iHeartMedia 2001 Annual Report Download - page 40

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40
Pro Forma Basis: Years Ended December 31, % Change
2001 2000 2001 v. 2000
Revenue $ 3,455,553 $ 3,764,754 (8)%
Divisional Operating Expenses 2,104,719 2,107,681 0%
Reconciliation of Reported Basis to Pro Forma Basis
(In thousands)
Years Ended December 31,
2001 2000
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
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.