iHeartMedia 2002 Annual Report Download - page 47

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Radio Broadcasting
(In thousands)
Revenues and divisional operating expenses increased on a reported basis $1.0 billion and $718.9 million, respectively, primarily due to our
acquisitions completed during 2000. Included in our 2001 reported amounts are a full year of revenues and divisional operating expenses from
our acquisition of AMFM in August 2000. The approximately $1.2 billion increase in reported revenue related to our AMFM acquisition as
well as our other less significant 2000 and 2001 acquisitions were offset by declines in revenue discussed below in our pro forma presentation.
The approximately $728.2 million increase in reported divisional operating expense related to our AMFM acquisition as well as increases
related to our less significant 2000 and 2001 acquisitions were offset by reasons discussed below in our pro forma presentation.
On a pro forma basis, revenue for year ended December 31, 2001 decreased $309.2 million, or 8% due to weak economic conditions in
2001 as compared to the overall strength of the U.S. economy and the increase in advertising spending due to the rapid growth of the Internet
industry during 2000. Although the decrease in pro forma revenue was apparent in most markets, of the $309.2 million decline, our top 25
radio markets accounted for approximately $212.0 million, or 69% of the total decline. The decline in pro forma revenue within these markets
was predominately due to the decline in national advertising during 2001 as compared to 2000. In addition, our radio network revenue declined
$45.1 million, or 15% of the total decline during 2001 as compared to 2000, again directly related to the decline in the overall economy.
On a pro forma basis, 2001 divisional operating expenses were relatively flat as compared to 2000. Although divisional operating expenses
decreased related to the decrease in sales costs associated with the decline in revenue, these decreases were offset by increases in expenses
associated with the reorganization of our radio workforce. During 2001, we hired a significant number of new sales and marketing people in an
effort to create more demand on our advertising inventory and paid severance to other terminated employees.
42
Years Ended December 31,
%Chan
g
e
2001 2000 2001 v. 2000
A
sRe
p
orted Basis:
Revenue $3,455,553 $2,431,544 42%
Divisional Operating Expenses 2,104,719 1,385,848 52%
EBITDA as Adjusted * $1,350,834 $1,045,696 29%
* See page 30 for cautionary disclosure
Pro Forma Basis:
Revenue $3,455,553 $3,764,754 (8)%
Divisional Operating Expenses 2,104,719 2,107,681 0%
Reconciliation of Re
p
orted Basis to Pro Forma Basis
Reported Revenue $3,455,553 $2,431,544
Acquisitions
—
1,398,995
Divestitures —(65,785)
Pro Forma Revenue $3,455,553 $3,764,754
Reported Divisional Operating Expenses $2,104,719 $1,385,848
Acquisitions
—
748,405
Divestitures
—
(26,572)
Pro Forma Divisional Operating Expenses $2,104,719 $2,107,681