##### Table of Contents



UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
      FORM 10-K
  þ

Annual Report Pursuant to
    Section 13 or 15(d) of the Securities Exchange Act of 1934For the fiscal year ended
    December 31, 2006oro

Transition Report Pursuant to
    Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period
    from          to    Arbitron Inc.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

52-0278528(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer Identification
    No.)   142 West 57th Street
 New York, New York 10019
 (Address of principal executive
    offices) (Zip Code)
  (212) 887-1300
 (Registrants telephone
    number, including area code)
         Title of Each Class Registered

Name of Each Exchange on Which RegisteredCommon Stock, par value
    $0.50 per share

New York Stock
    Exchange    None
   þ o
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE




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##### Table of Contents



TABLE OF
    CONTENTS
  
  Page No.FORWARD-LOOKING
    STATEMENTS


5PART IITEM 1.


BUSINESS


6Overview


6Industry
    Background and Markets


7Radio
    Audience Measurement Services


8Software
    Applications


14Local
    Market Consumer Information Services


14Arbitron
    Cable Services


16Arbitron
    Out-of-Home
    Services


16Custom
    Research Services


16International
    Operations


16Arbitron
    Corporate Strategy


17Customers,
    Sales and Marketing


17Competition


19Intellectual
    Property


19Research
    and Development


20Governmental
    Regulation


20Employees


21Seasonality


21Available
    Information


21ITEM 1A.


RISK
    FACTORS


22ITEM 1B.


UNRESOLVED STAFF
    COMMENTS


30ITEM 2.


PROPERTIES


30ITEM 3.


LEGAL
    PROCEEDINGS


30ITEM 4.


SUBMISSION OF
    MATTERS TO A VOTE OF SECURITY HOLDERS


31PART IIITEM 5.


MARKET FOR
    REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
    ISSUER PURCHASES OF EQUITY SECURITIES


31ITEM 6.


SELECTED
    FINANCIAL DATA


31ITEM 7.


MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS


32Overview


32Known
    Trends that Management Considers Material


33Response
    Rates and Sample Proportionality


33Forward
    Looking Statements


34Stock
    Repurchase


34Critical
    Accounting Policies and Estimates


34Results
    of Operations


35Liquidity
    and Capital Resources


41Off-Balance
    Sheet Arrangements


44New
    Accounting Pronouncements


44 2




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Page No.ITEM 7A.


QUANTITATIVE AND
    QUALITATIVE DISCLOSURES ABOUT MARKET RISK


45Interest
    Rate Risk


45Foreign
    Currency Risk


45ITEM 8.


FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA


45ITEM 9.


CHANGES IN AND
    DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
    DISCLOSURE


79ITEM 9A.


CONTROLS AND
    PROCEDURES


79Evaluation
    of Disclosure Controls and Procedures


79Managements
    Report on Internal Control Over Financial Reporting


79Changes
    in Internal Control Over Financial Reporting


79ITEM 9B.


OTHER
    INFORMATION


79PART IIIITEM 10.


DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


79ITEM 11.


EXECUTIVE
    COMPENSATION


80ITEM 12.


SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS


80ITEM 13.


CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE


80ITEM 14.


PRINCIPAL
    ACCOUNTANT FEES AND SERVICES


81PART IVITEM 15.


EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES


81SIGNATURES


85EX-4.3EX-10.36EX-21EX-23EX-24EX-31.1EX-31.2EX-32.1   3




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Arbitrendssm ® RADAR ® Tapscan ® Tapscan WorldWide ® LocalMotion®,
    Maximi$er®,
    Maximi$er®Plus Arbitron PD
    Advantage ® SmartPlus® Arbitron Portable People
    Meter tm Marketing Resources
    Plus®,
    MRPsm PrintPlustm MapMAKER
    Direct sm Media
    Professional ® ,
    Media Professional
    Plus sm Qualitap sm Media astersm Prospector sm Schedule-It sm
  Windows ® ® ® Form 10-K
   4




