##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission
file number 001-14691
 WESTWOOD ONE, INC.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    95-3980449
(I.R.S. Employer
Identification No.)40 West 57thStreet, 5thFloor, New York, NY
(Address of principal executive offices)
    
    10019
(Zip Code)
 (212) 641-2000
 
 Yes þ No o
 Yes o No þ
  Large Accelerated Filer o
    
    Accelerated Filer þ
    
    Non-Accelerated Filer o
    
    Smaller Reporting Company o
 Yes o No þ




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##### 



WESTWOOD ONE, INC.
 INDEX
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Consolidated Balance Sheets
    
    
    3Consolidated Statements of Operations
    
    
    4Consolidated Statements of Cash Flows
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    33Item 4. Controls and Procedures
    
    
    34PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    34Item 1A. Risk Factors
    
    
    34Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 3. Defaults Upon Senior Securities
    
    
    35Item 4. Submission of Matters to a Vote of Security Holders
    
    
    35Item 5. Other Information
    
    
    35Item 6. Exhibits
    
    
    36SIGNATURES
    
    
    38Exhibit Index
    
    
    39Exhibit 10.1Exhibit 10.2Exhibit 31.aExhibit 31.bExhibit 32.aExhibit 32.b
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 WESTWOOD ONE, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except per share amounts)
 March 31,
    
    
    December 31,2009
    
    
    2008(unaudited)
    
    
    (audited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    7,199
    
    
    $
    6,437Accounts receivable, net of allowance for doubtful accounts
of $3,952 (2009) and $3,632 (2008)
    
    
    81,080
    
    
    
    94,273Prepaid and other assets
    
    
    14,629
    
    
    
    18,758Total Current Assets
    
    
    102,908
    
    
    
    119,468Property and equipment, net
    
    
    29,546
    
    
    
    30,417Goodwill
    
    
    33,988
    
    
    
    33,988Intangible assets, net
    
    
    2,477
    
    
    
    2,660Deferred tax asset
    
    
    19,712
    
    
    
    14,220Other assets
    
    
    2,765
    
    
    
    4,335TOTAL ASSETS
    
    $
    191,396
    
    
    $
    205,088LIABILITIES, REDEEMABLE PREFERRED STOCK AND
SHAREHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Accounts payable
    
    $
    20,770
    
    
    $
    27,807Amounts payable to related parties
    
    
    24,225
    
    
    
    22,680Deferred revenue
    
    
    2,587
    
    
    
    2,397Accrued expenses and other liabilities
    
    
    29,797
    
    
    
    25,565Current maturity of long-term debt
    
    
    
    
    
    
    249,053Total Current Liabilities
    
    
    77,379
    
    
    
    327,502Long-term debt
    
    
    251,446
    
    
    
    Other liabilities
    
    
    7,049
    
    
    
    6,993TOTAL LIABILITIES
    
    
    335,874
    
    
    
    334,495Commitments and ContingenciesRedeemable Preferred Stock: $.01 par value, authorized: 10,000 shares;
issued and outstanding: 75 shares of 7.5% Series A Convertible
Preferred Stock; liquidation preference $1,000 per share, plus
accumulated dividends
    
    
    79,545
    
    
    
    73,738SHAREHOLDERS (DEFICIT) EQUITYCommon stock, $.01 par value: authorized: 300,000 shares;
issued and outstanding: 101,259 (2009) and 101,253 (2008)
    
    
    1,013
    
    
    
    1,013Class B stock, $.01 par value: authorized: 3,000 shares;
issued and outstanding: 292 (2009 and 2008)
    
    
    3
    
    
    
    3Additional paid-in capital
    
    
    287,293
    
    
    
    293,120Net unrealized gain
    
    
    402
    
    
    
    267Accumulated deficit
    
    
    (512,734
    )
    
    
    (497,548
    )TOTAL SHAREHOLDERS EQUITY (DEFICIT)
    
    
    (224,023
    )
    
    
    (203,145
    )TOTAL LIABILITIES, REDEEMABLE PREFERRED
STOCK AND SHAREHOLDERS EQUITY (DEFICIT)
    
    $
    191,396
    
    
    $
    205,088
   3




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##### Table of Contents



WESTWOOD ONE, INC.
 
