Virgin Media 2010 Annual Report Download - page 113

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 4—Disposals (continued)
The assets and liabilities of Virgin Media TV reported as held for sale as of December 31, 2009 comprised
(in millions):
December 31,
2009
Current assets held for sale
Accounts receivable, net ............................... £ 27.4
Programming inventory ............................... 62.1
Prepaid expenses ..................................... 5.8
Fixed Assets ........................................ 3.5
Trademark licenses ................................... 11.3
Goodwill ........................................... 42.7
Current assets held for sale ......................... £152.8
Current liabilities held for sale
Accounts payable .................................... £ 63.2
Accrued expenses .................................... 17.9
Deferred revenue and other liabilities .................... 2.7
Current liabilities held for sale ...................... £ 83.8
Disposal of sit-up
On April 1, 2009, we completed the disposal of our sit-up reporting unit, which was previously included
within our former Content segment. sit-up provided a variety of retail consumer products through three
interactive auction-based television channels: price-drop tv, bid tv and speed auction tv.
We determined that the planned sale of the sit-up business met the requirements as of March 31, 2009 for
sit-up to be reflected as assets and liabilities held for sale and discontinued operations in both the current and
prior periods and we adjusted the consolidated balance sheet as of December 31, 2008 and consolidated
statements of operations and cash flows for the year ended December 31, 2008 accordingly. Revenue of the
sit-up business, reported in discontinued operations, for the years ended December 31, 2009 and 2008 was
£38.9 million and £241.8 million, respectively. sit-up’s pre-tax loss, reported within discontinued operations, for
the years ended December 31, 2009 and 2008 was £22.8 million, and £66.6 million, respectively. Revenue
related to the carriage of the sit-up channels recognized in our former Consumer segment that had previously
been eliminated for consolidation purposes was £0.6 million and £2.7 million for the years ended December 31,
2009 and 2008, respectively.
In accordance with the sale agreement, part of the consideration included a loan note from the purchasers.
On April 1, 2009, we entered into a five-year carriage agreement with sit-up for continued distribution of the
three sit-up channels on our television platform. In general, the agreements governing the loan note and exchange
of services between us and sit-up are for specified periods at commercial rates. Following the sale, our
continuing involvement with sit-up was limited to the loan note and carriage agreement and is therefore not
considered significant. The loan note was repaid during the year ended December 31, 2009.
As at December 31, 2008, we performed an interim goodwill impairment review of our sit-up reporting unit.
In September 2008, we received notification that one of our two licenses to broadcast over Freeview digital
terrestrial television would not be renewed. Along with this, the downturn in the economy had reduced the level
of retail sales. As a result, management concluded that indicators existed that suggested it was more likely than
not that the fair value of this reporting unit was less than its carrying value.
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