iHeartMedia 2010 Annual Report Download - page 37

Other income of $679.7 million in 2009 relates to an aggregate gain of $368.6 million on the repurchases of certain of our senior
notes and an aggregate gain of $373.7 million on the repurchases of certain of our senior toggle notes and senior cash pay notes. The
gains on extinguishment of debt were partially offset by a $29.3 million loss related to loan costs associated with the $2.0 billion
retirement of certain of our outstanding senior secured debt. Please refer to the “Debt Repurchases, Tender Offers, Maturities and
Other” section within this MD&A for additional discussion of the repurchases and debt retirement.
I
ncome Taxes
The effective tax rate for the year ended December 31, 2010 was 25.7% as compared to 10.9% for the year ended December 31,
2009. The effective tax rate for 2010 was impacted by our inability to benefit from tax losses in certain foreign jurisdictions due to the
uncertainty of the ability to utilize those losses in future years. In addition, we recorded a valuation allowance of $13.6 million in
2010 against deferred tax assets related to capital allowances in foreign jurisdictions due to the uncertainty of the ability to realize
those assets in future periods.
The effective tax rate for 2009 was impacted by the goodwill impairment charges, which are not deductible for tax purposes,
along with our inability to benefit from tax losses in certain foreign jurisdictions as discussed above.
Radio Broadcasting Results of Operations
Our radio broadcasting operating results were as follows:
Radio broadcasting revenue increased $161.7 million during 2010 compared to 2009, driven primarily by a $79.5 million
increase in national advertising and a $51.0 million increase in local advertising. Average rates per minute increased during 2010
compared to 2009 as a result of improved economic conditions. Increases occurred across various advertising categories including
automotive, political, food and beverage and healthcare.
Direct operating expenses during 2010 decreased $81.6 million compared to 2009, primarily from a $29.9 million decline in
expenses incurred in connection with our restructuring program. Cost savings from our restructuring program resulted in declines of
$26.7 million and $11.0 million in programming expenses and compensation expenses, respectively. Direct operating expenses
declined further from the non-renewals of sports contracts, offset by the impact of $8.0 million associated with the finalization of
purchase accounting during the first nine months of 2009. SG&A expenses increased $47.6 million, primarily as a result of a $26.6
million increase in bonus and commission expense associated with the increase in revenue in addition to a $24.1 million increase in
selling and marketing expenses.
Depreciation and amortization decreased $4.6 million during 2010 compared to 2009. The 2009 results included $8.0 million of
additional amortization expense associated with the finalization of purchase price allocations to the acquired intangible assets.
Americas Outdoor Advertising Results of Operations
D
isposition of Taxi Business
On December 31, 2009, our subsidiary CCOI disposed of Clear Channel Taxi Media, LLC (“Taxis”), our taxi advertising
business. For the year ended December 31, 2009, Taxis contributed $41.5 million in revenue, $39.8 million in direct operating
expenses and $10.5 million in SG&A expenses.
33
(In thousands)
Years Ended December 31,
% Chan
g
e
2010 2009
Revenue $ 2,898,087 $ 2,736,404 6%
Direct o
p
eratin
g
ex
p
enses 820,214 901,799 (9%)
SG&A ex
p
enses 981,094 933,505 5%
De
p
reciation and amortization 256,673 261,246 (2%)
O
p
eratin
g
income $ 840,106 $ 639,854 31%