iHeartMedia 2009 Annual Report Download - page 56

Radio Broadcasting Results of Operations
Our radio broadcasting operating results were as follows:
Our radio broadcasting revenue declined approximately $264.7 million during 2008 compared to 2007, with approximately
43% of the decline occurring during the fourth quarter. Our local revenues were down $205.6 million in 2008 compared to 2007.
National revenues declined as well. Both local and national revenues were down as a result of overall weakness in advertising. Our
radio revenue experienced declines across advertising categories including automotive, retail and entertainment advertising
categories. For the year ended December 31, 2008, our total minutes sold and average minute rate declined compared to 2007.
Direct operating expenses declined approximately $3.6 million. Decreases in programming expenses of approximately
$21.2 million from our radio markets were partially offset by an increase in programming expenses of approximately $16.3 million in
our national syndication business. The increase in programming expenses in our national syndication business was mostly related to
contract talent payments. SG&A expenses decreased approximately $7.5 million primarily from reduced marketing and promotional
expenses and a decline in commission expenses associated with the revenue decline. Partially offsetting the decline in SG&A
expenses was an increase in severance in 2008 associated with the restructuring program of approximately $32.6 million and an
increase in bad debt expense of approximately $17.3 million.
Depreciation and amortization increased approximately $45.4 million mostly as a result of additional amortization
associated with the preliminary purchase accounting adjustments to the acquired intangible assets.
Americas Outdoor Advertising Results of Operations
Our Americas outdoor advertising operating results were as follows:
Revenue decreased approximately $54.8 million during 2008 compared to 2007, with the entire decline occurring in the
fourth quarter. Driving the decline was approximately $87.4 million attributable to poster and bulletin revenues associated with
cancellations and non-renewals from major national advertisers, partially offset by an increase of $46.2 million in airport revenues,
digital display revenues and street furniture revenues. Also impacting the decline in bulletin revenue was decreased occupancy while
the decline in poster revenue was affected by a decrease in both occupancy and rate. The increase in airport and street furniture
revenues was primarily driven by new contracts while digital display revenue growth was primarily the result of an increase in the
number of digital displays. Other miscellaneous revenues also declined approximately $13.6 million.
Our Americas direct operating expenses increased $57.0 million primarily from higher site-lease expenses of $45.2 million
primarily attributable to new taxi, airport and street furniture contracts and an increase of $2.4 million in severance. Our SG&A
expenses increased $26.4 million largely from increased bad debt expense of $15.5 million and an increase of $4.5 million in
severance in 2008 associated with our restructuring program.
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(In thousands)
Years Ended December 31,
2008
Combined
2007
Pre-Merger
% Change
Revenue $ 3,293,874 $ 3,558,534 (7%)
Direct operating expenses
979,324 982,966 (0%)
SG&A expenses 1,182,607 1,190,083 (1%)
Depreciation and amortization
152,822 107,466 42%
Operating income $ 979,121 $ 1,278,019 (23%)
(In thousands)
Years Ended December 31,
2008
Combined
2007
Pre-Merger
% Change
Revenue $ 1,430,258 $ 1,485,058 (4%)
Direct operating expenses
647,526 590,563 10%
SG&A expenses 252,889 226,448 12%
Depreciation and amortization
207,633 189,853 9%
Operating income $ 322,210 $ 478,194 (33%)