Virgin Media 2010 Annual Report Download - page 114

VIRGIN MEDIA INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Note 4—Disposals (continued)
The fair value of the sit-up reporting unit, which was determined through the use of a combination of both
the market and income approaches to calculate fair value, was found to be less than the carrying value. The
market and income approaches declined from the goodwill impairment test we performed as at June 30, 2008 as a
result of reduced long term cash flow estimates. As a result, we extended our review to include the valuation of
the reporting unit’s individual assets and liabilities and recognized a goodwill impairment charge of
£39.9 million. During the year ended December 31, 2008, we impaired intangible assets relating to our sit-up
reporting unit totaling £14.9 million. Subsequent to the year end, in accordance with the provisions of the
Property, Plant, and Equipment Topic of the FASB ASC, we wrote down the assets held for sale to fair value
based upon the agreed purchase consideration. This resulted in a £19.0 million impairment charge, which was
recognized in the loss from discontinued operations for the year ended December 31, 2009.
Note 5—Fixed Assets (Including Leases)
Fixed assets consist of (in millions):
Useful
Economic Life
December 31,
2010 2009
Total
Under Capital
Leases
(Adjusted)
Total
Under Capital
Leases
Operating equipment
Cable distribution plant ............. 5-30 years £ 6,621.5 £ 28.8 £ 6,384.3 £ 28.8
Switches and headends ............. 3-10 years 835.0 36.7 820.3 20.0
Customer premises equipment ....... 5-10 years 1,175.8 — 1,188.3 —
Other operating equipment .......... 4-20 years 21.7 — 13.2 —
Total operating equipment .......... 8,654.0 65.5 8,406.1 48.8
Other equipment
Land ........................... 8.8 — 13.5 —
Buildings ........................ 20-50 years 99.9 35.6 118.6 —
Leasehold improvements ........... 7years or, if
less, the
lease term 117.2 — 62.0 —
Computer infrastructure ............ 3-5years 241.8 44.5 273.9 56.3
Other equipment .................. 5-10 years 240.2 198.0 248.6 124.0
Total other equipment .............. 707.9 278.1 716.6 180.3
9,361.9 343.6 9,122.7 229.1
Accumulated depreciation ............... (4,714.5) (121.2) (4,216.4) (88.0)
4,647.4 222.4 4,906.3 141.1
Construction in progress ................ 115.7 — 139.5 —
£ 4,763.1 £ 222.4 £ 5,045.8 £141.1
During the years ended December 31, 2010, 2009 and 2008, the assets acquired under capital leases totaled
£132.2 million, £34.4 million and £99.2 million, respectively.
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