 CONSOLIDATED STATEMENT OF OPERATIONS
 (In thousands, except share and per share amounts)
  Three Months EndedMarch 31,2009
    
    
    2008NET REVENUE
    
    $
    85,867
    
    
    $
    106,627Operating Costs (includes related party expenses
of $20,020 and $17,827, respectively)
    
    
    91,393
    
    
    
    94,229Depreciation and Amortization (includes related party
warrant amortization in 2008 of $1,618)
    
    
    2,063
    
    
    
    3,976Corporate General and Administrative Expenses (includes
related party expenses in 2008 of $656)
    
    
    2,766
    
    
    
    3,466Restructuring Charges
    
    
    3,440
    
    
    
    Special Charges (includes related party expenses
of $1,713 in 2009 and $5,000 in 2008)
    
    
    5,809
    
    
    
    7,956105,471
    
    
    
    109,627OPERATING (LOSS) INCOME
    
    
    (19,604
    )
    
    
    (3,000
    )Interest Expense
    
    
    3,263
    
    
    
    5,399Other Income
    
    
    (300
    )
    
    
    (41
    )INCOME (LOSS) BEFORE INCOME TAX
    
    
    (22,567
    )
    
    
    (8,358
    )INCOME TAX (BENEFIT) EXPENSE
    
    
    (7,381
    )
    
    
    (3,020
    )NET (LOSS) INCOME
    
    $
    (15,186
    )
    
    $
    (5,338
    )NET (LOSS) INCOME attributable to Common Stockholders
    
    $
    (16,650
    )
    
    $
    (5,338
    )(LOSS) EARNINGS PER SHARECOMMON STOCKBASIC
    
    $
    (0.17
    )
    
    $
    (0.06
    )DILUTED
    
    $
    (0.17
    )
    
    $
    (0.06
    )CLASS B STOCKBASIC
    
    $
    
    
    
    $
    DILUTED
    
    $
    
    
    
    $
    WEIGHTED AVERAGE SHARES OUTSTANDING:COMMON STOCKBASIC
    
    
    98,074
    
    
    
    89,423DILUTED
    
    
    98,074
    
    
    
    89,423CLASS B STOCKBASIC
    
    
    292
    
    
    
    292DILUTED
    
    
    292
    
    
    
    292
   4




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WESTWOOD ONE, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands, except per share amounts)
  Three Months EndedMarch 31,2009
    
    
    2008CASH FLOW FROM OPERATING ACTIVITIES:Net (loss)
    
    $
    (15,186
    )
    
    $
    (5,338
    )Adjustments to reconcile net (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    2,063
    
    
    
    3,977Deferred taxes
    
    
    (6,698
    )
    
    
    522Non-cash stock compensation
    
    
    1,352
    
    
    
    2,123Amortization of deferred financing costs
    
    
    308
    
    
    
    352Net change in assets and liabilities:
    
    
    20,295
    
    
    
    (12,392
    )Net Cash Provided (Used) By Operating Activities
    
    
    2,134
    
    
    
    (10,756
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (1,169
    )
    
    
    (3,664
    )Net Cash (Used) In Investing Activities
    
    
    (1,169
    )
    
    
    (3,664
    )CASH FLOW FROM FINANCING ACTIVITIES:Issuance of common stock
    
    
    
    
    
    
    22,750Debt repayments and payments of capital lease obligations
    
    
    (203
    )
    
    
    (7,049
    )Deferred financing costs
    
    
    
    
    
    
    (1,537
    )Net Cash (Used) Provided in Financing Activities
    
    
    (203
    )
    
    
    14,164NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    762
    
    
    
    (256
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    6,437
    
    
    
    6,187CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    7,199
    
    
    $
    5,931
   5




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##### Table of Contents



WESTWOOD ONE, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (in thousands, except per share amounts)
 NOTE 1 Basis of Presentation:
    NOTE 2 Earnings Per Share:
    6




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
  Three Months EndedMarch 31,2009
    
    
    2008Net (Losses) Income
    
    $
    (15,186
    )
    
