer disconnects


(154,800
)

(170,000
)

(205,700
)

(185,700
)

(160,100
)Net customer movement


38,300


28,600


8,100


(26,200
)

7,100Closing customers(1)


4,761,800


4,723,500


4,694,900


4,686,800


4,713,000Cable churn(1)(2)


1.1
%

1.2
%

1.5
%

1.3
%

1.1
%Cable products:Television(1)


3,729,600


3,693,900


3,659,700


3,622,700


3,602,300DTV (included in Television)


3,702,800


3,656,200


3,599,300


3,543,300


3,510,400ATV (included in Television)(1)


26,800


37,700


60,400


79,400


91,900Telephone


4,178,000


4,146,600


4,120,000


4,104,000


4,108,300Broadband


3,910,100


3,837,800


3,774,200


3,735,200


3,730,100Total cable products


11,817,700


11,678,300


11,553,900


11,461,900


11,440,700Cable products/Customer(1)


2.48
x

2.47
x

2.46
x

2.45
x

2.43
xTriple-play penetration(1)


61.9
%

61.1
%

60.1
%

58.9
%

57.6
%Cable Average Revenue Per User(1)(3)

£
45.01

£
45.28

£
44.71

£
43.72

£
42.74Cable ARPU calculation:Cable revenue (millions)

£
640.0

£
640.1

£
627.6

£
616.8

£
604.0Average customers(1)


4,739,500


4,712,600


4,679,000


4,702,300


4,711,600


---

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Selected statistics for our mobile customers for the three months ended March 31, 2010 as well as the four prior quarters are
set forth in the table below. Between March 31, 2010 and March 31, 2009, the number of mobile customers decreased by a net 208,500. Contract customer gains of 318,600 were offset by net
losses of 527,100 prepay customers. The growth in contract customers reflects our strategy of using our own sales channels and cross-selling mobile contracts to our cable customers. The decline in
prepay customers reflects increased competition in the prepay market and our strategy not to focus heavily on retaining market share in the prepay market due to higher churn, low tariffs and lower
overall lifetime value.

Three months endedMarch 31,
2010

December 31,
2009

September 30,
2009

June 30,
2009

March 31,
2009Contract mobile customers(1):Opening contract mobile customers


949,700


872,600


784,600


712,300


649,400Net contract mobile customer additions


81,200


77,100


88,000


72,300


62,900Closing contract mobile customers


1,030,900


949,700


872,600


784,600


712,300Prepay mobile customers(1):Opening prepay mobile customers


2,225,000


2,323,300


2,449,500


2,556,000


2,694,000Net prepay mobile customer additions (disconnections)


(196,100
)

(98,300
)

(126,200
)

(106,500
)

(138,000
)Closing prepay mobile customers


2,028,900


2,225,000


2,323,300


2,449,500


2,556,000Total closing mobile customers:(1)


3,059,800


3,174,700


3,195,900


3,234,100


3,268,300Mobile average revenue per user(2)

£
13.70

£
14.00

£
13.41

£
12.43

£
13.14Mobile ARPU calculation:Mobile service revenue (millions)

£
127.7

£
132.9

£
129.3

£
121.2

£
129.4Average mobile customers


3,106,300


3,164,400


3,213,600


3,251,400


3,283,000


---

Summary Non-cable Statistics

Selected statistics for our residential customers that are not connected directly through our cable network, or non-cable
customers, for the three months ended March 31, 2010 as well as for the four prior quarters are set forth in the table below. Total non-cable products increased by 11,700 during the
three months ended March 31, 2010 as compared to a decline of 1,500 non-cable products during the three months ended March 31, 2009. The increase in non-cable
products in the current quarter is primarily due to improvements in both broadband and telephone net additions due to the launch of wholesale line rental in August 2009 which allows us to offer a
telephone line rental service bundled

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with
our broadband services, which we believe makes our products more attractive to our customers, and new flexible consumer propositions.

Three months endedMarch 31,
2010

December 31,
2009

September 30,
2009

June 30,
2009

March 31,
2009Opening customers


267,200


255,200


245,500


247,100


251,900Net customer movements


3,400


12,000


9,700


(1,600
)

(4,800
)Closing customers


270,600


267,200


255,200


245,500


247,100Opening Non-cable products:Telephone


139,800


124,900


112,500


109,000


105,500Broadband


265,700


253,200


245,700


247,000


252,000405,500


378,100


358,200


356,000


357,500Net Non-cable product additions (disconnections):Telephone


7,800


14,900


12,400


3,500


3,500Broadband


3,900


12,500


7,500


(1,300
)

(5,000
)11,700


27,400


19,900


2,200


(1,500
)Closing Non-cable products:Telephone


147,600


139,800


124,900


112,500


109,000Broadband


269,600


265,700


253,200


245,700


247,000417,200


405,500


378,100


358,200


356,000


Business Segment



The summary combined results of operations of our Business segment for the three months ended March 31, 2010 and 2009 were as
follows (in millions):

Three months ended
March 31,Increase/
(Decrease)2010

2009Revenue

£
139.9

£
149.8


(6.6
)%Segment contribution


76.1


82.6


(7.9
)


