iHeartMedia 2006 Annual Report Download - page 37

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37
approximately $12.3 million in salary, bonus and commission expenses in our sales department associated with the
increase in revenue as well as $14.1 million from the adoption of FAS 123(R).
Americas Outdoor Advertising Results of Operations
Our Americas outdoor advertising operating results were as follows:
(In thousands) Years Ended December 31, % Change
2006 2005 2006 v. 2005
Revenue $ 1,341,356 $ 1,216,382 10%
Direct operating expenses 534,365 489,826 9%
Selling, general and administrative expenses 207,326 186,749 11%
Depreciation and amortization 178,970 180,559 (1%)
Operating income $ 420,695 $ 359,248 17%
Our Americas revenue increased 10% during 2006 as compared to 2005 from revenue growth across our
displays. We experienced rate increases on most of our inventory, with occupancy essentially unchanged during 2006 as
compared to 2005. Our airport revenue increased $44.8 million primarily related to $30.2 million from our acquisition
of Interspace. Revenue growth occurred across both our large and small markets including Miami, San Antonio,
Sacramento, Albuquerque and Des Moines.
Direct operating expenses increased $44.5 million in 2006 as compared to 2005 primarily from an increase in
site lease expenses of approximately $30.2 million as well as $3.4 million related to the adoption of FAS 123(R).
Interspace contributed $13.0 million to direct operating expenses in 2006. Our SG&A expenses increased $20.6 million
in 2006 over 2005 primarily from an increase in bonus and commission expenses of $7.6 million related to the increase
in revenue, $6.2 million from Interspace and $1.3 million of share-based payments related to the adoption of FAS
123(R).
International Outdoor Results of Operations
Our international operating results were as follows:
(In thousands) Years Ended December 31, % Change
2006 2005 2006 v. 2005
Revenue $ 1,556,365 $ 1,449,696 7%
Direct operating expenses 918,735 851,635 8%
Selling, general and administrative expenses 341,410 355,045 (4%)
Depreciation and amortization 228,760 220,080 4%
Operating income $ 67,460 $ 22,936 194%
Revenue in our international outdoor segment increased 7% in 2006 as compared to 2005. The increase
includes approximately $44.9 million during the first six months of 2006 related to our consolidation of Clear Media
which we began consolidating in the third quarter of 2005. Also contributing to the increase was approximately $25.9
million from growth in street furniture revenues and $11.9 million related to movements in foreign exchange, partially
offset by a decline in billboard revenues for 2006 as compared to 2005.
Direct operating expenses increased $67.1 million during 2006 as compared to 2005. The increase was
primarily attributable to $18.0 million during the first six months of 2006 related to our consolidation of Clear Media as
well as an increase of approximately $37.7 million in site lease expenses and approximately $7.7 million related to
movements in foreign exchange. Also included in the increase was $0.9 million related to the adoption of FAS 123(R).
Our SG&A expenses declined $13.6 million primarily attributable to a $9.8 million reduction recorded in 2006 as a
result of the favorable settlement of a legal proceeding as well as $26.6 million related to restructuring our businesses in
France recorded in the third quarter of 2005. Partially offsetting this decline was $9.5 million from our consolidation of
Clear Media and $2.9 million from movements in foreign exchange.