    $
    (5,338
    )Less: Accumulated Preferred Stock dividends
    
    
    (1,464
    )
    
    
    Less: distributed earnings to common stockholders
    
    
    
    
    
    
    Less: distributed earnings to Class B stockholders
    
    
    
    
    
    
    Undistributed earnings
    
    $
    (16,650
    )
    
    $
    (5,338
    )Earnings  common stockBasicDistributed earnings to common stockholders
    
    $
    
    
    
    $
    Undistributed earnings allocated to common stockholders
    
    
    (16,650
    )
    
    
    (5,338
    )Total Earnings  common stock, basic
    
    $
    (16,650
    )
    
    $
    (5,338
    )DilutedDistributed earnings to common stockholders
    
    $
    
    
    
    $
    Distributed earnings to Class B stockholders
    
    
    
    
    
    
    Undistributed earnings allocated to common stockholders
    
    
    (16,650
    )
    
    
    (5,338
    )Total Earnings  common stock, diluted
    
    $
    (16,650
    )
    
    $
    (5,338
    )Weighted average common shares outstanding, basic
    
    
    98,074
    
    
    
    89,423Share-based compensation
    
    
    
    
    
    
    Warrants
    
    
    
    
    
    
    Weighted average Class B shares
    
    
    
    
    
    
    Weighted average common shares outstanding, diluted
    
    
    98,074
    
    
    
    89,423(Loss) Earnings per common share, basicDistributed earnings, basic
    
    $
    
    
    
    $
    Undistributed earnings  basic
    
    
    (0.17
    )
    
    
    (0.06
    )Total
    
    $
    (0.17
    )
    
    $
    (0.06
    )(Loss) Earnings per common share, dilutedDistributed earnings, diluted
    
    $
    
    
    
    $
    Undistributed earnings  diluted
    
    
    0.17
    
    
    
    (0.06
    )Total
    
    $
    (0.17
    )
    
    $
    (0.06
    )Earnings per share  Class B StockBasicDistributed earnings to Class B stockholders
    
    $
    
    
    
    $
    Undistributed earnings allocated to Class B stockholders
    
    
    
    
    
    
    Total Earnings  Class B Stock, basic
    
    $
    0
    
    
    $
    0DilutedDistributed earnings to Class B stockholders
    
    $
    
    
    
    $
    Undistributed earnings allocated to Class B stockholders
    
    
    
    
    
    
    Total Earnings  Class B Stock, diluted
    
    $
    0
    
    
    $
    0Weighted average Class B shares outstanding, basic
    
    
    292
    
    
    
    292Share-based compensation
    
    
    
    
    
    
    Warrants
    
    
    
    
    
    
    Weighted average Class B shares outstanding, diluted
    
    
    292
    
    
    
    292Earnings per Class B share, basicDistributed earnings, basic
    
    $
    0.00
    
    
    $
    0.00Undistributed earnings  basic
    
    
    
    
    
    
    Total
    
    $
    0.00
    
    
    $
    0.00Earnings per Class B share, dilutedDistributed earnings, diluted
    
    $
    0.00
    
    
    $
    0.00Undistributed earnings  diluted
    
    
    
    
    
    
    Total
    
    $
    0.00
    
    
    $
    0.00
  7




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
  Three Months EndedMarch 31,2009
    
    
    2008Options
    
    
    7,021
    
    
    
    6,636Restricted Stock
    
    
    185
    
    
    
    978Restricted Stock Units
    
    
    1,212
    
    
    
    205Warrants
    
    
    10,000
    
    
    
    18,418
    
    
    
    7,819
   NOTE 3 Related Party Transactions:
   8




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
  Three Months EndedMarch 31,2009
    
    
    2008Representation Agreement
    
    $
    3,247
    
    
    $
    5,698Programming and Affiliate Arrangements
    
    
    16,773
    
    
    
    12,129Management Agreement
(excluding warrant amortization)
    
    
    
    
    
    
    610Warrant Amortization
    
    
    
    
    
    
    1,617Payment upon closing
of Master Agreement
    
    
    
    
    
