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35
Americas Outdoor Advertising Results of Operations
Our Americas outdoor operating results were as follows:
(In thousands)
Years Ended December 31,
%
2014
2013
Change
Revenue
$
1,253,190
$
1,290,452
(3%)
Direct operating expenses
555,614
566,669
(2%)
SG&A expenses
211,969
220,732
(4%)
Depreciation and amortization
194,640
196,597
(1%)
Operating income
$
290,967
$
306,454
(5%)
Our Americas outdoor revenue decreased $37.3 million compared to 2013, including negative movements in foreign
exchange of $3.4 million. Excluding the impact of foreign exchange movements, Americas outdoor revenue decreased $33.9 million
driven primarily by lower spending by national accounts and the nonrenewal of certain airport contracts. Revenues were also lower in
our Los Angeles market as a result of the impact of litigation as discussed further in Item 3 of Part I of this Annual Report on Form
10-K.
Direct operating expenses decreased $11.1 million compared to 2013, including a decrease of $2.5 million from movements
in foreign exchange. Excluding the impact of foreign exchange movements, direct operating expenses in our Americas outdoor
segment decreased $8.6 million, primarily due to lower site lease expenses related to the decrease in revenues and from the
nonrenewal of certain airport contracts. SG&A expenses decreased $8.8 million compared to 2013, including a decrease of $0.4
million from movements in foreign exchange. Excluding the impact of foreign exchange movements, SG&A expenses in our
Americas outdoor segment decreased $8.4 million primarily due to lower commission expense in connection with lower revenues and
property tax refunds.
International Outdoor Advertising Results of Operations
Our International outdoor operating results were as follows:
(In thousands)
Years Ended December 31,
%
2014
2013
Change
Revenue
$
1,708,069
$
1,655,738
3%
Direct operating expenses
1,041,274
1,028,059
1%
SG&A expenses
336,550
322,840
4%
Depreciation and amortization
207,431
203,927
2%
Operating income
$
122,814
$
100,912
22%
International outdoor revenue increased $52.3 million compared to 2013, including a decrease of $19.3 million from
movements in foreign exchange. Excluding the impact of foreign exchange movements, revenues increased $71.6 million primarily
driven by revenue growth in Europe including Italy, due to a new contract for the Rome airports, as well as Sweden, France, and the
UK. Revenue in emerging markets also increased, particularly in China and Mexico primarily as a result of new contracts.
Direct operating expenses increased $13.2 million compared to 2013, including a decrease of $9.4 million from movements
in foreign exchange. Excluding the impact of movements in foreign exchange, direct operating expenses increased $22.6 million
primarily as a result of higher variable costs associated with new contracts, including the Rome airports contract in Italy. SG&A
expenses increased $13.7 million compared to 2013, including a decrease of $4.1 million from movements in foreign exchange.
Excluding the impact of movements in foreign exchange, SG&A expenses increased $17.8 million primarily due to higher
compensation expense, including commissions, in connection with higher revenues, as well as higher litigation expenses.