Virgin Media 2011 Annual Report Download - page 59

Selling, General and Administrative Expenses
Selling, general and administrative expenses for the year ended December 31, 2010 and 2009 were as
follows (in millions):
Year ended
December 31, Increase/
(Decrease)2010 2009
(Adjusted)
Selling, general and administrative expenses:
Employee and outsourcing costs ................................... £468.5 £449.4 4.3%
Marketing costs ................................................ 147.7 124.7 18.4
Facilities ..................................................... 57.1 71.1 (19.7)
Other ........................................................ 117.3 141.1 (16.9)
Total selling, general and administrative expenses ......................... £790.6 £786.3 0.5%
For the year ended December 31, 2010, selling, general and administrative expenses increased by 0.5% to
£790.6 million from £786.3 million for the year ended December 31, 2009. This increase was primarily
attributable to higher marketing and employee and outsourcing costs, partially offset by lower facilities costs, bad
debt write-offs and reduced IT outsourcing costs. Lower facilities costs were partly due to rates refunds received
from government authorities during the year along with revisions in our recognition policies in respect of
retirement obligations for equipment and leasehold improvements on certain leased premises.
Restructuring and Other Charges
For the year ended December 31, 2010, restructuring and other charges increased to £53.0 million from
£40.4 million for the same period in 2009. 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. Restructuring and other charges in the year ended December 31,
2009 related primarily to lease exit costs and involuntary employee termination costs in connection with the
restructuring program initiated in 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 involves 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 the movement during the year ended December 31, 2010 on our
restructuring accruals (in millions):
Historical
Restructuring
Accruals
2008
Restructuring Accruals
Lease
Exit Costs
Involuntary
Employee
Termination
and Related
Costs
Lease and
Contract
Exit Costs Total
Balance at December 31, 2009 ............................ £40.0 £ 1.8 £ 15.5 £ 57.3
Amendments offset against goodwill ....................... (0.3) 0.0 0.0 (0.3)
Charged to expense ..................................... 3.0 7.8 31.7 42.5
Revisions ............................................ 7.2 (0.8) 4.1 10.5
Utilized .............................................. (14.1) (7.7) (30.6) (52.4)
Balance at December 31, 2010 ............................ £35.8 £ 1.1 £ 20.7 £ 57.6
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