iHeartMedia 2002 Annual Report Download - page 41

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In July, we completed our acquisition of Score Outdoor in the United Kingdom. This acquisition gives us national coverage in billboards in
the United Kingdom, which has helped us gain sales we would not have received prior to the acquisition. We also renewed our Madrid and
Valencia bus contracts.
Divisional operating expenses increased on a reported basis $133.4 million for the year ended December 31, 2002 as compared to 2001. On
a reported basis, Ackerley contributed approximately $19.4 million in expense for the year ended December 31, 2002. The remaining increase
is primarily the result of additional fixed expenses such as real estate and site lease expenses, which includes minimum guarantees on our
municipal contracts.
Live Entertainment
(In thousands)
Reported basis revenue decreased $30.3 million for the year ended December 31, 2002 as compared to 2001, and pro forma basis revenue
decreased $92.2 million for the year ended December 31, 2002 as compared to 2001. Both pro forma and reported basis revenue for the year
ended December 31, 2002 were adversely impacted by a decline in ticket sales, partially due to lower attendance levels as compared to the
prior year resulting from the lingering effects of September 11th. Also, the revenue and attendance impact from current year top grossing acts
like The Rolling Stones, Paul McCartney, Billy Joel and Elton John, and Cher was less than events last year, which included U2, Madonna,
Backstreet Boys, *NSYNC and George Strait.
However, these declines were partially offset by increases in concessions and sponsorships as well as the strengthening of our international
functional currencies against the U.S. dollar. Additionally, we saw a slight increase in season seats and local sponsorship dollars at our
amphitheater events as compared to 2001.
Divisional operating expenses decreased on a reported basis $37.5 million for the year ended December 31, 2002 as compared to 2001, and
pro forma basis divisional operating expenses decreased $95.0 million for the year ended December 31, 2002 as compared to 2001. These
declines are associated with the declines in revenue and cost reductions.
37
Years Ended December 31,
%Chan
g
e
2002 2001 2002 v. 2001
A
sRe
p
orted Basis:
Revenue $2,447,302 $2,477,640 (1%)
Divisional Operating Expenses 2,289,654 2,327,109 (2%)
EBITDA as Adjusted * $ 157,648 $ 150,531 5%
* See page 30 for cautionary disclosure
Pro Forma Basis:
Revenue $2,418,971 $2,511,146 (4%)
Divisional Operating Expenses 2,264,987 2,360,019 (4%)
Reconciliation of Re
p
orted Basis to Pro Forma Basis
Reported Revenue $2,447,302 $2,477,640
Acquisitions
—
48,270
Divestitures
—
(14,764)
Foreign Exchange adjustments (28,331)
—
Pro Forma Revenue $2,418,971 $2,511,146
Reported Divisional Operating Expenses $2,289,654 $2,327,109
Acquisitions —43,438
Divestitures
—
(10,528)
Foreign Exchange adjustments (24,667)
—
Pro Forma Divisional Operating Expenses $2,264,987 $2,360,019