Virgin Media 2011 Annual Report Download - page 48

Selling, General and Administrative Expenses
Selling, general and administrative expenses for the year ended December 31, 2011 and 2010 were as
follows (in millions):
Year ended
December 31, Increase/
(Decrease)2011 2010
Selling, general and administrative expenses:
Employee and outsourcing costs ......................................... £458.9 £468.5 (2.0)%
Marketing costs ...................................................... 157.1 147.7 6.4
Facilities ........................................................... 56.1 57.1 (1.7)
Other .............................................................. 123.9 117.3 5.6
Total selling, general and administrative expenses .......................... £796.0 £790.6 0.7%
For the year ended December 31, 2011, selling, general and administrative expenses increased by 0.7% to
£796.0 million from £790.6 million for the year ended December 31, 2010. This increase was primarily
attributable to higher marketing and other costs, partially offset by lower employee and outsourcing costs and
facilities costs. Higher marketing costs were primarily as a result of increased marketing activity, mainly in
connection with the launch of TiVo services. Other costs increased primarily as a result of a higher bad debt
expense. Employee and outsourcing costs reduced compared to the prior year primarily as a result of reduced
costs in relation to employee incentive programs. Facilities costs were relatively unchanged, however the current
year benefited from of a reduction in rent and related property costs resulting from accrual adjustments in
connection with a review of our property portfolio. As a result, facilities costs are expected to increase in 2012.
Restructuring and Other Charges
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. Though the majority of the plan is substantially complete, the
remaining portion of the plan is expected to be completed by the end of 2012 and involves the incurrence of
certain operating and capital expenditures, including certain costs which we expect to treat as restructuring.
For the year ended December 31, 2011, restructuring and other charges decreased to £8.4 million from
£53.0 million for the same period in 2010. Restructuring and other charges in the year ended December 31, 2011
related primarily to lease exit costs and involuntary employee termination costs in connection with the
restructuring program initiated in 2008. Restructuring and other charges in the year ended December 31, 2010
related primarily to lease exit costs, including the cost of vacating property leases on our Great Portland Street
office in central London, and involuntary employee termination costs in connection with the restructuring
program initiated in 2008 as discussed below.
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