iHeartMedia 2000 Annual Report Download - page 40

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40
Fiscal Year 1999 Compared to Fiscal Year 1998
Consolidated
(In thousands)
Reported Basis: Years Ended December 31, % Change
1999 1998 1999 v. 1998
Net Revenue $2,678,160
$1,350,940
98%
Operating Expenses 1,632,115
767,265
113%
Corporate Expenses 70,146
37,825
85%
EBITDA $ 975,899
$ 545,850
79%
The growth in net revenue and operating expenses was primarily due to the acquisit ions of
Universal Outdoor in April of 1998, More Group in July 1998, Jacor in May 1999 and Dame Media and
Dauphin in July 1999. The acquisitions of Jacor and Dame Media added approximately 230 radio
stations and Premiere Radio Networks and contributed 27% of 1999 net revenue. The acquisition of
Dauphin added approximately 103,000 display faces, including joint ventures, and contributed 5% of
1999 net revenue.
Other Income and Expense Information
Depreciation and amortization expense increased from $305.0 million in 1998 to $722.2 million
in 1999, a 137% increase, primarily due to the acquisition of the tangible and intangible assets associated
with the acquisitions of Jacor in May 1999 and Dauphin and Dame Media in July 1999 as well as the
inclusion of a full year’ s depreciation and amortization expense relating to the acquisitions of Universal in
April 1998 and More Group in July 1998.
Interest expense increased 32% from $135.8 million in 1998 to $179.4 million in 1999 primarily
due to higher average interest rates and an increase in the average amount of debt outstanding, which
resulted from the above-mentioned acquisitions.
Equity in earnings of nonconsolidated affiliates increased 77% to $18.2 million in 1999 over
$10.3 million in 1998 primarily due to the improvement in the operating results of Hispanic Broadcasting
Corporation and Grupo ACIR Comunicaciones.
Income tax expense increased 106% from $74.2 million in 1998 to $152.7 million in 1999
primarily from the increase in the average effective tax rate from 58% in 1998 to 64% in 1999, and the
increase in income before income taxes. The effective tax rate increased as a result of the increase in
nondeductible amortization expense principally associated with the acquisition of Jacor.
Net income increased from $54.0 million in 1998 to $72.5 million in 1999 due to a $138.7
million gain realized during 1999 relating to the divestiture of certain stations in connection with
governmental directives associated with the Jacor merger. This gain was partia lly offset by higher
interest expense, higher depreciation and amortization and the extraordinary loss related to the early
extinguishment of debt acquired in the Jacor merger.