Income Taxes

6 Months Ended

Jun. 30, 2013

Income tax expense attributable to our earnings before income taxes during the Successor period from June 8 to June 30, 2013, the Predecessor period from April 1 to June 7, 2013 and the Predecessor period for the three months ended June 30, 2012 differs from the amounts computed by applying the U.S. federal income tax rate of 35%, as a result of the following (in millions):



	Successor			Predecessor
	Period from June 8 to June 30, 2013			Period from April 1 to June 7, 2013			Three months ended June 30, 2012
Computed expected tax benefit (expense)	£	(22.7	)	£	15.3		£	(22.8	)
Change in valuation allowances	(3.4		)	(7.8		)	22.5
Non-deductible or non-taxable interest and other expenses	12.0			(12.6		)	—
International rate differences^(a)	7.8			10.1			—
Other, net	(0.2		)	(0.4		)	—
Total	£	(6.5	)	£	4.6		£	(0.3	)

^(a) Amounts reflect statutory rates in the U.K. which are lower than the U.S. federal income tax rate.

At June 30, 2013, we had no significant changes to the unrecognized tax benefits disclosed in the Predecessor 's 2012 Annual Report.

During the fourth quarter of the Predecessor's year ended December 31, 2012, £2.5 billion of the valuation allowance on certain of the U.K. deferred tax assets and £0.1 billion of the valuation allowance on the U.S. deferred tax assets in dual resident companies were reversed. The basis of these reversals is explained in note 11 to the audited consolidated financial statements included in the Predecessor's 2012 Annual Report.

The deferred tax assets and liabilities presented as of June 30, 2013 reflect the current U.K. corporate income tax rate of 23%. During the three months ended March 31, 2013, it was announced that the U.K. corporate income tax rate will fall to 21% from April 2014 and 20% from April 2015. This change was enacted in July 2013; therefore, the impact will be reflected in the financial statements for the three months ended September 30, 2013.

VMIH

Income Tax Disclosure [Line Items]

Income taxes



	Successor			Predecessor
	Period from June 8 to June 30, 2013			Period from April 1 to June 7, 2013			Three months ended June 30, 2012
Computed expected tax expense	£	(15.4	)	£	(14.5	)	£	(40.5	)
Change in valuation allowances	—			17.3			40.2
Non-deductible or non-taxable interest and other expenses	1.6			(7.6		)	—
International rate differences^(a)	7.6			9.9			—
Other, net	(0.2		)	(0.4		)	—
Total	£	(6.4	)	£	4.7		£	(0.3	)

^(a) Amounts reflect statutory rates in the U.K., which are lower than the U.S. federal income tax rate.

At June 30, 2013, we had no significant changes to the unrecognized tax benefits disclosed in the Predecessor's 2012 Annual Report.

During the fourth quarter of the Predecessor's year ended December 31, 2012, £2.4 billion of the valuation allowance on certain of the U.K. deferred tax assets and £0.1 billion of the valuation allowance on the U.S. deferred tax assets in dual resident companies were reversed. The basis of these reversals is explained in note 11 to the audited consolidated financial statements included in the Predecessor's 2012 Annual Report.

The deferred tax assets and liabilities presented as of June 30, 2013, reflect the current U.K. corporate income tax rate of 23%. During the three months ended March 31, 2013, it was announced that the U.K. corporate income tax rate will fall to 21% from April 2014 and 20% from April 2015. This change was enacted in July 2013; therefore, the impact will be reflected in the financial statements for the three months ended September 30, 2013.

VMIL

Income Tax Disclosure [Line Items]

Income taxes



	Successor			Predecessor
	Period from June 8 to June 30, 2013			Period from April 1 to June 7, 2013			Three months ended June 30, 2012
Computed expected tax expense	£	(15.4	)	£	(14.5	)	£	(40.5	)
Change in valuation allowances	—			17.3			40.2
Non-deductible or non-taxable interest and other expenses	1.6			(7.6		)	—
International rate differences^(a)	7.6			9.9			—
Other, net	(0.2		)	(0.4		)	—
Total	£	(6.4	)	£	4.7		£	(0.3	)

^(a) Amounts reflect statutory rates in the U.K., which are lower than the U.S. federal income tax rate.

At June 30, 2013, we had no significant changes to the unrecognized tax benefits disclosed in the Predecessor's 2012 Annual Report.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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Reference 7: http://www.xbrl.org/2003/role/presentationRef

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Reference 8: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

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