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##### Table of Contents



FORWARD-LOOKING
    STATEMENTS  Form 10-K
  
    renew contracts with large customers as they expire;
    successfully execute our business strategies, including
    implementation of our Portable People
    Metertm
    service and entering into potential joint-venture or other
    third-party agreements;
    effectively manage the impact of any further consolidation in
    the radio and advertising agency industries;
    respond to rapidly changing technological needs of our customer
    base, including creating new proprietary software systems and
    new customer products and services that meet these needs in a
    timely manner;
    successfully manage the impact on our business of any economic
    downturn generally and in the advertising market in particular;
    successfully manage the impact on costs of data collection due
    to lower respondent cooperation in surveys, privacy concerns,
    consumer trends, technology changes
    and/or
    government regulations;
    successfully develop and implement technology solutions to
    measure multi-media and advertising in an increasingly
    competitive environment; and
    successfully obtain
    and/or
    maintain Media Rating Council accreditation for our audience
    measurement services.  Form 10-K.
   5




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PART I  ITEM 1.
    BUSINESS  (212) 887-1300.
   Overview  out-of-home
  
    measuring radio audiences in local markets in the United States;
    measuring national radio audiences and the audience size and
    composition of network radio programs and commercials;
    providing application software used for accessing and analyzing
    media audience and marketing information data; and
    providing consumer, shopping and media usage information
    services to radio, cable television, advertising agencies,
    advertisers, retailers,
    out-of-home
    media, online industries and, through its Scarborough joint
    venture, broadcast television and print media.        Out-of-Home out-of-home
     6




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tm tm
  Form 10-K.
 Industry
    Background and Markets          Out-of-home out-of-home out-of-home out-of-home
 7




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Radio
    Audience Measurement Services  Collection of Listener Data Through Diary
    Methodology. seven-day follow-up
  Response Rates and Sample Proportionality. Spanish-language
      African-American,
  Small Market Initiatives.
 8




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Quality Improvement Initiatives.
  
    introducing electronic audience measurement through the Portable
    People Meter system;
    improving participation and proportional representation of
    African-American,
    Hispanic and young male respondents in diary-based markets;
    phasing in cellular-phone-only households into the Arbitron
    sample frame beginning in 2008;
    maintaining a comprehensive program to address declining
    response rates; and
    implementing, effective with the Winter 2007 survey, an
    Internet-based, electronic diary (eDiary) to complement the
    standard paper and pencil diary, in diary-based markets.    
    improving ethnic measurement, including language usage weighting
    and personal race/ethnicity classification. Language usage
    weighting provides that, in addition to weighting based on
    sex/age, county and race (where applicable), language usage
    among Hispanics will be an additional weighting factor in
    certain Arbitron markets. Personal race/ethnicity means that
    Arbitron classifies the race and ethnicity of diarykeepers at
    the individual participant level rather than a group
    classification of everyone in the household;
    completing the first phase of a program designed to increase the
    stability of radio audience estimates in certain small markets.
    In the second phase, beginning in 2008, the surveys will be
    conducted by allocating the placement of diaries evenly over a
    12-month
    period;
    launching eBook in 2006, an electronic version of
    Arbitrons current printed Radio Market Report book;
    implementing Total Line reporting for simulcast stations.
    Stations that are 100 percent simulcasting may request
    Arbitron to report their estimates in a single combined total
    line in all applications and reports; and
    introducing the first phase of a multistage program to improve
    the measurement of new audio sources, including Internet and
    satellite.  Portable People Meter Ratings Service.
   9




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out-of-home
    tm African-Americans
      out-of-home
   10




---



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state-of-the-art
  Form 10-K
  Portable People Meter Service  2007
    Developments.
  Portable People Meter Service 
    International.
 11




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National Marketing Panel Service (Project
    Apollo). U.S.-measured
         12




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Radio Market Report and Other Data
    Services.
  and/or
    12-month
    RADAR.
   13