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Table of Contents

Our Business segment revenue for the three months ended March 31, 2010 and 2009 was as follows (in millions):

Three months ended March 31,Increase/
(Decrease)2010

2009Revenue:Retail:Voice

£
41.5

£
46.6


(10.9
)%Data


55.0


51.3


7.2LAN Solutions and other


6.2


11.1


(44.1
)102.7


109.0


(5.8
)Wholesale


37.2


40.8


(8.8
)Total revenue

£
139.9

£
149.8


(6.6
)%


For the three months ended March 31, 2010, revenue from business customers decreased by 6.6% to £139.9 million from
£149.8 million for the three months ended March 31, 2009. This decrease was attributable to declines in retail voice, Local Area Network (LAN) solutions and wholesale
revenues, partially offset by growth in retail data revenue.

Retail
voice revenue decreased mainly as a result of declining telephony usage and pricing. Retail data revenue increased as a result of our strategy of focusing on higher margin data
revenue and increasing demand for our data products. Retail data revenue represented 53.6% of the retail business revenue for the three months ended March 31, 2010 compared with 47.1% for the
three months ended March 31, 2009.

LAN
solutions and other revenue in the three months ended March 31, 2010 was £6.2 million compared to £11.1 million in the three months ended
March 31, 2009. The majority of this revenue is from infrastructure projects which are non-recurring in nature. LAN solutions and other revenue decreased mainly as a result of a
reduction in revenue from public sector organizations and a decline in equipment sales compared with the three months ended March 31, 2009.

Wholesale
revenue decreased to £37.2 million for the three months ended March 31, 2010 from £40.8 million in the same period in 2009 mainly
as a result of the loss of certain wholesale contracts.



For the three months ended March 31, 2010, Business segment contribution decreased to £76.1 million from
£82.6 million for the three months ended March 31, 2009. The decrease in segment contribution was due primarily to the lower revenue as described above together with higher
marketing costs due to the rebranding to Virgin Media Business in the three months ended March 31, 2010.

Content Segment

The summary results of operations of our Content segment for the three months ended March 31, 2010 and 2009 were as follows (in
millions):

Three months ended
March 31,Increase/
(Decrease)2010

2009Revenue

£
33.8

£
32.6


3.7
%Inter segment revenue


7.1


6.6


7.6Segment contribution


6.6


6.9


(4.3
)


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For the three months ended March 31, 2010, Content segment revenue increased by 3.7% to £33.8 million from
£32.6 million for the three months ended March 31, 2009. This increase was due primarily to increased advertising revenue as Virgin Media TV increased its overall share of
the TV advertising market.



For the three months ended March 31, 2010, Content segment contribution decreased to £6.6 million from
£6.9 million for the three months ended March 31, 2009. The segment contribution decrease is mainly due to an increase in programming investment, partially offset by
increased revenue, as described above.

Television Channel Joint Ventures

We own 50% of the companies that comprise UKTV, a group of joint ventures formed with BBC Worldwide. UKTV produces a portfolio of
television channels based on the BBC's program library and other acquired programming and which are carried on Virgin Media's cable platform and also satellite. Some channels are also available on
Freeview.

We
account for our interest in UKTV under the equity method and recognized a share of net income of £6.5 million and £3.7 million for the three
months ended March 31, 2010 and 2009, respectively. At March 31, 2010, our investment in UKTV was carried on the balance sheet at £359.4 million, which includes an
outstanding loan totaling £125.7 million.

UKTV
receives financing through loans from Virgin Media, which totaled £125.7 million at March 31, 2010. These loans effectively act as a revolving facility for
UKTV. We received cash payments from UKTV in the form of loan capital repayments of £1.2 million during the three months ended March 31, 2010. We also received dividends,
interest payments and payments for consortium tax relief from UKTV totaling £8.5 million for the three months ended March 31, 2010.

Liquidity and Capital Resources

Overview

Our business is capital intensive and we are highly leveraged. We have significant cash requirements for operating costs, capital
expenditures and interest expense. We believe that we will be able to meet our current and medium-term liquidity and capital requirements, including fixed charges, through cash on hand,
cash from operations, available borrowings under our revolving credit facility, and our ability to obtain future external financing.

As
of March 31, 2010, we had £6,146.9 million of debt outstanding, compared to £5,974.7 million as of December 31, 2009 and
£6,180.0 million as of March 31, 2009, and £420.7 million of cash and cash equivalents, compared to £430.5 million as of
December 31, 2009 and £139.6 million as of March 31, 2009. The decrease in debt since March 31, 2009 is due to repayments offset by adverse movements in
exchange rates. The increase in debt from December 31, 2009 is primarily due to adverse movements in exchange rates.

