##### 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 June 30, 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 0-14691
 
 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
 
 þ o
 o o
  Large Accelerated Filer o
    
    Accelerated Filer þ
    
    Non-Accelerated Filer o
    
    Smaller Reporting Company o
 o 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
    
    
    5Consolidated Statements of Shareholders Equity
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of
Financial Condition and Results of
Operations
    
    
    29Item 3. Quantitative and Qualitative Disclosures
About Market Risk
    
    
    49Item 4. Controls and Procedures
    
    
    49PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    50Item 1A. Risk Factors
    
    
    50Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds
    
    
    50Item 3. Defaults Upon Senior Securities
    
    
    50Item 4. Submission of Matters to a Vote of
Security Holders
    
    
    51Item 5. Other Information
    
    
    51Item 6. Exhibits
    
    
    51SIGNATURES
    
    
    53Exhibit Index
    
    
    54Exhibit 3.1.1Exhibit 10.1Exhibit 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)
 Successor Company
    
    
    
    
    Predecessor CompanyJune 30,
    
    
    December 31,2009
    
    
    2008(unaudited)
    
    
    (derived from audited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    7,980
    
    
    $
    6,437Accounts receivable
    
    
    82,448
    
    
    
    94,273Prepaid and other assets
    
    
    17,026
    
    
    
    18,758Total Current Assets
    
    
    107,454
    
    
    
    119,468Property and equipment, net
    
    
    36,357
    
    
    
    30,417Goodwill
    
    
    86,414
    
    
    
    33,988Intangible assets, net
    
    
    112,032
    
    
    
    2,660Deferred tax asset
    
    
    2,385
    
    
    
    14,220Other assets
    
    
    2,414
    
    
    
    4,335TOTAL ASSETS
    
    $
    347,056
    
    
    $
    205,088LIABILITIES, REDEEMABLE PREFERRED STOCK AND
SHAREHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Accounts payable
    
    $
    17,588
    
    
    $
    27,807Amounts payable to related parties
    
    
    20,128
    
    
    
    22,680Deferred revenue
    
    
    2,681
    
    
    
    2,397Accrued expenses and other liabilities
    
    
    19,648
    
    
    
    25,565Current maturity of long-term debt
    
    
    
    
    
    
    249,053Total Current Liabilities
    
    
    60,045
    
    
    
    327,502Long-term debt
    
    
    128,078
    
    
    
    Deferred tax liability
    
    
    63,845
    
    
    
    Due to Gores
    
    
    10,891
    
    
    
    Other liabilities
    
    
    10,551
    
    
    
    6,993TOTAL LIABILITIES
    
    
    273,410
    
    
    
    334,495Commitments and ContingenciesRedeemable Preferred Stock: $.01 par value, authorized: 75 shares;
issued and outstanding: 75 shares of 7.5% Series A-1
Preferred Stock; liquidation preference $1,065 per share, plus
accumulated dividends
    
    
    38,880Redeemable Preferred Stock: $.01 par value, authorized: 60 shares;
issued and outstanding: 60 shares of 8.0% Series B Convertible
Preferred Stock; liquidation preference $1,000 per share, plus
accumulated dividends
    
    
    30,476Redeemable 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
    
    
    
    
    
    
    73,738Total
Redeemable Preferred Stock
    
    
    69,356
    
    
    
    73,738SHAREHOLDERS (DEFICIT) EQUITYCommon stock, $.01 par value: authorized: 300,000 shares;
issued and outstanding: 510 (2009) and 101,253 (2008)
    
    
    5
    
    
    
    1,013Class B stock, $.01 par value: authorized: 3,000 shares;
issued and outstanding: 292 (2009 and 2008)
    
    
    3
    
    
    
    3Additional paid-in capital
    
    
    10,561
    
    
    
    293,120Net unrealized gain
    
    
    (95
    )
    
    
    267Accumulated deficit
    
    
    (6,184
    )
    
    
    (497,548
    )TOTAL SHAREHOLDERS EQUITY (DEFICIT)
    
    
    4,290
    
    
    
    (203,145
    )TOTAL LIABILITIES, REDEEMABLE PREFERRED
STOCK AND SHAREHOLDERS EQUITY (DEFICIT)
    
    $
    347,056
    
    
    $
    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)
  Successor Company
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months Ended
    
    
    For the Period
    
    
    Six Months EndedApril 24, 2009 to June 30, 2009
    
    
    April 1, 2009 to April 23, 2009
    
    
    June 30, 2008
    
    
    January 1, 2009 to April 23, 2009
    
    
    June 30, 2008NET REVENUE
    
    $
    58,044
    
    
    $
    25,607
    
    
    $
    100,372
    
    
    $
    111,474
    
    
    $
    206,998Operating Costs
    
    
    52,116
    
    
    
    20,187
    
    
    
    85,411
    
    
    
    111,580
    
    
    
    179,640Depreciation and Amortization
    
    
    5,845
    
    
    
    521
    
    
    
    2,421
    
    
    
    2,585
    
    
    
    6,397Corporate General and Administrative Expenses
    
    
    2,407
    
    
    
    1,482
    
    
    
    1,199
    
    
    
    4,248
    
    
    
    4,665Goodwill Impairment
    
    
    
    
    
    
    
    
    
    
    206,053
    
    
    
    
    
    
    
    206,053Restructuring Charges
    
    
    1,454
    
    
    
    536
    
    
    
    
    
    
    
    3,976
    
    
    
    Special Charges
    
    
    368
    
    
    
    7,010
    
    
    
    897
    
    
    
    12,819
    
    
    
    8,85362,190
    
    
    
    29,736
    
    
    
    295,981
    
    
    
    135,208
    
    
    
    405,608OPERATING (LOSS) INCOME
    
    
    (4,146
    )
    
    
    (4,129
    )
    
    
    (195,609
    )
    
    
    (23,734
    )
    
    
    (198,610
    )Interest Expense (Income)
    
    
    4,692
    
    
    
    (41
    )
    
    
    4,352
    
    
    
    3,222
    
    
    
    9,751Other Income
    
    
    (4
    )
    
    
    (59
    )
    
    
    (43
    )
    
    
    (359
    )
    
    
    (85
    )INCOME (LOSS) BEFORE INCOME TAX
    
    
    (8,834
    )
    
