iHeartMedia 2009 Annual Report Download - page 51

I
ncome (Loss) from Discontinued Operations
Income from discontinued operations of $638.4 million recorded during 2008 primarily relates to a gain of $631.9 million,
net of tax, related to the sale of our television business and the sale of radio stations.
Radio Broadcasting Results of Operations
Our radio broadcasting operating results were as follows:
Our radio broadcasting revenue declined approximately $557.5 million in 2009 compared to 2008, driven by decreases in
local and national revenues of $388.5 million and $115.1 million, respectively. Local and national revenue were down as a result of
an overall weakness in advertising and the economy. The decline in advertising demand led to declines in total minutes sold and yield
per minute in 2009 compared to 2008. Our radio revenue experienced declines across markets and advertising categories.
Direct operating expenses declined approximately $77.5 million in 2009 compared to 2008. Compensation expense
declined approximately $55.0 million primarily as a result of cost savings from the restructuring program. We also reclassified
$34.2 million of direct operating expenses to amortization expense related to a purchase accounting adjustment to talent contracts.
Non-renewals of sports contracts resulted in a decrease of $9.1 million while non-cash compensation decreased $13.5 million as a
result of accelerated expense taken in 2008 related to options that vested in the merger. The declines were partially offset by an
increase of approximately $9.4 million in programming expenses primarily related to new contract talent payments in our national
syndication business and an increase of $34.1 million in expense primarily associated with severance accruals related to the
restructuring program. SG&A expenses decreased approximately $249.1 million in 2009 compared to 2008, primarily from a $43.3
million decline in marketing and promotional expenses, a $122.9 million decline in commission and compensation expenses related to
the decline in revenue and cost savings from the restructuring program, and an $18.3 million decline in bad debt expense. Non-cash
compensation decreased $16.0 million as a result of accelerated expense taken in 2008 on options that vested in the merger.
Depreciation and amortization increased approximately $108.4 million in 2009 compared to 2008, primarily as a result of
additional amortization associated with the purchase accounting adjustments to intangible assets acquired in the merger.
Americas Outdoor Advertising Results of Operations
Our Americas outdoor advertising operating results were as follows:
Our Americas revenue decreased approximately $192.1 million in 2009 compared to 2008 primarily driven by declines in
bulletin, poster and transit revenues due to cancellations and non-renewals from larger national advertisers resulting from the overall
weakness in advertising and the economy. The decline in bulletin, poster and transit revenues was also impacted by a decline in rate
compared to 2008.
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(In thousands)
Years Ended December 31,
2009
Pos
t
-Merger
2008
Combined
% Change
Revenue $ 2,736,404 $3,293,874 (17%)
Direct operating expenses
901,799 979,324 (8%)
SG&A expenses 933,505 1,182,607 (21%)
Depreciation and amortization
261,246 152,822 71%
Operating income $ 639,854 $979,121 (35%)
(In thousands)
Years Ended December 31,
2009
Post-Merger
2008
Combined
% Change
Revenue $ 1,238,171 $1,430,258 (13%)
Direct operating expenses
608,078 647,526 (6%)
SG&A expenses 202,196 252,889 (20%)
Depreciation and amortization
210,280 207,633 1%
Operating income $ 217,617 $322,210 (32%)