On
January 19, 2010, we issued approximately £1.5 billion equivalent aggregate principal amount of senior secured notes in a private placement to qualified
institutional buyers pursuant to Rule 144A under the Securities Act, and outside the United States to certain non-U.S. persons pursuant to Regulation S under the Securities
Act. The notes were issued by our wholly owned subsidiary Virgin Media Secured Finance PLC in two tranches: $1.0 billion of 6.50% senior secured notes due 2018 and
£875 million of 7.00% senior secured notes due 2018, collectively referred to as the senior secured

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notes.
For more information see "Senior Secured Notes" below. The net proceeds from the issuance of the senior secured notes were used to repay £1,453.0 million of our
obligations under our senior facilities agreement dated March 3, 2006, as amended and restated, or the old senior credit facility.

On
April 19, 2010, we drew down an aggregate principal amount of £1,675.0 million under a new senior facilities agreement dated March 16, 2010, as
amended and restated, or the new senior credit facility, and applied the proceeds towards the repayment in full of all amounts outstanding under our old senior credit facility and for general
corporate purposes. The new senior credit facility comprises a term loan A facility in an aggregate principal amount of £1,000 million, a term loan B facility in an aggregate
principal amount of £675 million and a revolving credit facility in aggregate principal amount of £250 million. For more information see "Senior
Credit Facility" below.

We
have also notified the holders of our senior notes due 2014 of our intention to redeem the full outstanding principal amount of such senior notes on May 12, 2010, using cash
from our balance sheet. For more information see "Unsecured Senior Notes" below.

Our
long term debt was issued by Virgin Media Inc. and certain of its subsidiaries that have no independent operations or significant assets other than investments in their
respective subsidiaries and receivables under intercompany loans. As a result, they will depend upon the receipt of sufficient funds from their respective subsidiaries or payments under intercompany
loans to meet their obligations. In addition, the terms of our existing and future indebtedness and the laws of the jurisdictions under which our subsidiaries are organized limit the payment of
dividends, loan repayments and other distributions from them under many circumstances.

Our
debt agreements contain restrictions on our ability to transfer cash between groups of our subsidiaries. As a result of these restrictions, although our overall liquidity may be
sufficient to satisfy our obligations, we may be limited by covenants in some of our debt agreements from transferring cash to other subsidiaries that might require funds. In addition, cross default
provisions in our other indebtedness may be triggered if we default on any of these debt agreements.

Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2010 and 2009

For the three months ended March 31, 2010, cash provided by operating activities increased to £187.2 million
from £129.2 million for the three months ended March 31, 2009. This increase was attributable to the improvement in operating results. For the three months ended
March 31, 2010, cash paid for interest, exclusive of amounts capitalized, decreased to £109.0 million from £131.6 million during the same period in 2009.
This decrease was the result of differences in the timing of interest payments on our senior credit facility.

For
the three months ended March 31, 2010, cash used in investing activities was £179.3 million compared with cash used in investing activities of
£141.7 million for the three months ended March 31, 2009. The cash used in investing activities in the three months ended March 31, 2010 and 2009 mainly represented
purchases of fixed assets. Purchases of fixed and intangible assets increased to £181.5 million for the three months ended March 31, 2010 from
£144.4 million for the same period in 2009 primarily due to increased costs in relation to upgrading and extending our broadband and TV network architecture and timing of payments
to suppliers.

Cash
used in financing activities for the three months ended March 31, 2010 was £20.3 million compared to £21.4 million for the three months
ended
March 31, 2009. Cash used in financing activities for the three months ended March 31, 2010 was primarily from principal payments on long term debt offset by new debt issuances. Cash
used in financing activities for the three months ended March 31, 2009 was primarily used for principal payments on long term debt and capital lease and dividend payments.

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Senior Credit Facility

On April 19, 2010, we drew down an aggregate principal amount of £1,675.0 million under our new senior credit
facility, and applied the proceeds towards the repayment in full of all amounts outstanding under our old senior credit facility as at the draw down date. The new senior credit facility comprise a
term loan A, or Tranche A, facility in an aggregate principal amount of £1,000 million; a term loan B, or Tranche B, facility in an aggregate principal amount of
£675 million; and a revolving credit facility in aggregate principal amount of £250 million. The proceeds from Tranches A and B facilities may also be used
for general corporate purposes, while the proceeds from the revolving credit facility are available for the financing of our ongoing working capital requirements and general corporate purposes. Our
old senior credit facility, which was repaid in full on April 19, 2010, was comprised of amortizing term loan A facilities, bullet repayment term loan B and C facilities and multi-currency
revolving credit facilities.

Principal Amortization

As of March 31, 2010, the amortization schedule under our old senior credit facility was (in millions):

Date

AmountSeptember 30, 2010

£
March 3, 2011


June 3, 2012


September 3, 2012


1,340.0March 3, 2013


300.0Total

£
1,640.0


Following the repayments made on April 19, 2010, there were no outstanding amounts under our old senior credit facility.

The
final maturity date of Tranche A and the revolving credit facility under our new senior credit facility is June 30, 2015 and the final maturity date of Tranche B
is December 31, 2015. The principal repayment schedule for the term facilities under our new senior credit facility is (in millions):

Date

AmountTranche AJune 30, 2011

£
150.0June 30, 2012


175.0June 30, 2013


200.0June 30, 2014


200.0June 30, 2015


275.0Tranche BDecember 31, 2015


675.0Total

£
1,675.0


Mandatory Prepayments

Our new senior credit facility must be prepaid in certain circumstances by certain amounts, including:



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In
addition, the outstandings under our new senior credit facility must be repaid and all commitments will be cancelled upon the occurrence of a change of control.