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Software
    Applications    apscan apscan cost-per-point hour-by-hour apscan ualitap
       Local
    Market Consumer Information Services  out-of-home
    
    The Scarborough Report, which is offered in larger markets;
    The Scarborough Mid-Tier Local Market Consumer Study, which
    is offered in medium markets;
    The RetailDirect Service, which is offered in medium
    markets; and
    The Qualitative Diary Service/LocalMotion Service, which is
    offered in smaller markets. 14




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Scarborough Report. out-of-home out-of-home out-of-home
  Scarborough Mid-Tier Local Market Consumer
    Study. point-in-time out-of-home
  RetailDirect Service. out-of-home out-of-home
  Qualitative Diary Service/LocalMotion
    Service. out-of-home
 15




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Arbitron
    Cable Services   Arbitron
    Out-of-Home
    Services  out-of-home out-of-home out-of-home
 Custom
    Research Services  Chinese-language play-by-play out-of-home
    out-of-home
 International
    Operations  CSW
    Research Limited (Continental Research)
  business-to-business,
  Media.
  Advertising.
  Business-to-Business. business-to-business
  Public Sector.
 16




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Telecommunications and
    Internet.
  Mexico
   Arbitron
    Corporate Strategy  out-of-home
  
    Continue to invest in quality improvements in its radio audience
    measurement services and to develop new revenue sources.
    Additionally, Arbitron believes that a growth opportunity exists
    in the advertiser market and intends to seek to expand its
    customer base of advertisers by developing and marketing new
    information services designed to assist corporate advertisers in
    implementing targeted marketing strategies.
    Build on Arbitrons experience in the radio audience
    measurement industry and its PPM technology to expand into
    information services for other types of media. In some cases,
    the Company may enter into agreements with third parties to
    assist with the marketing, technical and financial aspects of
    expanding into measurement services for other types of media.
    Develop and commercialize the next-generation data collection
    and processing techniques. Arbitrons businesses require
    sophisticated data collection and processing systems, software
    and other technology. The collection of Arbitrons survey
    respondent information is dependent on individuals keeping track
    of their listening, viewing and reading activities in diaries.
    The technology underlying the media measurement industry is
    undergoing rapid change, and Arbitron will need to continue to
    develop its data collection, processing and software systems to
    accommodate these changes. The development of Arbitrons
    PPM service is in response to a growing demand for higher
    quality, and more efficient and timely methods for measuring and
    reporting audiences.
    Expand international business. Arbitron continues to explore
    opportunities that would further expand the licensing of its PPM
    technology internationally into selected international regions,
    such as Europe and the Asia/Pacific regions. Arbitron believes
    there is a demand for quality audience information
    internationally from global advertisers and media.
    Provide multimedia exposure data combined with single-source
    sales data that will help support the media industrys
    pursuit of increased accountability to advertisers for their
    return on investments made in media. Increased accountability
    relies on demonstrating that the advertisement ran as ordered,
    that the commercial audience was delivered as expected and that
    product sales were linked to such advertisements. Customers,
    Sales and Marketing   17




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##### Table of Contents



out-of-home
    ualitap
    
    gathering and publishing studies, which are available for no
    charge on Arbitrons Web site, on emerging trends in the
    radio, Internet broadcasting,
    out-of-home
    and other media industries, as well as the media habits of radio
    listeners and television, cable and Internet viewers;
    conducting direct-marketing programs directed toward radio
    stations, cable companies, advertising agencies and corporate
    advertisers;
    promoting Arbitron and the industries Arbitron serves through a
    public relations program aimed at the trade press of the
    broadcasting,
    out-of-home
    media, Internet, advertising and marketing industries, as well
    as select local and national consumer and business press;
    participating in key industry forums and interest groups, such
    as the Advertising Research Foundation, the American Association
    of Advertising Agencies, the National Association of
    Broadcasters, the Association of National Advertisers, the Radio
    Advertising Bureau, European Society for Opinion Marketing and
    Research, the Television Bureau of Advertising, the Cable
    Advertising Bureau, American Women in Radio and Television,
    Women in Cable Television, the Cable &
    Telecommunications Association for Marketing and the Outdoor
    Advertising Association of America, as well as numerous state
    and local advertising and broadcaster associations;
    maintaining a significant presence at major industry
    conventions, such as those sponsored by the National Association
    of Broadcasters, the Radio Advertising Bureau, the American
    Association of Advertising Agencies, the Cable Advertising
    Bureau and the Outdoor Advertising Association of
    America; and
    being a founding member of the Radio Advertising Effectiveness
    Lab, an industry
    not-for-profit
    organization providing information about the effectiveness of
    radio advertising.     18