    
    (4,029
    )
    
    
    (199,918
    )
    
    
    (26,596
    )
    
    
    (208,276
    )INCOME TAX (BENEFIT) EXPENSE
    
    
    (2,650
    )
    
    
    (254
    )
    
    
    (174
    )
    
    
    (7,635
    )
    
    
    (3,194
    )NET (LOSS) INCOME
    
    $
    (6,184
    )
    
    $
    (3,775
    )
    
    $
    (199,744
    )
    
    $
    (18,961
    )
    
    $
    (205,082
    )NET (LOSS) INCOME attributable to Common Stockholders
    
    $
    (9,595
    )
    
    $
    (5,387
    )
    
    $
    (199,932
    )
    
    $
    (22,037
    )
    
    $
    (205,270
    )(LOSS) EARNINGS PER SHARECOMMON STOCKBASIC
    
    $
    (18.85
    )
    
    $
    (10.67
    )
    
    $
    (396.69
    )
    
    $
    (43.64
    )
    
    $
    (431.24
    )DILUTED
    
    $
    (18.85
    )
    
    $
    (10.67
    )
    
    $
    (396.69
    )
    
    $
    (43.64
    )
    
    $
    (431.24
    )CLASS B STOCKBASIC
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    DILUTED
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    WEIGHTED AVERAGE SHARES OUTSTANDING:COMMON STOCKBASIC
    
    
    509
    
    
    
    505
    
    
    
    504
    
    
    
    505
    
    
    
    476DILUTED
    
    
    509
    
    
    
    505
    
    
    
    504
    
    
    
    505
    
    
    
    476CLASS B STOCK *BASIC
    
    
    292
    
    
    
    292
    
    
    
    292
    
    
    
    292
    
    
    
    292DILUTED
    
    
    292
    
    
    
    292
    
    
    
    292
    
    
    
    292
    
    
    
    292
 
 *
    
    Reverse stock split
not reflected in total. Class B Stock was converted into common
stock prior to effectiveness of reverse stock split.  4




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##### Table of Contents



WESTWOOD ONE, INC.
 
 CONSOLIDATED STATEMENT OF CASH FLOWS
 (In thousands, except share and per share amounts)
  Successor
    

    
    

    
    PredecessorCompany
    
    
    CompanyFor the Period
    
    
    For the Period
    
    
    Six Months EndedApril 24, 2009 to June 30, 2009
    
    
    January 1, 2009 to April 23, 2009
    
    
    June 30, 2008CASH FLOW FROM OPERATING ACTIVITIES:Net (loss)
    
    $
    (6,184
    )
    
    $
    (18,961
    )
    
    $
    (205,082
    )Adjustments to reconcile net (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    5,845
    
    
    
    2,585
    
    
    
    6,397Goodwill impairment
    
    
    
    
    
    
    
    
    
    
    206,053Loss on disposal of property and equipment
    
    
    76
    
    
    
    188Deferred taxes
    
    
    2,162
    
    
    
    (6,874
    )
    
    
    (7,196
    )Non-cash stock compensation
    
    
    852
    
    
    
    2,110
    
    
    
    2,455Amortization of deferred financing costs
    
    
    
    
    
    
    331
    
    
    
    792Net change in assets and liabilities (net of effect of Refinancing):
    
    
    (17,078
    )
    
    
    19,844
    
    
    
    (8,261
    )Net Cash (Used) By Operating Activities
    
    
    (14,327
    )
    
    
    (777
    )
    
    
    (4,842
    )CASH FLOW FROM INVESTING ACTIVITIES:Capital expenditures
    
    
    (1,546
    )
    
    
    (1,384
    )
    
    
    (6,078
    )Net Cash (Used) In Investing Activities
    
    
    (1,546
    )
    
    
    (1,384
    )
    
    
    (6,078
    )CASH FLOW FROM FINANCING ACTIVITIES:Issuance of common stock
    
    
    
    
    
    
    
    
    
    
    22,750Issuance of series A convertible preferred stock and warrants
    
    
    
    
    
    
    
    
    
    
    74,178Issuance of series B converible preferred stock
    
    
    25,000Debt repayments
    
    
    (25,000
    )
    
    
    
    
    
    
    (85,000
    )Payments of capital lease obligations
    
    
    (152
    )
    
    
    (271
    )
    
    
    (343
    )Proceeds from term loan
    
    
    20,000Deferred financing costs
    
    
    
    
    
    
    
    
    
    
    (1,537
    )Net Cash Provided (Used) in Financing Activities
    
    
    19,848
    
    
    
    (271
    )
    
    
    10,048NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    3,975
    
    
    
    (2,432
    )
    
    
    (872
    )CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    4,005
    
    
    
    6,437
    
    
    
    6,187CASH AND
CASH EQUIVALENTS AT END OF PERIOD
    
    $
    7,980
    
    
    $
    4,005
    
    
    $
    5,315Supplemental disclosure of cash flow information:Non-cash
financing activities (1)Cancellation
of long-term debt (2)
    
    
    
    
    
    
    252,060
    
    
    
    Issuance of
new long-term debt (2)
    
    
    117,500
    
    
    
    
    
    
    
    
 
 (1)
  
  All of the Series A Preferred Stock was exchange for all of the
Series A-1 Preferred Stock.(2)
  
  34,962 shares of the Series B Preferred Stock was issued to our
lenders in exchange in part for the cancellation of prior indebtedness.   5




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##### Table of Contents



WESTWOOD ONE, INC
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 (In thousands, except per share amounts)
 Predecessor Company
 Unrealized
    
    
    
    
    
    
    Accumulated(Accumulated
    
    
    Gain(Loss) on
    
    
    Total
    
    
    OtherAdditional
    
    
    Deficit)
    
    
    Available
    
    
    Share-
    
    
    Compre-Common Stock
    
    
    Class B Stock
    
    
    Paid-in
    
    
    Retained
    
    
    for Sale
    
    
    holders
    
    
    hensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Securities
    
    
    Equity
    
    
    (Loss)Balance as of
December 31, 2008
    
    
    101,253
    
    
    $
    1,013
    
    
    
    292
    
    
    $
    3
    
    
    $
    293,120
    
    
    $
    (497,548
    )
    
    $
    267
    
    
    $
    (203,145
    )
    