Interest Margins

The annual rate of interest payable under our new senior credit facility is the sum of (i) the London Intrabank Offer Rate
(LIBOR), plus (ii) the applicable interest margin and (iii) the applicable cost of complying with any mandatory costs requirement.

The
applicable interest margin for Tranche A and the revolving credit facility under our new senior credit facility depends upon the total net leverage ratio of the bank group
(which comprises VMIH and most of its subsidiaries, and certain other operating companies which are subsidiaries of Virgin Media Inc. but not of VMIH) then in effect as set forth below:

Leverage Ratio

MarginGreater than 3.75:1.00


3.50
%Equal to or less than 3.75:1.00 but greater than 3.25:1.00


3.25
%Equal to or less than 3.25:1.00 but greater than 2.75:1.00


3.00
%Equal to or less than 2.75:1.00


2.75
%


The applicable interest margin for Tranche B is 3.75%.

Guarantees; Security

The security granted in respect of our new senior credit facility on the draw down date includes substantially all of the assets of the
bank group. Our new senior credit facility requires that members of the bank group which generate not less than 80% of the consolidated operating cash flow of the bank group (excluding the
consolidated net income attributable to any joint venture) in any financial year guarantee the payment of all sums payable under our new senior credit facility and such members are required to grant
first-ranking security over all or substantially all of their assets to secure the payment of all sums payable under our new senior credit facility. Virgin Media Finance PLC has also provided a
guarantee for the payment of all sums payable under our new senior credit facility and has secured its obligations under that guarantee by granting security over its interest in the intercompany debt
owed to it by its direct subsidiary VMIH and over all of the shares in VMIH.

Financial Maintenance Covenants

Our new senior credit facility contains the following financial covenant ratios:



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The
minimum required ratios are outlined below:

Quarter Date

Leverage
Ratio

Interest
Coverage
RatioJune 30, 2010


4.85:1.00


2.50:1.00September 30, 2010


4.80:1.00


2.55:1.00December 31, 2010


4.70:1.00


2.65:1.00March 31, 2011


4.60:1.00


2.75:1.00June 30, 2011


4.40:1.00


2.80:1.00September 30, 2011


4.35:1.00


2.85:1.00December 31, 2011


4.30:1.00


2.95:1.00March 31, 2012


4.25:1.00


3.00:1.00June 30, 2012


4.10:1.00


3.05:1.00September 30, 2012


4.10:1.00


3.10:1.00December 31, 2012


4.10:1.00


3.10:1.00March 31, 2013


4.05:1.00


3.15:1.00June 30, 2013


3.85:1.00


3.20:1.00September 30, 2013


3.80:1.00


3.25:1.00December 31, 2013


3.80:1.00


3.35:1.00March 31, 2014


3.75:1.00


3.45:1.00June 30, 2014


3.55:1.00


3.55:1.00September 30, 2014


3.55:1.00


3.70:1.00December 31, 2014


3.50:1.00


3.80:1.00March 31, 2015


3.50:1.00


3.95:1.00June 30, 2015


3.25:1.00


4.00:1.00September 30, 2015


3.25:1.00


4.00:1.00December 31, 2015


3.00:1.00


4.00:1.00


As shown in the table above, the required levels become more restrictive over time. As a result, we will need to continue to improve our operating
performance over the next several years to meet these levels. Failure to meet these covenant levels would result in a default under our new senior credit facility.

Restrictions

Our new senior credit facility significantly, and in some cases absolutely, restricts the ability of the members of the bank group to,
among other things:



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The
new senior credit facility also contains certain carve-outs from these limitations.

Events of Default

The occurrence of events of default specified in our new senior credit facility entitle the lenders, after the expiry of any grace
periods, as applicable, to cancel any undrawn portion of the facilities, require the immediate payment of all amounts outstanding under the facilities
and enforce or direct the security trustee to enforce the security interests that have been granted. These events of default include, among other things:



For
the full text of our new senior credit facility, see Virgin Media Inc.'s current report on Form 8-K, as filed with the SEC on April 12, 2010.

Unsecured Senior Notes

In November 2009, Virgin Media Finance issued U.S. dollar denominated 8.375% senior notes due 2019 with a principal amount outstanding
of $600 million and sterling denominated 8.875% senior notes due 2019 with a principal amount outstanding of £350 million, collectively, the senior notes due 2019. Interest
on the senior notes due 2019 is payable on April 15 and October 15 of each year. The senior notes due 2019 are unsecured senior obligations of Virgin Media Finance and rank pari passu
with Virgin Media Finance's outstanding senior notes due 2014 and 2016. The senior notes due 2019 mature on October 15, 2019 and are guaranteed on a senior basis by Virgin Media Inc.,
Virgin Media Group LLC, Virgin Media Holdings Inc., Virgin Media (UK) Group, Inc. and Virgin Media Communications Limited and on a senior subordinated basis by VMIH and VMIL.

