Virgin Media 2006 Annual Report Download - page 62

The reportable segments disclosed in this Form 10−K are based on our management organizational structure as of December 31,
2006. Future changes to this organizational structure may result in changes to the reportable segments disclosed.
Segment operating income before depreciation, amortization and other charges, which we refer to as Segment OCF, is
management’s measure of segment profit as permitted under SFAS 131, “Disclosures about Segments of an Enterprise and Related
Information”. Our management, including our chief executive officer who is our chief operating decision maker, considers Segment
OCF as an important indicator of the operational strength and performance of our segments. Segment OCF excludes the impact of
costs and expenses that do not directly affect our cash flows. Other charges, including restructuring charges, are also excluded from
Segment OCF as management believes they are not characteristic of our underlying business operations.
Cable Segment
The summary pro forma combined results of operations of our Cable segment were as follows (in millions):
Year ended
December 31,
2006 2005
Revenue £ 3,225.4 £ 3,205.2
Inter segment revenue 3.0 2.6
Segment OCF 1,145.2 1,191.7
Depreciation, amortization and other charges (1,134.9) (1,139.6)
Operating (loss) income £ 10.3 £ 52.1
Revenue
Our pro forma Cable segment revenue by customer type for the years ended December 31, 2006 and 2005 was as follows (in
millions):
Year ended December 31,
2006 2005 Increase/ (Decrease)
Revenue:
Consumer £ 2,568.6 £ 2,527.4 1.6%
Business 656.8 677.8 (3.1)%
Total revenue £ 3,225.4 £ 3,205.2 0.6%
Consumer: For year ended December 31, 2006, pro forma revenue from residential customers increased by 1.6% to £2,568.6
million from £2,527.4 million for the year ended December 31, 2005. This increase is driven largely by growth in the number of
broadband internet subscribers together with television and telephony price rises partially offset by lower telephony usage. Cable
ARPU has increased steadily through the year, reflecting our drive to encourage “triple−play” bundling and a focus on better quality
customers. Our focus on acquiring new bundled customers and on cross−selling to existing customers is shown by Revenue
Generating Units (RGUs) per customer increasing from 2.06 on a pro forma basis at December 31, 2005 to 2.17 at December 31, 2006
and by “triple−play” penetration growing from 32.4% on a pro forma basis at December 31, 2005 to 40.6% at December 31, 2006.
Business: For the year ended December 31, 2006, pro forma revenue from business customers decreased by 3.1% to £656.8
million from £677.8 million for the year ended December 31, 2005. This
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Source: VIRGIN MEDIA INVESTM, 10−K, March 01, 2007