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Competition      out-of-home
    state-of-the-art
  Form 10-K
 Intellectual
    Property       19




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ualitap edia aster rospector
    assignment-of-inventions
     Research
    and Development   Governmental
    Regulation     20




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Employees   Seasonality   Available
    Information  , Form 10-K, Form 10-Q,
 21




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Form 8-K,
  Form 8-K
  ITEM 1A.
    RISK
    FACTORS  Risk
    Factors Relating to Arbitrons Businesses and the Industry
    in Which Arbitron Operates
  Arbitrons business, financial position and operating
    results are dependent on the performance of its radio audience
    measurement business.
    Technological change may render Arbitrons products
    and services obsolete. If Arbitron is unable to successfully
    adapt to changing technologies and customer demands, either
    through the development and marketing of new products and
    services, or through enhancements to its existing products and
    services, its business, financial position and results of
    operations would be adversely affected.
  and/or
  Consolidation in the radio broadcasting industry has led
    to Arbitrons increasing dependence on key customers. The
    loss of a key customer would significantly reduce
    Arbitrons revenue and operating results.
   22




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Consolidation in the radio broadcasting industry may put
    pressure on the pricing of Arbitrons radio audience
    measurement service and related software sales, thereby leading
    to decreased earnings growth.
    Arbitrons agreements with its customers are not
    exclusive and contain no renewal obligations. The failure of
    Arbitrons customers to renew all or part of their
    contracts could have an adverse effect on Arbitrons
    business, financial position and operating results.
    Long-term agreements with Arbitrons customers limit
    its ability to increase the prices Arbitron charges for its
    services if Arbitrons costs increase.
    If Arbitrons PPM ratings service does not generate
    the revenues that it anticipates, or if Arbitrons ability
    to earn such revenues is delayed, its financial results will
    suffer.
      
    technical difficulties or service interruptions that
    significantly harm its ability to deliver the PPM ratings
    service on schedule; 23




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
    the amount and timing of operating costs and capital
    expenditures related to the commercialization of its PPM ratings
    service;
    the amount and timing of costs related to changes in the size
    and/or
    composition of its panels, particularly as a result of turnover
    among panel members;
    its ability to complete the MRC audit process and accreditation
    of the PPM methodology in a timely manner;
    its ability to obtain, in a timely manner, sufficient quantities
    of quality equipment and software products from third-party
    suppliers necessary to outfit its panelists; and
    the acceptance of its PPM ratings service by advertisers and
    radio broadcasters.  Arbitron expects to invest in the continued development
    and commercialization of its PPM ratings service and the
    National Marketing Panel Service, which may not be successfully
    developed or commercialized. The costs associated with
    commercialization of these services will adversely affect
    Arbitrons operating results, over the commercialization
    period.
          The success of commercialization of the PPM ratings
    service and the National Marketing Panel Service is dependent on
    contract manufacturers who produce the PPM equipment according
    to Arbitrons proprietary design as well as those who
    manufacture parts and develop certain software applications. The
    failure of Arbitron to obtain, in a timely manner, sufficient
    quantities of quality equipment and the necessary software
    applications to meet Arbitrons needs could adversely
    affect the commercial deployment of the PPM ratings service and
    the National Marketing Panel Service and, therefore, could
    adversely affect Arbitrons operating results.
   24