In
June 2009, Virgin Media Finance issued U.S. dollar denominated 9.50% senior notes due 2016 with a principal amount outstanding of $750 million and euro denominated 9.50% senior
notes due 2016 with a principal amount outstanding of €180 million. In July 2009, Virgin Media Finance issued additional U.S. dollar denominated 9.50% senior notes due 2016 with
a principal amount outstanding of $600 million. The U.S. dollar denominated senior notes issued in June 2009 and July 2009, respectively, are treated as a single issuance of the same notes
under the indenture for these notes. We refer to all these notes, collectively, as the 9.50% senior notes due 2016. Interest on the 9.50% senior

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notes
due 2016 is payable on February 15 and August 15 of each year. The 9.50% senior notes due 2016 are unsecured senior obligations of Virgin Media Finance and rank pari passu with
Virgin Media Finance's outstanding senior notes due 2014 and 2019 and its 9.125% senior notes due 2016. The 9.50% senior notes due 2016 mature on August 15, 2016 and are guaranteed on a senior
basis by Virgin Media Inc., Virgin Media Group LLC, Virgin Media Holdings Inc., Virgin Media (UK) Group, Inc. and Virgin Media Communications Limited and on a senior
subordinated basis by VMIH and VMIL.

In
July 2006, Virgin Media Finance issued U.S. dollar denominated 9.125% senior notes due 2016 with a principal amount outstanding of $550 million. The 9.125% senior notes due
2016 are unsecured senior obligations of Virgin Media Finance and rank pari passu with Virgin Media Finance's outstanding 9.50% senior notes due 2016 and its senior notes due 2014 and 2019. Interest
on the 9.125% senior notes due 2016 is payable on February 15 and August 15 of each year. The 9.125% senior notes due 2016 mature on August 15, 2016 and are guaranteed on a senior
basis by Virgin Media Inc., Virgin
Media Group LLC, Virgin Media Holdings Inc., Virgin Media (UK) Group, Inc. and Virgin Media Communications Limited and on a senior subordinated basis by VMIH and VMIL.

In
April 2004, Virgin Media Finance issued U.S. dollar denominated 8.75% senior notes due 2014 with a principal amount outstanding of $425 million, sterling denominated 9.75%
senior notes due 2014 with a principal amount outstanding of £375 million, and euro denominated 8.75% senior notes due 2014 with a principal amount outstanding of
€225 million, collectively, the senior notes due 2014. Interest is payable on the senior notes due 2014 on April 15 and October 15 of each year. The senior notes
due 2014 mature on April 15, 2014 and are guaranteed on a senior basis by Virgin Media Inc., Virgin Media Group LLC, Virgin Media Holdings Inc., Virgin Media (UK)
Group, Inc. and Virgin Media Communications Limited and on a senior subordinated basis by VMIH and VMIL. In December 2009, we partially redeemed the senior notes due 2014 using the proceeds
from the offering of senior notes due 2019. Following this partial redemption, the U.S. dollar denominated senior notes due 2014 have a principal amount outstanding of $89.3 million, the
sterling denominated senior notes due 2014 have a principal amount outstanding of £78.8 million, and the euro denominated senior notes due 2014 have a principal amount outstanding
of €47.3 million, totaling an aggregate principal outstanding amount of £179.7 million (based on sterling equivalent amounts on March 31, 2010). On
April 12, 2010 we issued redemption notices to the holders of the 2014 notes, pursuant to which we undertook to redeem the remaining outstanding principal amount of the senior notes due 2014 on
May 12, 2010. The redemption price will be 102.917% of the principal amount of the U.S. dollar denominated and the euro denominated senior notes due 2014 and 103.250% of the principal amount of
the sterling denominated senior notes due 2014. The estimated cost of redemption of these notes, inclusive of the cost to unwind the derivative contracts entered as economic hedges of these notes, is
£193.9 million.

Senior Secured Notes

On January 19, 2010, our wholly owned subsidiary Virgin Media Secured Finance PLC issued U.S. dollar denominated 6.50%
senior secured notes due 2018 with a principal amount outstanding of $1.0 billion and sterling denominated 7.00% senior secured notes due 2018 with a principal amount outstanding of
£875 million, collectively, the senior secured notes due 2018. Interest is payable on the senior secured notes due 2018 on June 15 and December 15 each year, beginning
on June 15, 2010. The senior secured notes due 2018 rank pari passu with our new senior credit facility and, subject to certain exceptions, share in the same guarantees and security which has
been granted in favor of our new senior facilities. See "Senior Credit FacilityGuarantees; Security" above.

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Convertible Senior Notes

In April 2008, Virgin Media Inc. issued U.S. dollar denominated 6.50% convertible senior notes due 2016 with a principal amount
outstanding of $1.0 billion. The convertible senior notes are unsecured senior obligations of Virgin Media Inc. and, consequently, are subordinated to our obligations under our new
senior credit facility and rank equally with Virgin Media Inc.'s guarantees of the senior notes. The convertible senior notes bear interest at an annual rate of 6.50% payable
semi-annually on May 15 and November 15 of each year, beginning November 15, 2008. The convertible senior notes mature on November 15, 2016 and may not be
redeemed by us prior to their maturity date. Upon conversion, we may elect to settle in cash, shares of common stock or a combination of cash and shares of our common stock.

