Virgin Media 2007 Annual Report Download - page 65

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Content Segment
The summary combined results of operations of our Content segment were as follows (in millions):
Year ended
December 31,
2007 2006
(Actual) (Pro Forma)
Revenue ..................................................... £348.1 £362.1
Inter segment revenue ........................................... 24.4 22.7
Segment OCF ................................................. 12.5 25.7
Depreciation, amortization and other charges ........................... (19.4) (18.5)
Operating (loss) income .......................................... £ (6.9) £ 7.2
Revenue
Our Content segment revenue for the years ended December 31, 2007 and 2006 was as follows
(in millions):
Year ended December 31,
2007 2006 Increase/
(Actual) (Pro Forma) (Decrease)
Revenue:
Virgin Media TV ..................................... £109.5 £135.6 (19.2)%
Sit-up .............................................. 238.6 226.5 5.3%
Total revenue .......................................... £348.1 £362.1 (3.9)%
For the year ended December 31, 2007, Content segment revenue decreased by 3.9% to
£348.1 million from £362.1 million on a pro forma basis for the year ended December 31, 2006. This
decrease is driven largely by reduced subscription revenue in Virgin Media TV mainly as a result of a
new satellite television carriage contract entered into at the end of 2006 which has lower pricing,
partially offset by increased advertising revenues together with increased retail revenue from our sit-up
channels.
Content segment OCF
For the year ended December 31, 2007, Content segment OCF decreased by 51.4% to
£12.5 million from £25.7 million on a pro forma basis for the year ended December 31, 2006. The
decrease in Content segment OCF is mainly due to the reduction in subscription revenue referred to
above and increased programming costs, partially offset by the settlement of certain long standing
contractual issues totaling £13.0 million.
Television Channel Joint Ventures
We own 50% of the companies that comprise UKTV, a group of joint ventures formed with BBC
Worldwide. UKTV produces a portfolio of television channels based on the BBC’s program library and
other acquired programming and which are carried on Virgin Media’s cable platform and also satellite.
Some channels are also available on Freeview. UKTV is the second largest pay television operator in
the U.K. by viewing share.
We account for our interest in UKTV under the equity method and recognized a share of net
income of £18.7 million and £12.3 million for the years ended December 31, 2007 and 2006,
respectively. At December 31, 2007 our investment in UKTV is carried on the balance sheet at
£367.7 million, which includes an outstanding loan totaling £145.6 million.
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