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Arbitrons inability to complete the process of the
    Media Rating Council (MRC) audit of the PPM
    methodology, in a timely manner, could delay the
    commercialization of the PPM service, which could adversely
    affect Arbitrons business.
      The success of Arbitrons radio audience measurement
    business depends on diarykeepers who record their listening
    habits in diaries and return these diaries to Arbitron. The
    failure of Arbitron to recruit participants and to collect these
    diaries could adversely affect Arbitrons business.
    It may become more difficult and more expensive for
    Arbitron to reach and recruit participants for its audience
    measurement services, which could adversely affect its business,
    financial position and operating results.
    Arbitrons ability to recruit participants for its
    surveys could be adversely affected by governmental
    regulations.
    Arbitron has limited experience designing, recruiting and
    maintaining PPM panels.
 25




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The license of proprietary software that will enable
    enhanced access to respondent-level data to third-party software
    providers and customers could adversely affect the market for
    some of Arbitrons existing software products.
    Arbitrons success will depend on its ability to
    protect its intellectual property rights.
    
    obtaining patent protection for its technology, products and
    services, in particular its PPM system;
    defending its patents once obtained;
    preserving its trade secrets;
    defending its copyrights for its data services and audience
    estimates; and
    operating without infringing upon patents and proprietary rights
    held by third parties.    One of Arbitrons strategies is to expand its
    international business, which involves unique risks and, if
    unsuccessful, could impede the growth of Arbitrons
    business.
      
    costs of customizing services for foreign customers;
    difficulties in managing international operations;
    reduced protection for intellectual property rights in some
    countries; 26




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
    longer sales and payment cycles;
    the burdens of complying with a wide variety of foreign laws;
    exposure to local economic conditions;
    exposure to local political conditions, including the risks of
    an outbreak of war, the escalation of hostilities, acts of
    terrorism and seizure of assets by a foreign government; and
    exposure to foreign currency exchange rate fluctuation.      Arbitron is dependent on its proprietary software systems
    for current and future business requirements. Significant delays
    in the completion of these systems, cost overages
    and/or
    inadequate performance of the systems once completed could
    adversely affect Arbitrons business, financial position
    and operating results.
  and/or
  Criticism of the Arbitron audience measurement service by
    various industry groups and market segments could adversely
    affect Arbitrons business.
    Arbitrons future growth and success will depend on
    its ability to successfully compete with companies that may have
    financial, marketing, distribution, technical and other
    advantages over Arbitron.
    state-of-the-art
  Form 10-K
   27




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The media research industry is exploring options to
    achieve greater influence over the providers of audience
    measurement.
    An economic downturn generally, and in the advertising and
    radio industries in particular, could adversely impact
    Arbitrons revenue.
    Advertisers are pursuing increased accountability from the
    media industry for their return on investments made in media. As
    a result, advertisers may shift advertising expenditures away
    from less accountable forms of media, such as radio, which could
    have an adverse effect on Arbitrons business, financial
    position and operating results.
    Arbitron enters into agreements with third parties to use
    certain data and services in connection with the provision of
    its current services. In addition, Arbitron may need to enter
    into agreements with third parties to assist with the marketing,
    technical, and financial aspects of expanding its services for
    other types of media. In the event Arbitron is unable to use
    such third-party data and services or if Arbitron is unable to
    enter into agreements with third parties, when necessary,
    Arbitrons business
    and/or its
    potential growth could be adversely affected.
      Long-term disruptions in the mail, telecommunication
    infrastructure
    and/or air
    service could adversely affect Arbitrons business.
  and/or
 28




