Virgin Media 2007 Annual Report Download - page 107

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Acquisitions (Continued)
The total purchase price was allocated as follows (in millions):
Acquisition
Date
Cash and cash equivalents, including restricted cash ............................. £ 303.2
Accounts receivable ..................................................... 155.6
Prepaid expenses and other current assets ..................................... 36.5
Fixed assets .......................................................... 2,932.9
Inventory ............................................................ 34.8
Investments in and loans to affiliates ........................................ 377.9
Amortizable intangible assets:
Customer lists ....................................................... 761.6
Trade names ........................................................ 10.7
Licenses ........................................................... 37.0
Intangible assets with indefinite lives:
Goodwill ........................................................... 1,370.1
Trade names ........................................................ 16.5
Accounts payable ...................................................... (144.7)
Long term debt, including current portion .................................... (1,873.7)
Other current liabilities .................................................. (453.9)
Other long term liabilities ................................................ (38.5)
Deferred income taxes ................................................... (77.0)
Total purchase price .................................................... £ 3,449.0
Amortizable intangible assets
Of the total purchase price, £809.3 million was allocated to amortizable intangible assets including
customer lists, trade names and licenses. Customer lists represented existing contracts that related
primarily to underlying customer relationships pertaining to the services provided by Telewest. The fair
value of these assets was determined utilizing the income approach. We amortize the fair value of these
assets on a straight-line basis over estimated useful lives of between three and six years.
Trade names represented the Telewest and BlueYonder brand names. The fair value of these assets
was determined utilizing a relief-from-royalty method. We amortize the fair value of these assets on a
straight-line basis over estimated useful lives of between one and nine years.
Licenses represented contracts to broadcast television content over a digital broadcasting system in
the U.K.. The fair value of these contracts was determined utilizing the income approach. We amortize
the fair value of these assets on a straight-line basis over an average estimated useful life of four years.
Indefinite life intangible assets
Trade names with indefinite lives represented the Living, Bravo, Trouble and Challenge television
channel names. We determined that these assets have indefinite lives as the trade names do not expire
and management expect the related cash flows to continue indefinitely. Therefore, these assets are not
being amortized until their useful life is deemed to no longer be indefinite.
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