    $
    (433,251
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,961
    )
    
    
    
    
    
    
    (18,961
    )
    
    
    (18,961
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    219
    
    
    
    219
    
    
    
    219Equity based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,110
    
    
    
    
    
    
    
    
    
    
    
    2,110Issuance common
stock
under equity based
compensation plans
    
    
    777
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    (939
    )
    
    
    
    
    
    
    
    
    
    
    (932
    )Issuance of common
stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Preferred stock
accretion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,157
    )
    
    
    
    
    
    
    
    
    
    
    (6,157
    )Cancellations of
vested
equity grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (890
    )
    
    
    
    
    
    
    
    
    
    
    (890
    )Ending Balance as of
April 23, 2009
    
    
    102,030
    
    
    $
    1,020
    
    
    
    292
    
    
    $
    3
    
    
    $
    287,244
    
    
    $
    (516,509
    )
    
    $
    486
    
    
    $
    (227,756
    )
    
    $
    (451,993
    )
 Successor Company
 Unrealized
    
    
    
    
    
    
    Accumulated(Accumulated
    
    
    Gain(Loss) on
    
    
    Total
    
    
    OtherAdditional
    
    
    Deficit)
    
    
    Available
    
    
    Share-
    
    
    Compre-Common Stock
    
    
    Class B Stock
    
    
    Paid-in
    
    
    Retained
    
    
    for Sale
    
    
    holders
    
    
    hensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Securities
    
    
    Equity
    
    
    (Loss)Revalued Capital
    
    
    510
    
    
    
    5
    
    
    
    292
    
    
    
    3
    
    
    
    2,256
    
    
    
    
    
    
    
    
    
    
    
    2,264Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,184
    )
    
    
    
    
    
    
    (6,184
    )
    
    
    (6,184
    )Comprehensive (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (95
    )
    
    
    (95
    )
    
    
    (95
    )Equity based
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    852
    
    
    
    
    
    
    
    
    
    
    
    852Issuance common
stock under equity
based compensation
plans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19
    )
    
    
    
    
    
    
    
    
    
    
    (19
    )Preferred stock
accretion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,979
    )
    
    
    
    
    
    
    
    
    
    
    (2,979
    )Cancellations of
vested equity
grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    
    
    
    
    (59
    )Beneficial
conversion feature
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,510
    
    
    
    
    
    
    
    
    
    
    
    10,510Balance as of
June 30, 2009
    
    
    510
    
    
    
    5
    
    
    
    292
    
    
    
    3
    
    
    
    10,561
    
    
    
    (6,184
    )
    
    
    (95
    )
    
    
    4,290
    
    
    
    (6,279
    )
   6




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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:
        7




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
   Current Assets
    
    $
    104,641Goodwill
    
    
    86,414Intangibles
    
    
    116,910Property, Plant and Equipment, Net
    
    
    36,270Other Assets
    
    
    21,913Current Liabilities
    
    
    81,160Deferred Income Taxes
    
    
    77,879Due to Gores
    
    
    10,797Other Liabilities
    
    
    10,458Long-term Debt
    
    
    106,703Total Business Enterprise Value
    
    $
    79,151
   Unaudited Pro FormaThree Months ended June 30,
    
    
    Six Months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenue
    
    $
    83,651
    
    
    $
    100,372
    
    
    $
    169,518
    
    
    $
    206,998Net Loss
    
    
    (15,275
    )
    
    
    (209,013
    )
    
    
    (35,589
    )
    
    
    (222,258
    )EPS
    
    $
    (0.75
    )
    
    $
    (10.29
    )
    
    $
    (1.75
    )
    
    $
    (10.94
    )
  8




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
  NOTE 2 Earnings Per Share:
       9




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 Successor Company
    
    

    
    

    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Net (Losses) Income
    
    $
    (6,184
    )
    
    $
    (3,775
    )
    
    $
    (199,744
    )
    
    $
    (18,961
    )
    
    $
    (205,082
    )Less:
Accumulated Preferred Stock dividends and accretion
    
    
    (3,411
    )
    
    
    (1,612
    )
    
    
    (188
    )
    
    
    (3,076
    )
    
    
    (188
    )Less: distributed earnings to common stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Less: distributed earnings to Class B stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Undistributed earnings
    
    $
    (9,595
    )
    
    $
    (5,387
    )
    
    $
    (199,932
    )
    
    $
    (22,037
    )
    
    $
    (205,270
    )Earnings  common stockBasicDistributed earnings to common stockholders
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Undistributed earnings allocated to common stockholders
    
    
    (9,595
    )
    
    
    (5,387
    )
    
    
    (199,932
    )
    
    
    (22,037
    )
    
    
    (205,270
    )Total Earnings  common stock, basic
    
    $
    (9,595
    )
    
    $
    (5,387
    )
    
    $
    (199,932
    )
    
    $
    (22,037
    )
    
    $
    (205,270
    )DilutedDistributed earnings to common stockholders
    
    
    
    
    
    
    
    
    
    $
    Distributed earnings to Class B stockholders
    
    
    
    
    
    
    
    
    
    
    Undistributed earnings allocated to common stockholders
    
    
    (9,595
    )
    
    
    (5,387
    )
    
    
    (199,932
    )
    
    
    (22,037
    )
    
    
    (205,270
    )Total Earnings  common stock, diluted
    
    $
    (9,595
    )
    
    $
    (5,387
    )
    
    $
    (199,932
    )
    
    $
    (22,037
    )
    
    $
    (205,270
    )Weighted average common shares outstanding, basicShare-based compensation
    
    
    509
    
    
    
    505
    
    
    
    504
    
    
    
    505
    
    
    
    476Warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average Class B shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average common shares outstanding, diluted
    
    
    509
    
    
    
    505
    
    
    
    504
    
    
    
    505
    
    
    
    476(Loss) Earnings per common share, basicDistributed earnings, basic
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Undistributed earnings  basic
    
    
    (18.85
    )
    
    
    (10.67
    )
    
    
    (396.69
    )
    
    
    (43.64
    )
    
    
    (431.24
    )Total
    
    $
    (18.85
    )
    
    $
    (10.67
    )
    
    $
    (396.69
    )
    
    $
    (43.64
    )
    
    $
    (431.24
    )(Loss) Earnings per common share, dilutedDistributed earnings, diluted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Undistributed earnings  diluted
    
