Virgin Media 2011 Annual Report Download - page 47

Consolidated Results of Operations
Consolidated Results of Operations for the Years Ended December 31, 2011 and 2010
Revenue
Our revenue by segment for the years ended December 31, 2011 and 2010 was as follows (in millions):
Year ended
December 31, Increase/
(Decrease)2011 2010
Consumer ....................................................... £3,354.4 £3,279.0 2.3%
Business ........................................................ 637.4 596.8 6.8
£3,991.8 £3,875.8 3.0%
For the year ended December 31, 2011, revenue increased by 3.0% to £3,991.8 million from
£3,875.8 million for the same period in 2010. This increase was due to higher revenue in both our Consumer and
Business segments. See further discussion of our Consumer and Business segments below.
Operating Costs
Operating costs for the years ended December 31, 2011 and 2010 were as follows (in millions):
Year ended
December 31, Increase/
(Decrease)2011 2010
Operating costs:
Consumer cost of sales ......................................... £1,032.9 £ 997.8 3.5%
Business cost of sales .......................................... 194.7 184.3 5.6
Network and other operating costs ................................ 378.0 392.9 (3.8)
Total operating costs ............................................... £1,605.6 £1,575.0 1.9%
For the year ended December 31, 2011, operating costs, including network expenses, increased by 1.9% to
£1,605.6 million from £1,575.0 million during the same period in 2010. This increase was primarily attributable
to increases in Consumer segment and Business segment cost of sales, partially offset by a decrease in network
and other operating costs. Consumer segment cost of sales increased primarily as a result of increased revenues,
partially offset by lower fixed line and mobile telephony interconnect costs as a result of lower usage. Business
cost of sales increased as the impact on costs of increased install activity and higher retail and wholesale data
revenues was only partially offset by lower retail and wholesale voice cost of sales. Network and other operating
costs declined primarily as a result of lower facilities costs on our network properties due to the current year
benefiting from a reduction in rent and related costs due to accrual adjustments in connection with a review of
our property portfolio. As a result of these changes, along with a 3.0% increase in revenue, total operating costs
as a percentage of revenue decreased to 40.2% for the year from 40.6% for the year ended December 31, 2010.
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