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Risk
    Factors Relating to Arbitrons Indebtedness
    
    the requirement that Arbitron maintain certain leverage and
    coverage ratios; and
    restrictions on its ability to sell assets, incur additional
    indebtedness and grant or incur liens on its assets.      Risk
    Factors Relating to Owning Arbitrons Common
    Stock
  Changes in market conditions, or sales of Arbitron common
    stock, could adversely affect the market price of
    Arbitrons common stock.
      It may be difficult for a third party to acquire Arbitron,
    which could depress the stock price of Arbitrons common
    stock.
    
    a stockholders rights plan, which likely will limit,
    through November 21, 2012, the ability of a third party to
    acquire a substantial amount of Arbitrons common stock
    without prior approval by the Board of Directors;
    restriction from engaging in a business combination
    with an interested stockholder for a period of three
    years after the date of the transaction in which the person
    became an interested stockholder under Section 203 of the
    Delaware General Corporation Law;
    authorization to issue one or more classes of preferred stock,
    which can be created and issued by the Board of Directors
    without prior stockholder approval, with rights senior to common
    stockholders;
    advance notice requirements for the submission by stockholders
    of nominations for election to the Board of Directors and for
    proposing matters that can be acted upon by stockholders at a
    meeting; and 29




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
    requiring a supermajority vote of 80 percent of the
    stockholders to exercise the stockholders right to amend
    the Bylaws.    
    requiring a supermajority vote of two-thirds of the stockholders
    to approve some mergers and other business combinations; and
    restriction from engaging in a business combination
    with a controlling person unless either a modified
    supermajority vote is received or the business combination will
    result in the termination of ownership of all shares of
    Arbitrons common stock and the receipt of consideration
    equal to at least fair market value.  ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    ITEM 3.
    LEGAL
    PROCEEDINGS       30




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES      2006

1Q


2Q


3Q


4Q


Full YearHigh

$
40.77


$
40.60


$
38.56


$
45.80


$
45.80Low

$
33.34


$
32.68


$
35.04


$
36.65


$
32.68Dividend

$
0.10


$
0.10


$
0.10


$
0.10


$
0.40   2005

1Q


2Q


3Q


4Q


Full YearHigh

$
43.29


$
44.76


$
43.80


$
40.78


$
44.76Low

$
36.62


$
38.88


$
39.14


$
37.04


$
36.62Dividend

$
0.10


$
0.10


$
0.10


$
0.10


$
0.40           ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K.
   31




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Form 10-K. Form 10-K.
  As of and for the Years Ended December 31,2006


2005


2004


2003


2002(In thousands, except per share data)Statement of Income
    DataRevenue

$
329,250


$
309,955


$
296,553


$
273,550


$
249,757Costs and expenses


252,988



216,347



205,669



187,613



169,645Operating income


76,262



93,608



90,884



85,937



80,112Equity in net income of affiliate


7,748



7,829



7,552



6,754



5,627Income before interest and income
    tax expense


84,010



101,437



98,436



92,691



85,739Interest expense, net


3,000



880



6,810



11,597



16,219Income before income tax expense


81,010



100,557



91,626



81,094



69,520Income tax expense


30,352



33,249



31,061



31,221



26,765Net income

$
50,658


$
67,308


$
60,565


$
49,873


$
42,755Net Income Per Weighted Average
    Common ShareBasic

$
1.69


$
2.16


$
1.96


$
1.66


$
1.45Diluted

$
1.68


$
2.14


$
1.92


$
1.63


$
1.42Cash dividends declared per
    share

$
0.40


$
0.40


$



$



$
Weighted average common shares
    used in calculationsBasic


29,937



31,179



30,972



30,010



29,413Diluted


30,086



31,500



31,471



30,616



30,049Balance Sheet DataCurrent assets

$
105,545


$
160,926


$
120,161


$
116,857


$
86,422Total assets


210,320



254,708



199,949



188,022



159,866Long-term debt






50,000



50,000



105,000



165,000Stockholders equity (deficit)

$
89,256


$
96,182


$
49,208


$
(14,245
)

$
(96,751
)   Share-Based Payments Accounting for Stock Issued to Employees
  ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Form 10-K.
 Overview  out-of-home
 32




