iHeartMedia 2012 Annual Report Download - page 46

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43
Direct operating expenses increased $67.4 million, attributable to a $52.9 million increase from the impact of movements in
foreign exchange. In addition, increased site lease expense of $15.7 million associated with the increase in revenue was partially
offset by an $8.8 million decline in restructuring expenses. SG&A expenses increased $45.1 million primarily due to a $16.6 million
increase from movements in foreign exchange, a $6.5 million increase related to the unfavorable impact of litigation and higher selling
expenses associated with the increase in revenue.
Reconciliation of Segment Operating Income (Loss) to Consolidated Operating Income
(In thousands)
Years Ended December 31,
2012
2011
2010
CCME
$
942,705
$
888,358
$
840,106
Americas outdoor advertising
287,774
268,766
257,666
International outdoor advertising
73,331
124,471
72,112
Other
58,829
9,427
20,716
Impairment charges
(37,651)
(7,614)
(15,364)
Other operating income (expense) - net
48,127
12,682
(16,710)
Corporate expense (1)
(303,065)
(241,366)
(293,685)
Consolidated operating income
$
1,070,050
$
1,054,724
$
864,841
1 Corporate expenses include expenses related to CCME, Americas outdoor, International outdoor and our Other segment, as well
as overall executive, administrative and support functions.
Share-Based Compensation Expense
We do not have any compensation plans under which we grant stock awards to employees. Our employees receive equity
awards from the equity incentive plans of our indirect parent, CC Media Holdings, Inc. (“CCMH”), and our subsidiary, CCOH. Prior
to the merger, we granted options to purchase our common stock to our employees and directors and our affiliates under our various
equity incentive plans typically at no less than the fair value of the underlying stock on the date of the grant.
As of December 31, 2012, there was $30.3 million of unrecognized compensation cost, net of estimated forfeitures, related to
unvested share-based compensation arrangements that will vest based on service conditions. This cost is expected to be recognized
over a weighted average period of approximately two years. In addition, as of December 31, 2012, there was $15.7 million of
unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation arrangements that will
vest based on market, performance and service conditions. This cost will be recognized when it becomes probable that the
performance condition will be satisfied.
The following table presents amounts related to share-based compensation expense for the years ended December 31, 2012,
2011 and 2010, respectively:
(In thousands)
Years Ended December 31,
2012
2011
2010
CCME
$
6,985
$
4,606
$
7,152
Americas outdoor advertising
5,875
7,601
9,207
International outdoor advertising
4,529
3,165
2,746
Corporate (1)
11,151
5,295
15,141
Total share-based compensation expense
$
28,540
$
20,667
$
34,246
1 Included in corporate share-based compensation for year ended December 31, 2011 is a $6.6 million reversal of expense related
to the cancellation of a portion of an executive’s stock options.