Virgin Media 2007 Annual Report Download - page 50

Content
• television production programming costs;
• amortization of television and movie program costs;
• costs of purchasing consumer goods for re-sale;
• leased satellite transponder costs;
• payroll and other employee-related costs;
• marketing and selling costs;
• repairs and maintenance costs;
• facility-related costs, such as rent, utilities and rates; and
• allowances for doubtful accounts.
Acquisitions and Disposals
Acquisition of Virgin Mobile
On July 4, 2006, we acquired 100% of the outstanding shares and options of Virgin Mobile
through a U.K. Scheme of Arrangement for a purchase price totaling £953.2 million, including cash of
£419.2 million, common stock valued at £518.8 million and direct transaction costs of £15.2 million.
Reverse Acquisition of Telewest
On March 3, 2006, NTL merged with a subsidiary of Telewest and the merger has been accounted
for as a reverse acquisition of Telewest using the purchase method. In connection with this transaction,
Telewest changed its name to NTL Incorporated, and has since changed its name to Virgin Media Inc.
The total purchase price was £3.5 billion, including cash of £2.3 billion, common stock valued at
£1.1 billion, stock options with a fair value of £29.8 million and direct transaction costs of £25.1 million.
Sale of Broadcast and Ireland Operations
On January 31, 2005, we sold our Broadcast operations, a provider of commercial television and
radio transmission services, to a consortium led by Macquarie Communications Infrastructure Group.
The cash proceeds from the sale were £1.3 billion. Our Broadcast operations provided site leasing,
broadcast transmission, satellite, media, public safety communications and other network services,
utilizing broadcast transmission infrastructure, wireless communications and other facilities.
On May 9, 2005, we sold our telecommunications operations in the Republic of Ireland to
MS Irish Cable Holdings B.V., an affiliate of Morgan Stanley, for an aggregate purchase price of
A333.4 million, or £225.5 million.
As a result of the sale of our Broadcast and Ireland operations, we have accounted for the
Broadcast and Ireland operations as discontinued operations. The results of operations for the
Broadcast and Ireland operations have been excluded from the components of loss from continuing
operations and shown in a separate caption, titled income from discontinued operations.
Factors Affecting Our Business
Cable Segment
In our Cable segment, residential customers account for the majority of our total revenue. The
number of residential customers, the number and types of services that each customer uses and the
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