Virgin Media 2008 Annual Report Download - page 207

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 16—Industry Segments (Continued)
our cable network. We operate a Content segment through our wholly owned subsidiaries Virgin Media
Television Limited, or Virgin Media TV, and sit-up Limited, or sit-up, which supply television
programming to the U.K. pay television broadcasting market including our televised shopping unit
sit-up tv, which markets and retails a wide variety of consumer products using an auction-based format.
We operate our Mobile segment through our wholly owned subsidiary, Virgin Mobile Holdings (UK)
Limited, which consists of our mobile telephony business. Our segments operate entirely in the U.K.
and no single customer represents more than 5% of our overall revenue.
Segment operating income before depreciation, amortization, restructuring and other charges and
goodwill and intangible asset impairments, which we refer to as Segment OCF, is management’s
measure of segment profit as permitted under FAS 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. Restructuring and other charges, which is excluded from Segment OCF,
are included in the Cable segment below.
Segment OCF excludes the impact of certain costs and expenses that do not directly affect our
cash flows. Restructuring and other charges are also excluded from Segment OCF as management
believes they are not characteristic of our underlying business operations. The business segments
disclosed in the consolidated financial statements are based on this organizational structure and
information reviewed by our management to evaluate the business segment results.
Segment information for the years ended December 31, 2008, 2007 and 2006 was as follows (in
millions):
Year ended December 31, 2008
Cable Content Mobile Elims. Total
Revenue ............................... £2,971.5 £ 363.6 £ 570.0 £ — £ 3,905.1
Inter segment revenue ..................... 3.2 25.7 — (28.9) —
Operating costs .......................... (1,145.1) (310.2) (351.0) 25.7 (1,780.6)
Selling, general and administrative expenses ..... (646.0) (81.4) (113.3) 3.2 (837.5)
Segment OCF ......................... 1,183.6 (2.3) 105.7 — 1,287.0
Depreciation, amortization and restructuring and
other charges .......................... (1,080.1) (18.9) (102.2) — (1,201.2)
Goodwill and intangible asset impairments ...... — (54.8) (362.2) — (417.0)
Operating income (loss) .................... £ 103.5 £ (76.0) £ (358.7) £ — £ (331.2)
Identifiable assets ........................ £9,237.7 £ 527.3 £ 775.4 £ — £10,540.4
Goodwill (included in identifiable assets) ....... £1,277.8 £ 42.8 £ 601.6 £ — £ 1,922.2
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