    
    (18.85
    )
    
    
    (10.67
    )
    
    
    (396.69
    )
    
    
    (43.64
    )
    
    
    (431.24
    )Total
    
    $
    (18.85
    )
    
    $
    (10.67
    )
    
    $
    (396.69
    )
    
    $
    (43.64
    )
    
    $
    (431.24
    )Earnings per share  Class B StockBasicDistributed earnings to Class B stockholders
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Undistributed earnings allocated to Class B stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Earnings  Class B Stock, basic
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    DilutedDistributed earnings to Class B stockholders
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Undistributed earnings allocated to Class B stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total Earnings  Class B Stock, diluted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Weighted average Class B shares outstanding, basic
    
    
    292
    
    
    
    292
    
    
    
    292
    
    
    
    292
    
    
    
    292Share-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted average Class B shares outstanding, diluted
    
    
    292
    
    
    
    292
    
    
    
    292
    
    
    
    292
    
    
    
    292Earnings per Class B share, basicDistributed earnings, basic
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Undistributed earnings  basic
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Earnings per Class B share, dilutedDistributed earnings, diluted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Undistributed earnings  diluted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  10




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 3 Related Party Transactions:
   Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Representation Agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,583News Agreement
    
    
    2,502
    
    
    
    859
    
    
    
    3,247
    
    
    
    4,107
    
    
    
    6,362Programming and Affiliate Arrangements
    
    
    9,689
    
    
    
    4,112
    
    
    
    15,198
    
    
    
    20,884
    
    
    
    27,375Consulting Fees
    
    
    296
    
    
    
    804
    
    
    
    
    
    
    
    2,517Management Agreement
(excluding warrant amortization)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    610Warrant Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,618Payment upon closing
of Master Agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,00012,487
    
    
    
    5,775
    
    
    
    18,445
    
    
    
    27,508
    
    
    
    43,548
   11




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 Gores Radio Holdings
   Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Consultancy and Advisory Fees
    
    
    
    
    
    
    470
    
    
    
    
    
    
    
    1,533
    
    
    
    Gores Radio Holdings, LLC
    
    
    
    
    
    
    230
    
    
    
    
    
    
    
    230Glendon Partners Fees
    
    
    296
    
    
    
    104
    
    
    
    
    
    
    
    754
    
    
    
    296
    
    
    
    804
    
    
    
    
    
    
    
    2,517
    
    
    
    
 POP Radio
  Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Program commission expense
    
    
    248
    
    
    
    85
    
    
    
    453
    
    
    
    416
    
    
    
    1,180248
    
    
    
    85
    
    
    
    453
    
    
    
    416
    
    
    
    1,180
  Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Operating Costs
    
    
    12,191
    
    
    
    4,971
    
    
    
    18,445
    
    
    
    24,991
    
    
    
    36,320Depreciation and Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,618Corporate, General and Administrative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    610Special Charges
    
    
    296
    
    
    
    804
    
    
    
    
    
    
    
    2,517
    
    
    
    5,00012,487
    
    
    
    5,775
    
    
    
    18,445
    
    
    
    27,508
    
    
    
    43,548
  12




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 4 Property and Equipment:
  Successor Company
    
    
    
    
    Predecessor CompanyJune 30, 2009
    
    
    December 31, 20082009
    
    
    2008Land, buildings and improvements
    
    $
    18,397
    
    
    $
    11,999Recording, broadcasting and studio equipment
    
    
    73,761
    
    
    
    75,907Furniture, equipment and other
    
    
    18,116
    
    
    
    18,445$
    110,274
    
    
    $
    106,351Less: Accumulated depreciation
    
    
    73,917
    
    
    
    75,934Property and equipment, net
    
    $
    36,357
    
    
    $
    30,417
  Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Depreciation Expense
    
    
    1,322
    
    
    
    474
    
    
    
    2,225
    
    
    
    2,354
    
    
    
    4,3881,322
    
    
    
    474
    
    
    
    2,225
    
    
    
    2,354
    
    
    
    4,388
  NOTE 5 Goodwill
    13




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
   Total
    
    
    Metro
    
    
    NetworkPredecessor Company
    
    
    33,988
    
    
    
    23,792
    
    
    
    10,196Goodwill, April 23, 2009
    
    $
    33,988
    
    
    $
    23,792
    
    
    $
    10,196Successor Company
    
    
    86,414
    
    
    
    61,354
    
    
    
    25,060Goodwill, June 30, 2009
    
    $
    86,414
    
    
    $
    61,354
    
    
    $
    25,060
 NOTE 6 Intangibles
   14




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsEstimated
    
    April 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    EndedLife
    
    to June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Trademarks
    
    Indefinite
    
    
    20,900
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Affiliate Relationships
    
    10 years
    
    
    72,100
    
    
    
    2,477
    
    
    
    3,211
    
    
    
    2,661
    
    
    
    3,395Internally Developed Software
    
    5 years
    
    
    5,600Client Contracts
    
    5 years
    
    
    8,930Leases
    
    7 years
    
    
    980Insertion Orders
    
    9 months
    
    
    8,400Opening Balance
    
    
    
    
    116,910
    
    
    
    2,477
    
    
    
    3,211
    
    
    
    2,661
    
    
    
    3,395Amortization Expense
    
    
    
    
    4,878
    
    
    
    47
    
    
    
    184
    
    
    
    231
    
    
    
    368Ending Balance
    
    
    
    
    112,032
    
    
    
    2,430
    
    
    
    3,027
    
    
    
    2,430
    
    
    
    3,027
 NOTE 7 Acquisitions and Investments:
 TrafficLand
   NOTE 8 Debt:
   15




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
      Successor Company
    
    
    
    
    Predecessor CompanyJune 30, 2009
    
    
    December 31, 2008Revolving Credit Facility/Term Loan
    
    $
    20,000
    (1)
    
    $
    41,0004.64% Senior Notes
due on November 30, 2009
    
    
    
    
    
    
    51,47515.0% Senior Secured Notes
due on July 15, 2012
    
    
    108,078
    (2)
    
    
    Due to Gores
due on July 15, 2012
    
    
    10,891
     (2)
    
    
    5.26% Senior Notes
due on November 30, 2012
    
    
    
    
    
