iHeartMedia 2007 Annual Report Download - page 45

Americas Outdoor Advertising Results of Operations
Our Americas outdoor advertising operating results were as follows:
Americas revenue increased $143.7 million, or 11%, during 2007 as compared to 2006 with Interspace contributing approximately
$32.1 million to the increase. The growth occurred across our inventory, including bulletins, street furniture, airports and taxi displays. The
revenue growth was primarily driven by bulletin revenue attributable to increased rates and airport revenue which had both increased rates and
occupancy. Leading advertising categories during the year were telecommunications, retail, automotive, financial services and amusements.
Revenue growth occurred across our markets, led by Los Angeles, New York, Washington/Baltimore, Atlanta, Boston, Seattle and
Minneapolis.
Our Americas direct operating expenses increased $56.2 million primarily from an increase of $46.6 million in site lease expenses
associated with new contracts and the increase in airport, street furniture and taxi revenues. Interspace contributed $14.9 million to the increase.
Our SG&A expenses increased $19.1 million primarily from bonus and commission expenses associated with the increase in revenue and from
Interspace, which contributed approximately $6.7 million to the increase.
Depreciation and amortization increased $10.9 million during 2007 compared to 2006 primarily associated with $5.9 million from
Interspace.
International Outdoor Results of Operations
Our international operating results were as follows:
International revenue increased $240.4 million, or 15%, in 2007 as compared to 2006. Included in the increase was approximately
$133.3 million related to movements in foreign exchange. Revenue growth occurred across inventory categories including billboards, street
furniture and transit, driven by both increased rates and occupancy. Growth was led by increased revenues in France, Italy, Australia, Spain and
China.
Our international direct operating expenses increased approximately $163.8 million in 2007 compared to 2006. Included in the increase was
approximately $88.0 million related to movements in foreign exchange. The remaining increase in direct operating expenses was primarily
attributable to an increase in site lease expenses associated with the increase in revenue. SG&A expenses increased $31.9 million in 2007 over
2006 from approximately $23.4 million related to movements in foreign exchange and an increase in selling expenses associated with the
increase in revenue. Additionally, we recorded a $9.8 million reduction to SG&A in 2006 as a result of the favorable settlement of a legal
proceeding.
Depreciation and amortization declined $19.1 million during 2007 compared to 2006 primarily from contracts which were recorded at fair
value in purchase accounting in prior years and became fully amortized at December 31, 2006.
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Years Ended December 31, % Change
(In thousands) 2007 2006 2007 v. 2006
Revenue $1,485,058 $1,341,356 11%
Direct operating expenses 590,563 534,365 11%
Selling, general and administrative expenses 226,448 207,326 9%
Depreciation and amortization 189,853 178,970 6%
Operating income $478,194 $ 420,695 14%
Years Ended December 31, % Change
(In thousands) 2007 2006 2007 v. 2006
Revenue $1,796,778 $1,556,365 15%
Direct operating expenses 1,144,282 980,477 17%
Selling, general and administrative expenses 311,546 279,668 11%
Depreciation and amortization 209,630 228,760 (8%)
Operating income $131,320 $ 67,460 95%