---



##### Table of Contents



Known
    Trends that Management Considers Material  Significant Customers.
  Slow Growth in Diary Business.
  Electronic Measurement Initiatives.
     Response
    Rates and Sample Proportionality  African-American,
 33




---



##### Table of Contents



Forward
    Looking Statements  Form 10-K Form 10-K
 Stock
    Repurchases     Critical
    Accounting Policies and Estimates    98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use
   34




---



##### Table of Contents



Results
    of Operations  Comparison
    of Year Ended December 31, 2006 to Year Ended
    December 31, 2005
    Consolidated
    Statements of Income
    (Dollars in thousands, except per share amounts)
  Percentage ofIncrease (Decrease)


Revenue2006


2005


Dollars


Percent


2006


2005Revenue

$
329,250


$
309,955


$
19,295



6.2
%


100.0
%


100.0
%Costs and expensesCost of revenue


129,702



110,500



19,202



17.4
%


39.4
%


35.7
%Selling, general and administrative


79,051



67,284



11,767



17.5
%


24.0
%


21.7
%Research and development


44,235



38,563



5,672



14.7
%


13.4
%


12.4
%Total costs and expenses


252,988



216,347



36,641



16.9
%


76.8
%


69.8
%Operating income


76,262



93,608



(17,346
)


(18.5
)%


23.2
%


30.2
%Equity in net income of affiliate


7,748



7,829



(81
)


(1.0
)%


2.4
%


2.5
%Income before interest and income
    tax expense


84,010



101,437



(17,427
)


(17.2
)%


25.6
%


32.7
%Interest income


3,103



3,121



(18
)


(0.6
)%


0.9
%


1.0
%Interest expense


6,103



4,001



2,102



52.5
%


1.9
%


1.3
%Income before income tax expense


81,010



100,557



(19,547
)


(19.4
)%


24.6
%


32.4
%Income tax expense


30,352



33,249



(2,897
)


(8.7
)%


9.2
%


10.7
%Net income

$
50,658


$
67,308


$
(16,650
)


(24.7
)%


15.4
%


21.7
%Net income per weighted average
    common shareBasic

$
1.69


$
2.16


$
(0.47
)


(21.8
)%Diluted

$
1.68


$
2.14


$
(0.46
)


(21.5
)%Cash dividends declared per common
    share

$
0.40


$
0.40


$




Other data:EBIT (1)

$
84,010


$
101,437


$
(17,427
)


(17.2
)%EBITDA (1)

$
93,408


$
107,256


$
(13,848
)


(12.9
)%EBIT and EBITDA
    Reconciliation (1)Net income

$
50,658


$
67,308


$
(16,650
)Income tax expense


30,352



33,249



(2,897
)Interest income


3,103



3,121



(18
)Interest expense


6,103



4,001



2,102EBIT (1)


84,010



101,437



(17,427
)Depreciation and amortization


9,398



5,819



3,579EBITDA (1)

$
93,408


$
107,256


$
(13,848
)  35




---



##### Table of Contents



(1)
    
    EBIT (earnings before interest and income taxes) and EBITDA
    (earnings before interest, income taxes, depreciation and
    amortization) are non-GAAP financial measures that the
    management of Arbitron believes are useful to investors in
    evaluating Arbitrons results. For further discussion of
    these non-GAAP financial measures, see paragraph below entitled
    EBIT and EBITDA.    Years EndedDecember 31,2006


2005


ChangeCost of revenue

$
567


$




567Selling, general and administrative


5,586



426



5,160Research and development


392







392Total costs and expenses


6,545



426



6,119Operating income (loss)


(6,545
)


(426
)


(6,119
)Income tax benefit


2,454



161



2,293Net income (loss)

$
(4,091
)

$
(265
)

$
(3,826
)Net income (loss) per
    weighted-average common shareBasic

$
(0.14
)

$
(0.01
)

$
(0.13
)Diluted

$
(0.14
)

$
(0.01
)

