iHeartMedia 2007 Annual Report Download - page 49

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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:
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 revenue and $11.9 million related to
movements in foreign exchange, partially offset by a decline in billboard revenue for 2006 as compared to 2005.
Direct operating expenses increased $65.4 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 $11.9 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.
Reconciliation of Segment Operating Income (Loss)
48
Years Ended December 31, % Change
(In thousands) 2006 2005 2006 v. 2005
Revenue $1,556,365 $1,449,696 7%
Direct operating expenses 980,477 915,086 7%
Selling, general and administrative expenses 279,668 291,594 (4%)
Depreciation and amortization 228,760 220,080 4%
Operating income $67,460 $ 22,936 194%
Years Ended December 31,
(In thousands) 2006 2005
Radio Broadcasting $1,225,706 $1,154,613
Americas Outdoor Advertising 420,695 359,248
International Outdoor Advertising 67,460 22,936
Other 871 (14,099)
Gain on disposition of assets — ne
t
71,718 49,663
Merger expenses (7,633)
—
Corporate (215,480)(185,946)
Consolidated operating income $1,563,337 $1,386,415