    
    154,503Deferred Derivative Gain
    
    
    
    
    
    
    2,075$
    138,969
    
    
    $
    249,053
 
 (1)
    
    Interest rate of 7.0% on
Term Loan.(2)
    
    Includes 5.0% PIK interest which accrues on a quarterly basis   16




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
    Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Weighted Average Interest Rate
    
    
    13.0
    %
    
    
    4.2
    %
    
    
    3.8
    %
    
    
    6.6
    %
    
    
    5.2
    %
 NOTE 9 Fair Value Measurements:
 Fair Value of Financial Instruments
  June 30, 2009
    
    
    December 31, 2008Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairAmount
    
    
    Value
    
    
    Amount
    
    
    ValueBorrowings (Short and Long Term)
    
    
    138,969
    
    
    
    137,500
    
    
    
    249,053
    
    
    
    158,100Series A Preferred Stock
    
    
    
    
    
    
    
    
    
    
    75,000
    
    
    
    50,000Series A-1 Preferred Stock
    
    
    38,880
    
    
    
    43,071
    
    
    
    
    
    
    
    Series B Preferred Stock
    
    
    30,476
    
    
    
    33,817
    
    
    
    
    
    
    
    
  17




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
    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.
   18




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 Items Measured at Fair Value on a Recurring Basis
  Level 1
    
    
    Level 2
    
    
    Level 3Assets:Investments
    
    $
    634
    
    
    $
    
    
    
    $
    Total Assets
    
    $
    634
    
    
    $
    
    
    
    $
    
 NOTE 10 Shareholders Equity and Preferred Stock:
          19




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 11 Equity-Based Compensation:
 Equity Compensation Activity
   WeightedAverageShares
    
    
    PricePredecessor CompanyUnvested at December 31, 2008
    
    
    7,000
    
    
    $
    7.58Granted January 1 to April 23, 2009
    
    
    75
    
    
    
    0.06Forfeited January 1 to April 23, 2009
    
    
    (667
    )
    
    
    9.3Unvested at April 23, 2009
    
    
    6,408
    
    
    
    7.32Successor CompanyUnvested at April 24, 2009
    
    
    6,408
    
    
    $
    7.32Granted April 24 to June 30, 2009
    
    
    
    
    
    
    Forfeited April 24 to June 30, 2009
    
    
    (232
    )
    
    
    3.39Unvested at June 30, 2009
    
    
    6,176
    
    
    
    7.47
  Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Operating Costs
    
    
    732
    
    
    
    218
    
    
    
    1,217
    
    
    
    1,136
    
    
    
    2,371General and Administrative Expense
    
    
    120
    
    
    
    540
    
    
    
    (885
    )
    
    
    974
    
    
    
    84Total Stock Compensation Expense
    
    
    852
    
    
    
    758
    
    
    
    332
    
    
    
    2,110
    
    
    
    2,455
  20




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##### Table of Contents



WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
  Successor Company
    
    
    
    
    Predecessor CompanyJune 30,
    
    
    December 31,2009
    
    
    2008Options
    
    
    6,176
    
    
    
    7,000Restricted Stock
    
    
    179
    
    
    
    364Restricted Stock Units
    
    
    440
    
    
    
    1,216Warrants
    
    
    10,000
    
    
    
    10,00016,795
    
    
    
    18,580
    NOTE 12 Other Income/(Loss):
 Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Other Income
    
    
    4
    
    
    
    59
    
    
    
    43
    
    
    
    359
    
    
    
    85
 NOTE 13 Comprehensive Income (Loss):
  Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Net (loss) Income
    
    $
    (6,184
    )
    
    $
    (3,775
    )
    
    $
    (199,744
    )
    
    $
    (18,961
    )
    
    $
    (205,082
    )Unrealized gain (loss) on marketable securities, net of income taxes
    
    
    (95
    )
    
    
    85
    
    
    
    48
    
    
    
    219
    
    
    
    2,596Comprehensive (loss) Income
    
    $
    (6,279
    )
    
    $
    (3,690
    )
    
    $
    (199,696
    )
    
    $
    (18,742
    )
    
    $
    (202,486
    )
  21




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 14 Income Taxes:
       22




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 15 Restructuring Charges:
    FacilitiesSeverance
    
    
    Consolidation
    
    
    ContractTermination Costs
    
    
    Related Costs
    
    
    Termination Costs
    
    
    TotalAcitivty Thru December 31, 2008Charges
    
    
    6,765
    
    
    
    831
    
    
    
    6,504
    
    
    
    14,100Payments
    
    
    (3,487
    )
    
    
    (41
    )
    
    
    (1,108
    )
    
    
    (4,636
    )Non-Cash utilization
    
    
    (80
    )
    
    
    
    
    
    
    (1,600
    )
    
    
    (1,680
    )Balance at December 31, 2008
    
    
    3,198
    
    
    
    790
    
    
    
    3,796
    
    
    
    7,784Charges from
January 1 to March 31, 2009
    
    
    1,658
    
    
    
    1,781
    
    
    
    
    
    
    
    3,439Charges from April 1 to April 23, 2009
    
    
    
    
    
    
    536
    
    
    
    
    
    
    
    536Charges from April 24 to June 30, 2009
    
    
    372
    
    
    
    1,082
    
    
    
    
    
    
    
    1,454Payments
    
    
    (2,971
    )
    
    
    (361
    )
    
    
    (1,400
    )
    
    
    (4,732
    )Non-Cash utilization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance at June 30, 2009
    
    
    2,257
    
    
    
    3,828
    
    
    
    2,396
    
    
    
    8,481Accumulated Charges
    
    
    8,795
    
    
    
    4,230
    
    
    
    6,504
    
    
    
    19,529Accumulated Payments
    
    
    (6,458
    )
    
    
    (402
    )
    
    
    (2,508
    )
    
    
    (9,368
    )Accumulated Non-Cash utilization
    
    
    (80
    )
    
    
    
    
    
    
    (1,600
    )
    
    
    (1,680
    )Balance at June 30, 2009
    
    
    2,257
    
    
    
    3,828
    
    
    
    2,396
    
    
    
    8,481
    23




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 16 Special Charges:
  Successor Company
    
    
    