    
    5,000$
    20,020
    
    
    $
    25,054
  Gores Radio Holdings
  POP Radio
   9




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 4 Property and Equipment:
  March 31,
    
    
    December 31,2009
    
    
    2008Land, buildings and improvements
    
    $
    12,007
    
    
    $
    11,999Recording, broadcasting and studio equipment
    
    
    72,749
    
    
    
    75,907Furniture, equipment and other
    
    
    18,454
    
    
    
    18,445$
    103,210
    
    
    $
    106,351Less: Accumulated depreciation and amortization
    
    
    73,664
    
    
    
    75,934Property and equipment, net
    
    $
    29,546
    
    
    $
    30,417
  NOTE 5 Goodwill Impairment:
     10




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 6 Acquisitions and Investments:
 TrafficLand
   NOTE 7 Debt:
  March 31, 2009
    
    
    December 31, 2008Revolving Credit Facility/Term Loan
    
    $
    41,000
    
    
    $
    41,0004.64% Senior Notes
due on November 30, 2009
    
    
    52,069
    
    
    
    51,4755.26% Senior Notes
due on November 30, 2012
    
    
    156,526
    
    
    
    154,503Deferred derivative gain
    
    
    1,851
    
    
    
    2,075$
    251,446
    
    
    $
    249,053
     11




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 8 Fair Value Measurements:
    Fair Value Hierarchy
  
    
    Level 1  Quoted prices in active markets that are unadjusted and accessible at the
measurement date for identical, unrestricted assets or liabilities;
 
    
    Level 2  Quoted prices for identical assets and liabilities in markets that are not
active, quoted prices for similar assets and liabilities in active markets or financial
instruments for which significant inputs are observable, either directly or indirectly;
 
    
    Level 3  Prices or valuations that require inputs that are both significant to the fair
value measurement and unobservable.
  Items Measured at Fair Value on a Recurring Basis
  Level 1
    
    
    Level 2
    
    
    Level 3Assets:Investments
    
    $
    651
    
    
    $
    
    
    
    $
    Total Assets
    
    $
    651
    
    
    $
    
    
    
    $
    
  12




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 9 Shareholders Equity and Series A Preferred Stock:
      NOTE 10 Equity-Based Compensation:
 Equity Compensation Activity
  Weighted2009
    
    
    AverageShares
    
    
    Exercise PriceUnvested at December 31, 2008
    
    
    7,000
    
    
    $
    7.58Granted during the period
    
    
    25
    
    
    
    0.06Forfeited during the period
    
    
    (4
    )
    
    
    18.12Unvested at March 31, 2009
    
    
    7,021
    
    
    $
    7.56
   13




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 11 Other Income/(Loss):
  NOTE 12 Comprehensive Income (Loss):
  Three Months EndedMarch 31,2009
    
    
    2008Net (loss) Income
    
    $
    (15,186
    )
    
    $
    (5,338
    )Unrealized gain (loss) on marketable securities
net of income taxes
    
    
    135
    
    
    
    2,548Comprehensive (loss) Income
    
    $
    (15,051
    )
    
    $
    (2,790
    )
 NOTE 13 Income Taxes:
     14




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 14 Restructuring Charges:
      Restructuring Liability
    
    Severance Termination Cost
    
    
    Facilities Consolidation Related Costs
    
    
    Contract Termination
    
    
    TotalBalance at December 31, 2008
    
    
    3,198
    
    
    
    790
    
    
    
    3,796
    
    
    
    7,784Charges
    
    
    1,658
    
    
    
    1,782
    
    
    
    
    
    
    
    3,440Payments
    
    
    (884
    )
    
    
    (115
    )
    
    
    (360
    )
    
    
    (1,359
    )Non-Cash utilization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at March 31, 2009
    
    
    3,972
    
    
    
    2,457
    
    
    
    3,436
    
    
    
    9,865
  15




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 15 Special Charges:
  Three Months EndedMarch 31,2009
    
    
    2008Professional fees related to the new CBS arrangement
    
    
    
    
    
    
    2,956Closing payment to CBS related to cancelling the previous
CBS agreement
    
    
    
    
    
