Virgin Media 2009 Annual Report Download - page 55

Selling, General and Administrative Expenses
Selling, general and administrative expenses for the year ended December 31, 2009 and 2008 were
as follows (in millions):
Year ended
December 31, Increase/
2009 2008 (Decrease)
Selling, general and administrative expenses:
Employee and outsourcing costs ................... £457.7 £460.9 (0.7)%
Marketing costs ............................... 132.8 126.8 4.7
Facilities .................................... 75.7 72.0 5.1
Other ...................................... 141.8 168.3 (15.7)
Total selling, general and administrative expenses ......... £808.0 £828.0 (2.4)%
For the year ended December 31, 2009, selling, general and administrative expenses decreased to
£808.0 million from £828.0 million for the same period in 2008. This decrease was primarily attributable
to lower IT costs, bad debt expense and employee and outsourcing costs, partially offset by higher
marketing and facilities costs.
Restructuring and Other Charges
For the year ended December 31, 2009, restructuring and other charges increased to £40.4 million
from £22.7 million for the same period in 2008. Restructuring and other charges in the year ended
December 31, 2009 related primarily to involuntary employee termination costs and lease exit costs in
connection with the restructuring program initiated in 2008. Restructuring and other charges in the year
ended December 31, 2008 related primarily to contract and lease exit costs in connection with the
restructuring program initiated in the last quarter of 2008 as discussed below.
During the fourth quarter of 2008, we commenced the implementation of a restructuring plan
aimed at driving further improvements in our operational performance and eliminating inefficiencies in
order to create a fully-integrated, customer-focused organization. This plan will involve the incurrence
of substantial operating and capital expenditures, including certain costs which we expect to treat as
restructuring costs under the Exit or Disposal Cost Obligations Topic of the FASB ASC.
The following table summarizes the movement during the year ended December 31, 2009 on our
historical restructuring accruals, the restructuring accruals resulting from the acquisitions made by us
during 2006 and the restructuring plan announced in 2008 (in millions):
2006
Historical Acquisition 2008
Restructuring Restructuring Restructuring
Accruals Accruals Accruals
Involuntary
Employee
Termination Lease and
Lease Lease and Related Contract
Exit Costs Exit Costs Costs Exit Costs Total
Balance, December 31, 2008 ........... £16.5 £38.5 £ 2.0 £ 14.0 £ 71.0
Amendments offset against goodwill ..... — (5.7) — — (5.7)
Charged to expense ................. 2.9 4.0 24.2 20.0 51.1
Revisions ......................... (2.8) (2.4) (5.4) (0.1) (10.7)
Utilized .......................... (4.0) (7.0) (19.0) (18.4) (48.4)
Balance, December 31, 2009 ........... £12.6 £27.4 £ 1.8 £ 15.5 £ 57.3
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