    
    Predecessor CompanyFor the Period
    
    
    For the Period
    
    
    Three Months
    
    
    For the Period
    
    
    Six MonthsApril 24, 2009
    
    
    April 1, 2009
    
    
    Ended
    
    
    January 1, 2009
    
    
    Endedto June 30, 2009
    
    
    to April 23, 2009
    
    
    June 30, 2008
    
    
    to April 23, 2009
    
    
    June 30, 2008Professional fees related to the new
CBS arrangement
    
    
    
    
    
    
    
    
    
    
    206
    
    
    
    
    
    
    
    3,162Closing payment to CBS related to cancelling
the previous CBS agreement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000Regionalization costs
    
    
    72
    
    
    
    25
    
    
    
    
    
    
    
    120
    
    
    
    Fees related to the Refinancing
    
    
    296
    
    
    
    6,985
    
    
    
    691
    
    
    
    12,699
    
    
    
    691$
    368
    
    
    $
    7,010
    
    
    $
    897
    
    
    $
    12,819
    
    
    $
    8,853
  NOTE 17 Segment Information:
      24




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 Successor Company
    
    
    
    
    Predecessor CompanyFor the period
    
    
    For the period
    
    
    Three Months
    
    
    For the period
    
    
    Six MonthsApril 24 to June 30
    
    
    April 1 to April 23
    
    
    Ended
    
    
    January 1 to April 23
    
    
    Ended2009
    
    
    2009
    
    
    June 30, 2008
    
    
    2009
    
    
    June 30, 2008Net RevenueNetwork
    
    $
    27,351
    
    
    $
    12,812
    
    
    $
    47,169
    
    
    $
    63,996
    
    
    $
    106,353Metro/Traffic
    
    
    30,693
    
    
    
    12,796
    
    
    
    53,203
    
    
    
    47,479
    
    
    
    100,645Total Net Revenue
    
    $
    58,044
    
    
    $
    25,607
    
    
    $
    100,372
    
    
    $
    111,474
    
    
    $
    206,998Segment Operating (Loss) IncomeNetwork
    
    $
    358
    
    
    $
    647
    
    
    $
    4,048
    
    
    $
    (3,818
    )
    
    $
    12,121Metro/Traffic
    
    
    (2,622
    )
    
    
    3,419
    
    
    
    10,088
    
    
    
    (2,093
    )
    
    
    13,423Total Segment Operating (Loss) Income
    
    $
    (2,264
    )
    
    $
    4,066
    
    
    $
    14,136
    
    
    $
    (5,911
    )
    
    $
    25,544Corporate Expenses
    
    
    (60
    )
    
    
    (649
    )
    
    
    (2,795
    )
    
    
    (1,027
    )
    
    
    (9,248
    )Restructuring and Special Charges
    
    
    (1,822
    )
    
    
    (7,546
    )
    
    
    (897
    )
    
    
    (16,795
    )
    
    
    (8,853
    )Goodwill Impairment
    
    
    
    
    
    
    
    
    
    
    (206,053
    )
    
    
    
    
    
    
    (206,053
    )Operating (Loss) Income
    
    $
    (4,146
    )
    
    $
    (4,129
    )
    
    $
    (195,609
    )
    
    $
    (23,733
    )
    
    $
    (198,610
    )Interest Expense (Income)
    
    
    (4,692
    )
    
    
    41
    
    
    
    (4,352
    )
    
    
    (3,222
    )
    
    
    (9,751
    )Other Income
    
    
    4
    
    
    
    59
    
    
    
    43
    
    
    
    359
    
    
    
    85(Loss) Income Before Income Taxes
    
    $
    (8,834
    )
    
    $
    (4,029
    )
    
    $
    (199,918
    )
    
    $
    (26,596
    )
    
    $
    (208,276
    )Depreciation and AmortizationNetwork
    
    $
    1,483
    
    
    $
    225
    
    
    $
    834
    
    
    $
    1,096
    
    
    $
    1,590Metro/Traffic
    
    
    4,357
    
    
    
    295
    
    
    
    1,580
    
    
    
    1,480
    
    
    
    3,176Corporate
    
    
    5
    
    
    
    1
    
    
    
    7
    
    
    
    9
    
    
    
    1,631Total Depreciation and Amortization
    
    $
    5,845
    
    
    $
    521
    
    
    $
    2,421
    
    
    $
    2,585
    
    
    $
    6,397Capital ExpendituresNetwork
    
    $
    993
    
    
    $
    12
    
    
    $
    2,109
    
    
    $
    506
    
    
    $
    5,474Metro/Traffic
    
    
    553
    
    
    
    204
    
    
    
    203
    
    
    
    879
    
    
    
    502Corporate
    
    
    
    
    
    
    
    
    
    
    133
    
    
    
    
    
    
    
    132Total Capital Expenditures
    
    $
    1,546
    
    
    $
    216
    
    
    $
    2,445
    
    
    $
    1,385
    
    
    $
    6,109
 Successor Company
    
    
    
    
    Predecessor CompanyJune 30,
    
    
    December 31,2009
    
    
    2008AssetsNetwork
    
    $
    121,998
    
    
    $
    92,109Metro/Traffic
    
    
    202,879
    
    
    
    80,079Corporate
    
    
    22,179
    
    
    
    32,900Total Assets (1)
    
    $
    347,056
    
    
    $
    205,088
  25




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
 NOTE 18 Subsequent Events:
      NOTE 19 Recent Accounting Pronouncements:
   26




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
       27




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WESTWOOD ONE, INC.  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (in thousands, except per share amounts)
    28




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(In thousands except per share amounts)
 EXECUTIVE OVERVIEW
        29




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30




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31




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Successor Company
    
    
    
    
    Predecessor Company
    
    
    Combined TotalFor the threeFor the Period
    
    
    For the Period
    
    
    months endedApril 24, 2009 to June 30, 2009
    
    
    April 1, 2009 to April 23, 2009
    
    
    June 30,2009NET REVENUE
    
    $
    58,044
    
    
    $
    25,607
    
    
    $
    83,651Operating Costs
    
    
    52,116
    
    
    
    20,187
    
    
    
    72,303Depreciation and Amortization
    
    
    5,845
    
    
    
    521
    
    
    
    6,366Corporate General and Administrative Expenses
    
    
    2,407
    
    
    
    1,482
    
    
    
    3,889Restructuring Charges
    
    
    1,454
    
    
    