    
    5,000Facilities shutdown costs
    
    
    96Fees related to the Gores investment and the debt
refinancing / recapitalization
    
    
    5,713$
    5,809
    
    
    $
    7,956
 NOTE 16 Segment Information:
      16




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 Three Months EndedMarch 31,2009
    
    
    2008Net RevenueNetwork
    
    $
    51,184
    
    
    $
    59,185Metro/Traffic
    
    
    34,683
    
    
    
    47,442Total Net Revenue
    
    $
    85,867
    
    
    $
    106,627
 Three Months EndedMarch 31,2009
    
    
    2008Segment Operating (Loss) IncomeNetwork
    
    $
    (4,465
    )
    
    $
    8,073Metro/Traffic
    
    
    (5,512
    )
    
    
    3,335Total Segment Operating Income
    
    $
    (9,977
    )
    
    $
    11,408Corporate Expenses
    
    
    (9,626
    )
    
    
    (14,408
    )Operating (Loss) Income
    
    $
    (19,603
    )
    
    $
    (3,000
    )Interest Expense
    
    
    (3,263
    )
    
    
    (5,399
    )Other Income
    
    
    300
    
    
    
    41(Loss) Income Before Income Taxes
    
    $
    (22,567
    )
    
    $
    (8,358
    )
 Three Months EndedMarch 31,2009
    
    
    2008Depreciation and AmortizationNetwork
    
    $
    871
    
    
    $
    756Metro/Traffic
    
    
    1,185
    
    
    
    1,596Corporate
    
    
    7
    
    
    
    1,624Total Depreciation and Amortization
    
    $
    2,063
    
    
    $
    3,976
 Three Months EndedMarch 31,2009
    
    
    2008AssetsNetwork
    
    $
    76,368
    
    
    $
    132,645Metro/Traffic
    
    
    71,650
    
    
    
    467,502Corporate
    
    
    43,379
    
    
    
    43,864Total Assets (1)
    
    $
    191,396
    
    
    $
    644,011
 Three Months EndedMarch 31,2009
    
    
    2008Capital ExpendituresNetwork
    
    $
    494
    
    
    $
    3,365Metro/Traffic
    
    
    675
    
    
    
    299Corporate
    
    
    
    
    
    
    Total Capital Expenditures
    
    $
    1,169
    
    
    $
    3,664
 
 (1)
    
    An impairment charge of $206,053 in the second quarter of 2008 and $224,073 in the fourth
quarter of 2008 reduced the balance of Goodwill.  17




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 17 Subsequent Events:
  Debt Restructuring
 Securities Purchase Agreement
         18




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 New Credit Agreement
      Equity Restructuring
 Purchase Agreement
 A-1 Preferred
  19




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 Terms of Series A-1 Preferred Stock
 pari passu
   Terms of Series B Preferred Stock
 pari passu
  Black Line Division
   20




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 18 Recent Accounting Pronouncements:
       21




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations  (In thousands except per share amounts)
 EXECUTIVE OVERVIEW
        22




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23




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##### Table of Contents



Results of Operations
  Three Months Ended March 31, 2009 Compared With Three Months Ended March 31, 2008
 Revenue
  For the Three Months Ended March 31,2009
    
    
    2008$
    
    
    % of Total
    
    
    $
    
    
    % of TotalMetro
    
    $
    34,684
    
    
    
    40.4
    %
    
    $
    47,442
    
    
    
    44.5
    %Network
    
    
    51,183
    
    
    
    59.6
    %
    
    
    59,185
    
    
    
    55.5
    %Total (1)
    
    $
    85,867
    
    
    
    100.0
    %
    
    $
    106,627
    
    
    
    100.0
    %
 
 1)
    
    As described above, we currently aggregate revenue data based on the operating segment.
A number of advertisers purchase both local/regional and national commercial airtime in
both segments. Our objective is to optimize total revenue from those advertisers.    24




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##### Table of Contents



Operating Costs
  2009
    
    
    2008$
    
    
    % of Total
    
    
    $
    
    
    % of TotalPayroll and payroll related
    
    $
    21,920
    
    
    
    24
    %
    
    $
    26,243
    
    
    
