iHeartMedia 2005 Annual Report Download - page 38

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Fiscal Year 2004 Compared to Fiscal Year 2003
Consolidated
(In thousands) Years Ended December 31, % Change
2004 2003 2004 v. 2003
Revenue $ 6,634,890 $ 6,250,930 6%
Operating expenses:
Direct operating expenses (excludes non-cash compensation expense
of $930 and $1,609 in 2004 and 2003, respectively and
depreciation and amortization) 2,330,817 2,141,163 9%
Selling, general and administrative expenses (excludes depreciation
and amortization) 1,911,788 1,870,161 2%
Non-cash compensation expense 3,596 3,716 (3%)
Depreciation and amortization 630,521 608,531 4%
Corporate expenses (excludes non-cash compensation expense of
$2,666 and $2,107 in 2004 and 2003, respectively and
depreciation and amortization) 164,722 150,407 10%
Gain on disposition of assets – net 39,552 6,688 491%
Operating income 1,632,998 1,483,640 10%
Interest expense 367,503 392,215
Gain (loss) on marketable securities 46,271 678,846
Equity in earnings of nonconsolidated affiliates 22,285 20,669
Other income (expense) - net (30,293) 20,783
Income before income taxes, minority interest, discontinued
operations and cumulative effect of a change in accounting
principle 1,303,758 1,811,723
Income tax benefit (expense):
Current (367,679)
(320,522)
Deferred (131,685) (456,399)
Income tax benefit (expense) (499,364) (776,921)
Minority interest expense, net of tax 7,602 3,906
Income before discontinued operations and cumulative effect of a
change in accounting principle 796,792 1,030,896
Income from discontinued operations, net 49,007 114,695
Income before cumulative effect of a change in accounting principle 845,799 1,145,591
Cumulative effect of a change in accounting principle, net of tax of
$2,959,003 (4,883,968)
—
Net income (loss) $ (4,038,169) $ 1,145,591
Revenue
Our consolidated revenue grew $384.0 million during 2004 as compared to 2003 led by a $272.4 million
increase in revenues from our Americas and international outdoor advertising segments. Americas outdoor revenue
growth occurred across the vast majority of our markets, with both poster and bulletin revenues up for the year.
International outdoor revenue grew on higher street furniture sales, driven by an increase in average revenue per display
for 2004 as compared to 2003. International outdoor revenues also benefited from $128.6 million in foreign exchange
fluctuations. Our radio business contributed $59.4 million to our revenue growth, primarily from our mid to small size
markets (those markets outside our top 25), which benefited from higher local advertising revenues during 2004 as
compared to 2003. The remainder of the growth in revenues during 2004 was primarily driven by our television
business, which benefited from political and Olympic advertising.
Direct Operating Expenses
Our consolidated direct operating expenses grew $189.7 million during 2004 as compared to 2003. Our
international outdoor advertising business contributed $95.3 million to the increase, primarily from increased site lease
expenses consistent with the segment’s revenue growth, as well as $76.0 million from foreign exchange fluctuations.
Radio’s direct operating expenses were up $48.4 million for 2004 compared to 2003 principally from increased
programming expenses. Our Americas outdoor advertising business contributed $33.5 million primarily as a result of
$21.8 million from site lease rent expense as a result of an increase in revenue-share payments associated with the