Our
2009 Annual Report contains a more detailed description of the terms of our convertible senior notes.

Debt Ratings

To access public debt capital markets, we rely on credit rating agencies to assign corporate credit ratings. A rating is not a
recommendation by the rating agency to buy, sell or hold our securities. A credit rating agency may change or withdraw our ratings based on its assessment of our current and future ability to meet
interest and principal repayment obligations. Lower credit ratings generally result in higher borrowing costs and reduced access to debt capital markets. The corporate debt ratings and outlook
assigned by the rating agencies engaged by us as of March 31, 2010 are as follows:

Corporate
Rating

OutlookMoody's Investors Service Inc.

Ba3

StableStandard & Poor's

B+

StableFitch

BB

Stable


Cash Dividends

During the year ended December 31, 2009 and the three months ended March 31, 2010, we paid the following dividends:

Board Declaration Date

Per Share

Record Date

Payment Date

Total
Amount(in millions)Year ended December 31, 2009:February 27, 2009

$
0.04


March 12, 2009


March 20, 2009

£
9.0May 29, 2009


0.04


June 12, 2009


June 22, 2009


8.0August 27, 2009


0.04


September 11, 2009


September 21, 2009


8.1November 24, 2009


0.04


December 11, 2009


December 21, 2009


8.2Three months ended March 31, 2010:March 2, 2010

$
0.04


March 12, 2010


March 22, 2010


£8.8


Future payments of regular quarterly dividends by us are at the discretion of the Board of Directors and will be subject to our future needs and
uses of cash, which could include investments in operations, the repayment of debt, and share repurchase programs. In addition, the terms of our and our subsidiaries' existing and future indebtedness
and the laws of jurisdictions under which those subsidiaries are organized limit the payment of dividends, loan repayments and other distributions to us under many circumstances.

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Off-Balance Sheet Arrangements

As of March 31, 2010 and 2009, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of
Regulation S-K under the Securities Exchange Act of 1934, as amended.

Contractual Obligations and Commercial Commitments

The following table includes aggregate information about our contractual obligations as of March 31, 2010, and the periods in
which payments are due (in millions):

Payments Due by PeriodContractual Obligations

Total

Less than
1 year

1 - 3
years

3 - 5
years

More than
5 yearsLong Term Debt Obligations

£
6,165.6

£
0.4

£
1,640.3

£
179.8

£
4,345.1Capital Lease Obligations


259.5


51.4


100.8


15.0


92.3Operating Lease Obligations


338.7


70.4


108.9


72.9


86.5Purchase Obligations


804.1


491.9


204.2


53.5


54.5Interest Obligations


2,930.7


463.3


880.9


726.8


859.7Total

£
10,498.6

£
1,077.4

£
2,935.1

£
1,048.0

£
5,438.1Early Termination Charges




£
21.3

£
5.6

£
0.1

£



Early termination charges are amounts that would be payable in the above periods in the event of early termination during that period of certain
of the contracts underlying the purchase obligations listed above.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including changes in foreign currency exchange rates and interest rates. Market risk is the
potential loss arising from adverse changes in market rates and prices, like foreign currency exchange and interest rates. As some of our indebtedness accrues interest at variable rates, we have
exposure to volatility in future cash flows and earnings associated with variable interest rate payments.

Also,
substantially all of our revenues, operating costs and selling, general and administrative expenses are earned and paid in pounds sterling but we pay interest and principal
obligations on some of our indebtedness in U.S. dollars and euros. As of March 31, 2010, £3,200.3 million, or 50.6%, of our indebtedness based upon contractual obligations,
was denominated in U.S. dollars and
£469.5 million, or 7.4%, of our indebtedness based upon contractual obligations, was denominated in euros. As a result, we have exposure to volatility in future cash flows and
earnings associated with changes in foreign exchange rates on payments of principal and interest on a portion of our indebtedness. We also have committed and forecasted purchases of goods and services
in U.S. dollars, euros and South African rand.

To
mitigate the risk from these exposures, we have implemented a cash flow hedging program. The objective of this program is to reduce, but not eliminate, the volatility of our cash
flows and earnings caused by changes in underlying rates. To achieve this objective we have entered into a number of derivative instruments. The derivative instruments utilized comprise interest rate
swaps, cross-currency interest rate swaps and foreign currency forward contracts. We do not enter into derivative instruments for trading or speculative purposes. See note 5 to the consolidated
financial statements of Virgin Media Inc.

The
fair market value of long term fixed interest rate debt and the amount of future interest payments on variable interest rate debt are subject to interest rate risk.

