iHeartMedia 2002 Annual Report Download - page 32

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ITEM 7. Management’s Discussion and Analysis of Results of Operations and Financial Condition
OVERVIEW
Management’s discussion and analysis of the results of operation and financial condition of Clear Channel Communications, Inc. and its
subsidiaries should be read in conjunction with the Consolidated Financial Statements and related Footnotes. The discussion is presented on
both a consolidated and segment basis. Our reportable operating segments are: Radio Broadcasting which includes all domestic and
international radio assets and radio networks; Outdoor Advertising which includes domestic and international billboards, transit displays, street
furniture and other outdoor advertising media; and Live Entertainment which includes live music, theatrical, family entertainment and motor
sports events. Included in the “other”segment are television broadcasting, sports representation and our media representation business, Katz
Media.
RESULTS OF OPERATIONS
We evaluate the operating performance of our businesses using several measures, one of them being EBITDA as Adjusted (defined as
revenue less divisional operating and corporate expenses). EBITDA as Adjusted eliminates the uneven effect of such charges as depreciation
and amortization, non-operating gains and losses, income taxes and interest across our business segments, as well as in comparison to other
companies. While we and many in the financial community consider EBITDA as Adjusted to be an important measure of operating
performance, it should be considered in addition to, but not as a substitute for or superior to, other measures of financial performance prepared
in accordance with generally accepted accounting principles such as operating income and net income. In addition, our definition of EBITDA
as Adjusted is not necessarily comparable to similarly titled measures reported by other companies.
We measure the performance of our operating segments and managers based on a pro forma measurement that includes adjustments to the
prior period for all current and prior year acquisitions. Adjustments are made to the prior period to include the operating results of the
acquisition for the corresponding period of time that the acquisition was owned in the current period. In addition, results of operations from
divested assets are excluded from all periods presented. We believe this pro forma presentation is the best comparable measure of our operating
performance as it includes the performance of assets for the period of time we managed the assets.
Our pro forma results are presented in constant U.S. dollars (i.e. a currency exchange adjustment is made to the 2002 actual foreign
revenues and expenses at average 2001 foreign exchange rates) allowing for comparison of operations independent of foreign exchange
movements.
The following tables set forth our consolidated and segment results of operations on both a reported and a pro forma basis.
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