    536
    
    
    
    1,990Special Charges
    
    
    368
    
    
    
    7,010
    
    
    
    7,37862,190
    
    
    
    29,736
    
    
    
    91,926OPERATING (LOSS)
    
    
    (4,146
    )
    
    
    (4,129
    )
    
    
    (8,275
    )Interest Expense (Income)
    
    
    4,692
    
    
    
    (41
    )
    
    
    4,651Other Income
    
    
    (4
    )
    
    
    (59
    )
    
    
    (63
    )(LOSS) BEFORE INCOME TAX
    
    
    (8,834
    )
    
    
    (4,029
    )
    
    
    (12,863
    )INCOME TAX (BENEFIT)
    
    
    (2,650
    )
    
    
    (254
    )
    
    
    (2,904
    )NET (LOSS)
    
    $
    (6,184
    )
    
    $
    (3,775
    )
    
    $
    (9,959
    )
 Successor Company
    
    
    
    
    Predecessor Company
    
    
    Combined TotalFor the sixFor the Period
    
    
    For the Period
    
    
    months endedApril 24, 2009 to June 30, 2009
    
    
    January 1, 2009 to April 23, 2009
    
    
    June 30,2009NET REVENUE
    
    $
    58,044
    
    
    $
    111,474
    
    
    $
    169,518Operating Costs
    
    
    52,116
    
    
    
    111,580
    
    
    
    163,696Depreciation and Amortization
    
    
    5,845
    
    
    
    2,585
    
    
    
    8,430Corporate General and Administrative Expenses
    
    
    2,407
    
    
    
    4,248
    
    
    
    6,655Restructuring Charges
    
    
    1,454
    
    
    
    3,976
    
    
    
    5,430Special Charges
    
    
    368
    
    
    
    12,819
    
    
    
    13,18762,190
    
    
    
    135,208
    
    
    
    197,398OPERATING (LOSS)
    
    
    (4,146
    )
    
    
    (23,734
    )
    
    
    (27,880
    )Interest Expense (Income)
    
    
    4,692
    
    
    
    3,222
    
    
    
    7,914Other Income
    
    
    (4
    )
    
    
    (359
    )
    
    
    (363
    )(LOSS) BEFORE INCOME TAX
    
    
    (8,834
    )
    
    
    (26,596
    )
    
    
    (35,430
    )INCOME TAX (BENEFIT)
    
    
    (2,650
    )
    
    
    (7,635
    )
    
    
    (10,285
    )NET (LOSS)
    
    $
    (6,184
    )
    
    $
    (18,961
    )
    
    $
    (25,145
    )
  32




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Results of Operations
  Combined Three Months Ended June 30, 2009 Compared With Three Months Ended June 30, 2008
 Revenue
  Three Months endedJune 30, 2009
    
    
    June 30, 2008$
    
    
    % of Total
    
    
    $
    
    
    % of TotalMetro
    
    
    43,487
    
    
    
    52
    %
    
    
    53,203
    
    
    
    53
    %Network
    
    
    40,164
    
    
    
    48
    %
    
    
    47,169
    
    
    
    47
    %Total (1)
    
    $
    83,651
    
    
    
    100
    %
    
    $
    100,372
    
    
    
    100
    %
     33




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##### Table of Contents



Operating Costs
  Three Months endedJune 30, 2009
    
    
    June 30, 2008$
    
    
    % of Total
    
    
    $
    
    
    % of TotalPayroll and payroll related
    
    
    20,392
    
    
    
    28
    %
    
    
    25,522
    
    
    
    30
    %Programming and production
    
    
    14,394
    
    
    
    20
    %
    
    
    18,489
    
    
    
    22
    %Program and operating
    
    
    6,715
    
    
    
    9
    %
    
    
    4,116
    
    
    
    5
    %Station compensation
    
    
    18,334
    
    
    
    25
    %
    
    
    20,748
    
    
    
    24
    %Other operating expenses
    
    
    12,468
    
    
    
    18
    %
    
    
    16,536
    
    
    
    19
    %$
    72,303
    
    
    
    100
    %
    
    $
    85,411
    
    
    
    100
    %
  Depreciation and Amortization
  Corporate General and Administrative Expenses
   34




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##### Table of Contents



Goodwill Impairment
  Restructuring Charges
  Special Charges
  Operating (Loss)
  Interest Expense
  Provision for Income Taxes
   35




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##### Table of Contents



Net (Loss)
  Combined Six Months Ended June 30, 2009 Compared With Six Months Ended June 30, 2008
 Revenue
  Six Months endedJune 30, 2009
    
    
    June 30, 2008$
    
    
    % of Total
    
    
    $
    
    
    % of TotalMetro
    
    
    78,171
    
    
    
    46
    %
    
    
    100,645
    
    
    
    49
    %Network
    
    
    91,347
    
    
    
    54
    %
    
    
    106,353
    
    
    
    51
    %Total (1)
    
    $
    169,518
    
    
    
    100
    %
    
    $
    206,998
    
    
    
    100
    %
    Operating Costs
  Six Months endedJune 30, 2009
    
    
    June 30, 2008$
    
    
    % of Total
    
    
    $
    
    
    % of TotalPayroll and payroll related
    
    
    42,503
    
    
    
    26
    %
    
    
    51,767
    
    
    
    29
    %Programming and production
    
    
    43,199
    
    
    
    26
    %
    
    
    47,154
    
    
    
    26
    %Program and operating
    
    
    11,285
    
    
    
    7
    %
    
    
    8,283
    
    
    
    5
    %Station compensation
    
    
    38,103
    
    
    
    23
    %
    
    
    39,886
    
    
    
    22
    %Other operating expenses
    
    
    28,606
    
    
    
    18
    %
    
    
    32,550
    
    
    
    18
    %$
    163,696
    
    
    
    100
    %
    
    $
    179,640
    
    
    
    100
    %
  36




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##### Table of Contents



%,
 Depreciation and Amortization
  Corporate General and Administrative Expenses
  Goodwill Impairment
  Restructuring Charges
  Special Charges
   37




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##### Table of Contents



Operating (Loss)
  Interest Expense
  Provision for Income Taxes
  Net (Loss) Income
  Liquidity and Capital Resources
  Existing Indebtedness
   38