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Table of Contents

The
following table provides information as of March 31, 2010 about our long term fixed and variable interest rate debt that are sensitive to changes in interest rates and foreign
currency exchange rates (in millions):

Year ended December 31,Fair Value
March 31,
20102010

2011

2012

2013

2014

Thereafter

TotalLong term debt (including current portion)U.S. DollarsFixed rate













$
89.3

$
4,500.0

$
4,589.3

$
5,029.2Variable rate







$
275.9










$
275.9

$
275.2Average interest rate








LIBOR





8.750
%

7.971
%plus
3.5
%Average forward exchange rate








0.66





0.66


0.65EurosFixed rate













€
47.3

€
180.0

€
227.3

€
249.4Variable rate







€
299.8










€
299.8

€
299.1Average interest rate








LIBOR





8.750
%

9.5
%plus
3.5
%Average forward exchange rate








0.90





0.92


0.93Pounds SterlingFixed rate













£
78.8

£
1,225.0

£
1,303.8

£
1,335.9Variable Rate








£1,190.8











£1,190.8


£1,187.8Average interest rate








LIBOR





9.750
%

7.536
%plus
1.25 - 3.625
%Currency swap agreements related to long term debtReceipt of U.S. Dollars (interest and principal)Notional amount







$
89.3

$
275.9




$
3,500.0

$
3,865.2

£
144.0Average forward exchange rate








0.70


0.54





0.60Average sterling interest rate paid








9.42
%

LIBOR





8.74
%plus
2.13
%Receipt of U.S. Dollars (interest only)Notional amount
















$
1,000.0

$
1,000.0

£
44.0Average contract exchange rate

















0.51Average sterling interest rate paid

















6.95
%Receipt of Euros (interest and principal)Notional amount







€
47.3

€
299.8




€
180.0

€
527.1

£
58.7Average contract exchange rate








0.93


0.69





0.88Average sterling interest rate paid








8.90
%

LIBOR





10.18plus
2.16
%Interest rate derivative financial instruments related to long term debtSterling Interest Rate SwapsNotional amount




£
3,000.0

£
200.0

£
1,300.0







£
4,500.0

£
(56.9
)Average sterling interest rate paid





2.18
%

2.58
%

3.07
%Sterling interest rate received





LIBOR


LIBOR


LIBOR


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Table of Contents

ITEM 4.   CONTROLS AND PROCEDURES

(a)   Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act) as of
the end of the period covered by this report. Based on this evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of such period, these controls and
procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Securities and Exchange
Commission's rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the
reports that we file or submit is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding
required disclosure.

(b)   Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) during the first fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Table of Contents

PART IIOTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

We are involved in various disputes and litigation arising in the ordinary course of our business. While we do not believe any of these
litigation matters alone or in the aggregate will have a material adverse effect on our financial position or results of operation, any adverse outcome in one or more of these matters could be
material to our consolidated financial statements for any one period.

ITEM 1A.    RISK FACTORS

There have been no material changes in the risk factors discussed under "Risk Factors" and elsewhere in our 2009 Annual Report.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Period

(a)
Total Number of
Shares (or Units)
Purchased(1)

(b)
Average Price
Paid per Share
(or Unit)(2)

(c)
Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs

(d)
Maximum Number
(or Approximate
Dollar Value) of
Shares (or Units)
That May Yet Be
Purchased Under the
Plans or ProgramsMarch 1-31, 2010


120,655

$
17.05



Total


120,655


17.05






(1)Our
net issuance policy permits the net issuance of restricted stock to, and the net issuance exercise of our stock options by, a director or employee in
specified circumstances. In a net issuance transaction, we withhold sufficient shares to satisfy the withholding taxes triggered upon the vesting of restricted stock or to satisfy the payment of the
exercise price for options. This type of transaction is treated for accounting purposes effectively as the purchase of stock by the Company and an immediate cancellation of treasury stock.(2)Based
on the mid-market share price of our common stock on the date of the net issuance transactions.


ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    (REMOVED AND RESERVED).

ITEM 5.    OTHER INFORMATION

None.

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Table of Contents

ITEM 6.    EXHIBITS

Exhibit No.

Description3.1

Second Restated Articles of Incorporation of Virgin Media Inc. (Incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the Securities and Exchange
Commission on March 1, 2007).3.2

Restated by-laws of Virgin Media Inc. (Incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on
March 1, 2007).3.3

Memorandum and Articles of Association of Virgin Media Investment Holdings Limited (Incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the
Securities and Exchange Commission on February 26, 2010).4.1

Indenture, dated as of January 19, 2010, among Virgin Media Secured Finance PLC, the guarantors party thereto, The Bank of New York Mellon as trustee and paying agent and The Bank of New York Mellon
(Luxembourg) S.A. as Luxembourg paying agent (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on January 20,
2010).4.2

Registration Rights Agreement, dated as of January 19, 2010, among Virgin Media Secured Finance PLC, Virgin Media Inc., Virgin Media Finance PLC, Virgin Media Investment Holdings Limited and the
initial purchasers party thereto (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on January 20, 2010).4.3*

Group Intercreditor Deed, dated March 3, 2006, as amended and restated on January 8, 2010, between, among others, Deutsche Bank AG, London Branch as Facility Agent and Security Trustee and the Seniors
Lenders, the Intergroup Debtors and the Intergroup Creditors named therein.10.1

