Virgin Media 2006 Annual Report Download - page 67

negotiated contracts, and reduced levels of set−top box repair and recycling costs were partly offset by higher spend on marketing and
communications together with increased allowances for doubtful accounts.
Other charges
Other charges of £24.8 million in the year ended December 31, 2005 mainly related to changes in cash flow estimates with
respect to lease exit costs in connection with properties that have been vacated. Other charges of £23.8 million in the year ended
December 31, 2004 related to restructuring charges incurred in connection with our call center consolidation program. Of the costs of
£23.8 million incurred in connection with our call center consolidation program, £12.4 million related to involuntary employee
termination and related costs, £2.4 million related to lease exit costs, and £9.0 million related to other costs of the consolidation
program, including recruitment and training of new employees at the new sites.
The following table summaries the restructuring charges incurred and utilized in the year ended December 31, 2005 and 2004 (in
millions):
Involuntary
Employee
Termination
and Related
Costs
Lease
Exit
Costs Agreement Modifications Other Total
Balance, December 31, 2003 £ — £ 38.8 £ 0.3 £ — £ 39.1
Released — — — — —
Charged to expense 12.4 2.4 — 9.0 23.8
Utilized (10.7) (12.8) (0.1) (9.0) (32.6)
Balance, December 31, 2004 1.7 28.4 0.2 — 30.3
Released — — (0.2) (0.4) (0.6)
Charged to expense 0.8 24.2 — 0.4 25.4
Utilized (2.5) (7.3) — — (9.8)
Balance, December 31, 2005 £ — £ 45.3 £ — £ — £ 45.3
Depreciation expense
For the year ended December 31, 2005, depreciation expense decreased to £541.7 million from £594.9 million for the same
period in 2004. This reduction in depreciation expense is because of the absence of depreciation on some assets that became fully
depreciated in 2004.
Amortization expense
For the year ended December 31, 2005, amortization expense increased to £109.5 million from £104.2 million for the same
period in 2004. The increase in amortization expense relates to additional intangible assets arising from the acquisition of Virgin Net
Limited during the fourth quarter of 2004.
Interest expense
For the year ended December 31, 2005, interest expense decreased to £235.8 million from £271.0 million for the same period in
2004, primarily as a result of the interest saving offset by the accelerated amortization of deferred financing costs following the
repayments totaling £723 million of our senior credit facility on February 4, 2005, June 14, 2005 and July 14, 2005, the redemption of
the $100 million floating rate senior notes on July 15, 2005 and the effects of the refinancing transaction in April 2004 that lowered
our weighted average interest rate.
We paid interest in cash of £216.8 million for the year ended December 31, 2005, and £298.5 million for the year ended
December 31, 2004. The decrease in cash interest payments resulted from debt
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Source: VIRGIN MEDIA INVESTM, 10−K, March 01, 2007