    28
    %Programming and production
    
    
    28,805
    
    
    
    32
    %
    
    
    28,665
    
    
    
    30
    %Program and operating
    
    
    4,570
    
    
    
    5
    %
    
    
    4,167
    
    
    
    4
    %Station compensation
    
    
    19,769
    
    
    
    22
    %
    
    
    19,138
    
    
    
    20
    %Other operating expenses
    
    
    16,329
    
    
    
    18
    %
    
    
    16,016
    
    
    
    17
    %$
    91,393
    
    
    
    100
    %
    
    $
    94,229
    
    
    
    100
    %
 %,
  Depreciation and Amortization
   Corporate General and Administrative Expenses
   25




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##### Table of Contents



Goodwill Impairment
  Restructuring Charges
  Special Charges
  Operating (Loss) Income
   Interest Expense
   Provision for Income Taxes
  Net (Loss) Income
  Weighted Average Shares Outstanding
   26




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##### Table of Contents



Liquidity and Capital Resources
   Existing Indebtedness
      27




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##### Table of Contents



Indebtedness prior to April 23, 2009
     Current Position
     Recent Accounting Pronouncements
   28




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##### Table of Contents



Cautionary Statement Concerning Forward-Looking Statements and Factors Affecting Forward-Looking
Statements
   29




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##### Table of Contents



Risks Related to Our Business
 Our operating income has declined since 2002. We may not be able to reverse this trend or reduce
costs sufficiently to offset declines in revenue if such trends continue
  The global credit market disruptions and economic slowdown which significantly worsened in the last
half of 2008 have created a difficult and uncertain environment across all industries and there is
no immediate sign of a recovery.
  The cost of our indebtedness has increased substantially, which, when combined with our recent
performance of declining revenue, further affects our liquidity and could limit our ability to
implement our business plan and respond competitively
   30




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##### Table of Contents



Although we have recently significantly reduced our level of indebtedness, our level of
indebtedness remains significant and the interest on such indebtedness remains high, which could
adversely affect our liquidity and future business operations if our operating income continues to
decline.
  Our new Credit Agreement and Securities Purchase Agreement governing our New Senior Notes contain
various covenants which, if not complied with, could accelerate repayment under such indebtedness,
thereby materially and adversely affecting our financial condition and results of operations.
  
    
    limitations on our ability to incur debt, incur liens, make investments, make
capital expenditures, consummate acquisitions, pay dividends, sell assets and enter
into mergers and similar transactions; and
 
    
    a maximum senior leverage ratio (the principal amount of Senior Notes over our
consolidated EBITDA measured on a trailing, four-quarter basis) which is 6.25 to 1.0
ratio on December 31, 2009 but begins to decline on a quarterly basis thereafter,
including to a 4.5 to 1.0 ratio on December 31, 2010 and a 3.5 to 1.0 ratio on December
31, 2011.
  Our revenue could further decline if the general economy and broadcast industry do not improve and
even more so if the economy and industry worsen, and consumer spending remains constrained or is
further restricted
   31




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##### Table of Contents



Our business is subject to increased competition resulting from new entrants into our business,
consolidated companies and new technology/platforms, each of which has the potential to adversely
affect our business.
  
    
    advertiser spending patterns, including the notion that orders are placed in
close proximity to the time such ads are broadcast, which could affect spending
patterns and limit our visibility of demand for our products;
    
    the level of competition for advertising dollars;
    
    new competitors or existing competitors with expanded resources, including as a
result of consolidation; and
    
    lower than anticipated market acceptance of new or existing products.
  Gores, through its voting control of the Company, is in a position to control actions that require
stockholder approval.
  Continued consolidation in the radio broadcast industry could adversely affect our operating
results
 e.g.,
  32




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##### Table of Contents



We may be required to recognize further impairment charges
  Risks Relating to Our Common Stock
 We have has been delisted from the New York Stock Exchange and do not have immediate plans to list
on an alternate exchange
   
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
     33




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##### Table of Contents



Item 4. Controls and Procedures
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  Issuer Purchases of Equity Securities
 Approximate DollarTotal Number of
    