---



##### Table of Contents



Indebtedness prior to April 23, 2009
      39




---



##### Table of Contents



Current Position
     Recent Accounting Pronouncements
     40




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##### Table of Contents



Cautionary Statement Concerning Forward-Looking Statements and Factors Affecting Forward-Looking
Statements
   41




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##### Table of Contents



Risks Related to Our Business
 Deterioration in general economic conditions and constrained consumer spending has caused, and
could cause, additional decreases or delays in advertising spending, could harm our ability to
generate advertising revenue and negatively affect our results of operations.
  Our operating income has declined since 2002 and may continue to decline. We may not be able to
reverse this trend or reduce costs sufficiently to offset declines in revenue if such trends
continue.
  CBS Radio provides us with a significant portion of our commercial inventory and audience that we
sell to advertisers. A material reduction in the audience delivered by CBS Radio stations or a
material loss of commercial inventory from CBS Radio would have an adverse effect on our
advertising sales and financial results.
 TM TM TM
  42




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##### Table of Contents



We may not realize expected benefits from our cost cutting initiatives.
  Our ability to increase our revenue is significantly dependent on advertising rates, which rates
could be negatively impacted by the introduction of The Portable People Meter.
 TM TM TM TM TM TM
 Our ability to grow our Metro business revenue may be adversely affected by the increased
proliferation of free of charge traffic content to consumers.
  We may require additional financing to fund our working capital, debt service, capital expenditures
or other capital requirements and the ongoing global credit market disruptions have reduced access
to credit and created higher costs of obtaining financing.
   43




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##### Table of Contents



We have a significant amount of indebtedness, which could adversely affect our liquidity and future
business operations if our operating income declines more than we currently anticipate.
  Our failure to obtain or retain the rights in popular programming could adversely affect our
revenue.
  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.
   44




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##### Table of Contents



Our Senior Credit Facility and 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.
  
    
    restrictions 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 (expressed as the principal amount of New Senior Notes
over our consolidated EBITDA (as defined in our New Senior Credit Facility) measured on a
trailing, four-quarter basis) which is 6.25 to 1.0 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.
  The cost of our indebtedness has increased substantially, which, when combined with our recent
declining revenue, further affects our liquidity and could limit our ability to implement our
business plan and respond competitively
   45




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##### Table of Contents



If we are not able to integrate future acquisitions successfully, our operating results could be
harmed.
  
    
    difficulties in integrating and managing the operations, technologies and products of
the companies we acquire;
    
    diversion of our managements attention from normal daily operations of our business;
    
    our inability to maintain the key business relationships and reputations of the
businesses we acquire;
    
    uncertainty of entry into markets in which we have limited or no prior experience or in
which competitors have stronger market positions;
    
    our dependence on unfamiliar affiliates and partners of the companies we acquire;
    
    insufficient revenue to offset our increased expenses associated with the acquisitions;
    
    our responsibility for the liabilities of the businesses we acquire; and
    
    potential loss of key employees of the companies we acquire.
 Our success is dependent upon audience acceptance of our content, particularly our radio programs,
which is difficult to predict.
  Continued consolidation in the radio broadcast industry could adversely affect our operating
results
 e.g.,
  46




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##### Table of Contents



We may be required to recognize further impairment charges
  Risks Relating to Our Common Stock
 Our common stock may not maintain an active trading market or list on a nationally recognized
exchange which could affect the liquidity and market price of our common stock.
  Sales of additional shares of common stock by Gores or our other lenders could adversely affect the
stock price.
   47




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##### Table of Contents



Gores will be able to exert significant influence over us and our significant corporate decisions
and may act in a manner that advances its best interest and not necessarily those of other
stockholders.
  
    
    delaying, deferring or preventing a change in control;
    
    impeding a merger, consolidation, takeover or other business combination;
    
    discouraging a potential acquirer from making a tender offer or otherwise attempting to
obtain control; or
    
    causing us to enter into transactions or agreements that are not in the best interests
of all stockholders.
 Provisions in our restated certificate of incorporation and by-laws and Delaware law may
discourage, delay or prevent a change of control of our company or changes in our management and,
therefore, depress the trading price of our common stock.
   We do not anticipate paying dividends on our common stock.
  Any issuance of shares of preferred stock by us could delay or prevent a change of control of our
company, dilute the voting power of the common stockholders and adversely affect the value of our
common stock.
     48




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures about Market Risk
 (fixed-to-floating
 short-term
  
 Item 4. Controls and Procedures
   49




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##### Table of Contents



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)4/1/09  4/30/09
    
    
    
    
    
    
    N/A5/1/09  5/31/09
    
    
    
    
    
    
    N/A6/1/09  6/30/09
    
    
    
    
    
    
    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. 
 Item 3. Defaults Upon Senior Securities
   50




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Changes to Director Nomination Procedures
  
 Item 6. Exhibits
 ExhibitNumber (A)
    
    Description of Exhibit3.1
    
    
    Restated Certificate of Incorporation, as filed with the Secretary of the State of Delaware. (1)3.1.1
    *
    
    Certificate of Amendment to the Restated Certificate of Incorporation of Westwood One, Inc., as filed with the Secretary of
the State of Delaware on August 3, 2009.3.2
    
    
    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)4.3
    
    
    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
    *
    
    Option Agreement, dated as of December 22, 2008, by and between Registrant and by and among Westwood One, Inc., TLAC, Inc.,
TrafficLand, Inc. and P. Richard Zitelman, in his capacity as
Stockholder Representative, as amended.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.  51




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##### Table of Contents



(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.  52




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##### Table of Contents



SIGNATURES
  WESTWOOD ONE, INC.By:
    /s/ Roderick M. Sherwood IIIName:
    Roderick M. Sherwood IIITitle:
    President and CFODate: August 14, 2009  53




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber (A)
    
    Description of Exhibit3.1.1
    *
    
    Certificate of Amendment to the Restated Certificate of Incorporation of Westwood One,
Inc., as filed with the Secretary of the State of Delaware on August 3, 2009.10.1
    *
    

    Option Agreement, dated as of December 22, 2008, by and between Registrant and by and
among Westwood One, Inc., TLAC, Inc., TrafficLand, Inc. and P. Richard Zitelman, in his
capacity as Stockholder Representative, as amended.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.  54