Virgin Media 2009 Annual Report Download - page 66

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Content Segment
The summary results of operations of our Content segment, which, following the disposal of our
sit-up reporting unit, represents solely our Virgin Media TV operations for the years ended
December 31, 2009 and 2008 were as follows (in millions):
Year ended
December 31,
2009 2008
Revenue .............................................. £140.5 £121.8
Inter segment revenue .................................... 27.3 25.7
Segment contribution ..................................... 11.8 (4.6)
Revenue
For the year ended December 31, 2009, Content segment revenue increased by 15.4% to
£140.5 million from £121.8 million for the year ended December 31, 2008. This increase was primarily
due to increased carriage revenue as a result of the carriage agreement entered into in November 2008
with BSkyB for continued and extended carriage of our Virgin Media TV channels on its satellite
platform at higher rates than under the previous contract, partially offset by reduced advertising
revenue in a declining TV advertising market, although Virgin Media TV increased its overall share of
the TV advertising market.
Content Segment Contribution
For the year ended December 31, 2009, Content segment contribution increased to £11.8 million
from a loss of £4.6 million for the same period in 2008. This increase is mainly due to the increase in
carriage revenue resulting from the BSkyB agreement referred to above partially offset by the decrease
in TV advertising revenue and a small increase in programming investment.
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.
We account for our interest in UKTV under the equity method and recognized a share of net
income of £16.5 million and £18.7 million in the years ended December 31, 2009 and 2008, respectively.
At December 31, 2009, our investment in UKTV was carried on the consolidated balance sheet at
£359.9 million, which includes outstanding loans totaling £129.3 million.
UKTV receives financing through loans from Virgin Media, which totaled £129.3 million at
December 31, 2009. These loans effectively act as a revolving facility for UKTV. We received cash
payments from UKTV in the form of loan capital repayments of £12.5 million for the year ended
December 31, 2009. We received dividends, interest payments and payments for consortium tax relief
from UKTV totaling £8.6 million during 2009.
Additionally, we recorded a loss of £2.4 million and £4.3 million in the years ended December 31,
2009 and 2008, respectively, from our investment in our joint venture with Setanta Sports News.
Setanta Sports News ceased broadcasting in June 2009 and we are in process of winding up this
business.
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