    
    Value of Shares thatTotal
    
    
    
    
    
    
    Shares Purchased as
    
    
    May Yet BeNumber of Shares
    
    
    
    
    
    
    Part of Publicly
    
    
    Purchased UnderPurchased in
    
    
    Average Price Paid
    
    
    Announced Plan or
    
    
    the Plans orPeriod
    
    Period
    
    
    Per Share
    
    
    Program
    
    
    Programs (A)1/1/09  1/31/09
    
    
    
    
    
    
    N/A2/1/09  2/28/09
    
    
    
    
    
    
    N/A3/1/09  3/31/09
    
    
    
    
    
    
    N/A
 (A)
    
    Represents remaining authorization from the $250 million repurchase authorization approved on
February 24, 2004 and the additional $300 million authorization approved on April 29, 2004.  34




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##### Table of Contents



Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Changes to Director Nomination Procedures
      35




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##### Table of Contents



Item 6. Exhibits
 ExhibitNumber (A)
    
    Description of Exhibit3.1
    
    
    Restated Certificate of Incorporation, as filed with the
Secretary of the State of Delaware. (1)3.2
    
    
    Amended and Restated Bylaws of Registrant adopted on April 23,
2009 and currently in effect. (2)4.1
    
    
    Note Purchase Agreement, dated as of December 3, 2002, between
the Company and the Purchasers parties thereto. (3)4.1.1
    
    
    First Amendment, dated as of February 28, 2008, to Note
Purchase Agreement, dated as of December 3, 2002, by and
between Registrant and the noteholders parties thereto. (4)4.2
    
    
    Securities Purchase Agreement, dated as of April 23, 2009, by
and among Westwood One, Inc. and the other parties thereto. (2)
  36




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##### Table of Contents



ExhibitNumber (A)
    
    Description of Exhibit4.3
    
    
    Certificate of Designations for the 7.50% Series A-1
Convertible Preferred Stock as filed with the Secretary of
State of the State of Delaware on April 23, 2009. (2)4.4
    
    
    Certificate of Designations for the 8.0% Series B Convertible
Preferred Stock as filed with the Secretary of State of the
State of Delaware on April 23, 2009. (2)4.5
    
    
    First Amendment to Security Agreement, dated as of April 23,
2009, by and among Westwood One, Inc., each of the subsidiaries
of Westwood One, Inc. and The Bank of New York Mellon, as
collateral trustee. (2)10.1
    *
    
    Separation Agreement, effective as of March 31, 2009, by and
between Registrant and Andrew Hersam. +10.2
    *
    
    Consulting Agreement made as of April 27, 2009, by and between
Registrant and Andrew Hersam. +31.a
    *
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.b
    *
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.a
    **
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.b
    **
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 *
    
    Filed herewith.**
    
    Furnished herewith.+
    
    Indicates a management contract or compensatory plan.(A)
    
    The Company agrees to furnish supplementally a copy of any omitted schedule to the SEC upon
request.(1)
    
    Filed as an exhibit to Companys quarterly report on Form 10-Q for the year ended June 30,
2008 and incorporated herein by reference.(2)
    
    Filed as an exhibit to Companys current report on Form 8-K dated April 27, 2009 and
incorporated herein by reference.(3)
    
    Filed as an exhibit to Companys current report on Form 8-K dated December 4, 2002 and
incorporated herein by reference.(4)
    
    Filed as an exhibit to Registrants current report on Form 8-K dated February 28, 2008 and
incorporated herein by reference.  37




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##### Table of Contents



SIGNATURES
  WESTWOOD ONE, INC.By:
    /s/ Roderick M. Sherwood IIIName:
    Roderick M. Sherwood IIITitle:
    President and CFO   38




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description of Exhibit10.1
    *
    
    Separation Agreement, effective as of March 31, 2009, by and between Registrant and Andrew
Hersam. +10.2
    *
    
    Consulting Agreement made as of April 27, 2009, by and between Registrant and Andrew
Hersam. +31.a
    *
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.b
    *
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.a
    **
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.32.b
    **
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.**
    
    Furnished herewith.+
    
    Indicates a management contract or compensatory plan.  39