Virgin Media 2010 Annual Report Download - page 67

Selling, General and Administrative Expenses
Year ended
December 31, Increase/
(Decrease)2009 2008
(Adjusted) (Adjusted)
Selling, general and administrative expenses:
Employee and outsourcing costs ................................. £449.4 £450.9 (0.3)%
Marketing costs .............................................. 124.7 122.8 1.5
Facilities .................................................... 71.1 62.4 13.9
Other ...................................................... 141.1 168.0 (16.0)
Total selling, general and administrative expenses ....................... £786.3 £804.1 (2.2)%
For the year ended December 31, 2009, selling, general and administrative expenses decreased to
£786.3 million from £804.1 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 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):
Historical
Restructuring
Accruals
2006
Acquisition
Restructuring
Accruals
2008
Restructuring Accruals
Lease
Exit Costs
Lease
Exit Costs
Involuntary
Employee
Termination
and Related
Costs
Lease and
Contract
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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