Senior Facilities Agreement, dated 16 March 2010, as amended and restated on 26 March 2010, among Virgin Media Inc. as Ultimate Parent, Virgin Media Finance PLC as Parent, Virgin Media Investment
Holdings Limited, Virgin Media Limited, Virgin Media Wholesale Limited, VMIH Sub Limited and Virgin Media SFA Finance Limited as Original Borrowers, BNP Paribas London Branch, Deutsche Bank AG, London Branch, Crédit Agricole Corporate and
Investment Bank, GE Corporate Finance Bank SAS, Goldman Sachs International, J.P. Morgan PLC, Lloyds TSB Corporate Markets, Merrill Lynch International, The Royal Bank of Scotland plc and UBS Limited as Bookrunners and Mandated Lead
Arrangers, Deutsche Bank AG, London Branch as Facility Agent, Deutsche Bank AG, London Branch as Security Trustee and the financial and other institutions named in it as Lenders (Incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on April 12, 2010).10.2

B Facility Accession Deed, dated April 12, 2010, among Deutsche Bank AG, London Branch as Facility Agent, Deutsche Bank AG, London Branch as B Facility Lender and Virgin Media Investment Holdings Limited
(Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on April 12, 2010).


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Table of Contents

Exhibit No.

Description10.3

Schedule to the Virgin Media Inc. 2006 Stock Incentive Plan relating to the Company Share Option Plan (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Virgin Media Inc.
as filed with the Securities and Exchange Commission on January 13, 2010).10.4

Description of the 2010-2012 Virgin Media Inc. Long Term Incentive Plan (Incorporated by reference to Exhibit 10.23 to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the
Securities and Exchange Commission on February 26, 2010).10.5

Form of Restricted Stock Unit Agreement used for grants by Virgin Media Inc. to its executive officers pursuant to the 2010-2012 Long Term Incentive Plan (Incorporated by reference to Exhibit 10.2 to the
Current Report on Form 8-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on January 13, 2010).10.6

Form of Non-qualified Stock Option Notice used for grants by Virgin Media Inc. to its executive officers pursuant to the 2010-2012 Long Term Incentive Plan (Incorporated by reference to Exhibit 10.3 to the
Current Report on Form 8-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on January 13, 2010).10.7

Form of Incentive Stock Option Notice used for grants by Virgin Media Inc. to its executive officers pursuant to the 2010-2012 Long Term Incentive Plan (Incorporated by reference to Exhibit 10.4 to the
Current Report on Form 8-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on January 13, 2010).10.8

Form of Company Share Option Plan Option Certificate used for grants by Virgin Media Inc. to its executive officers pursuant to the 2010-2012 Long Term Incentive Plan (Incorporated by reference to
Exhibit 10.5 to the Current Report on Form 8-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on January 13, 2010).10.9

Description of the Virgin Media Inc. 2010 Bonus Scheme (Incorporated by reference to Exhibit 10.30 to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the Securities and Exchange
Commission on February 26, 2010).10.10

Amendment Letter, dated as of December 16, 2009, relating to the Service Agreement, dated as of July 10, 2009, between Virgin Media Limited and Andrew Barron (Incorporated by reference to Exhibit 10.48
to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on February 26, 2010).10.11

Amendment Letter, dated as of February 4, 2010, relating to the Employment Agreement, dated as of September 18, 2007, between Virgin Media Inc. and Mark Schweitzer (Incorporated by reference to
Exhibit 10.54 to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on February 26, 2010).10.12

Form of Supplemental Incentive Stock Option Notice for Mark Schweitzer (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Virgin Media Inc. as filed with the Securities and
Exchange Commission on February 1, 2010).10.13

Form of the Supplemental Incentive Stock Option Notice for Mark Schweitzer with respect to time based options (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Virgin
Media Inc. as filed with the Securities and Exchange Commission on March 3, 2010).


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Table of Contents

Exhibit No.

Description10.14

Form of the Supplemental Incentive Stock Option Notice for Mark Schweitzer with respect to performance based options (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Virgin
Media Inc. as filed with the Securities and Exchange Commission on March 3, 2010).10.15

Amendment Letter, dated as of December 15, 2009, relating to the Service Agreement, dated as of July 31, 2009, between Virgin Media Limited and Paul Buttery (Incorporated by reference to Exhibit 10.57
to the Annual Report on Form 10-K of Virgin Media Inc. as filed with the Securities and Exchange Commission on February 26, 2010).31.1*

Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.31.2*

Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.32.1*

Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*Filed
herewith.


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their
behalf by the undersigned thereunto duly authorized.

VIRGIN MEDIA INC.Date: May 6, 2010

By:

/s/ NEIL A. BERKETT Neil A. Berkett Chief Executive OfficerDate: May 6, 2010

By:

/s/ EAMONN O'HARE Eamonn O'Hare Chief Financial OfficerVIRGIN MEDIA INVESTMENT HOLDINGS LIMITEDDate: May 6, 2010

By:

/s/ NEIL A. BERKETT Neil A. Berkett Chief Executive OfficerDate: May 6, 2010

By:

/s/ EAMONN O'HARE Eamonn O'Hare Chief Financial Officer


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