$
(0.13
)   Revenue.
  Cost of Revenue.
  Selling, General and
    Administrative.
 36




---



##### Table of Contents



Research and Development.
  Operating Income.
  Equity in Net Income of
    Affiliate.
  Interest Income.
  Interest Expense.
  Income Tax Expense.
  Net Income.
 37




---



##### Table of Contents



EBIT and EBITDA.
 38




---



##### Table of Contents



Comparison
    of Year Ended December 31, 2005 to Year Ended
    December 31, 2004
    Consolidated
    Statements of Income
    (Dollars in thousands, except per share amounts)
  Percentage ofIncrease (Decrease)


Revenue2005


2004


Dollars


Percent


2005


2004Revenue

$
309,955


$
296,553


$
13,402



4.5
%


100.0
%


100.0
%Costs and expensesCost of revenue


110,500



110,710



(210
)


(0.2
)%


35.7
%


37.3
%Selling, general and administrative


67,284



61,662



5,622



9.1
%


21.7
%


20.8
%Research and development


38,563



33,297



5,266



15.8
%


12.4
%


11.2
%Total costs and expenses


216,347



205,669



10,678



5.2
%


69.8
%


69.3
%Operating income


93,608



90,884



2,724



3.0
%


30.2
%


30.7
%Equity in net income of affiliate


7,829



7,552



277



3.7
%


2.5
%


2.5
%Income before interest and income
    tax expense


101,437



98,436



3,001



3.0
%


32.7
%


33.2
%Interest income


3,121



1,099



2,022



184.0
%


1.0
%


0.4
%Interest expense


4,001



7,909



(3,908
)


(49.4
)%


1.3
%


2.7
%Income before income tax expense


100,557



91,626



8,931



9.7
%


32.4
%


30.9
%Income tax expense


33,249



31,061



2,188



7.0
%


10.7
%


10.5
%Net income

$
67,308


$
60,565


$
6,743



11.1
%


21.7
%


20.4
%Net income per weighted average
    common shareBasic

$
2.16


$
1.96


$
0.20



10.1
%Diluted

$
2.14


$
1.92


$
0.22



11.3
%Cash dividends declared per common
    share

$
0.40


$



$
0.40



Other data:EBIT (1)

$
101,437


$
98,436


$
3,001



3.0
%EBITDA (1)

$
107,256


$
104,158


$
3,098



3.0
%EBIT and EBITDA
    Reconciliation (1)Net income

$
67,308


$
60,565


$
6,743Income tax expense


33,249



31,061



2,188Interest income


3,121



1,099



2,022Interest expense


4,001



7,909



(3,908
)EBIT (1)


101,437



98,436



3,001Depreciation and amortization


5,819



5,722



97EBITDA (1)

$
107,256


$
104,158


$
3,098     (1)
    
    EBIT (earnings before interest and income taxes) and EBITDA
    (earnings before interest, income taxes, depreciation and
    amortization) are non-GAAP financial measures that the
    management of Arbitron believes are 39




---



##### Table of Contents



useful to investors in evaluating Arbitrons results. For
    further discussion of these non-GAAP financial measures, see
    paragraph below entitled EBIT and EBITDA.  Revenue.
  Cost of Revenue.
  Selling, General and
    Administrative.
  Research and Development.
  Operating Income.
  Equity in Net Income of
    Affiliate.
  Interest Income.
  Interest Expense.
  Income Tax Expense.
 40




---



##### Table of Contents



Net Income.
  EBIT and EBITDA.
 Liquidity
    and Capital Resources        available-for-sale
 41




---



##### Table of Contents



42




---



##### Table of Contents



and/or
    Less Than


1-3


3-5


More Than1 Year


Years


Years


5 Years


TotalLong-term debt (A)

$



$



$



$



$
Operating leases (B)


8,889



17,071



9,195



3,727



38,882Purchase obligations (C)


2,791















2,791Contributions for retirement
    plans (D)


2,400















2,400$
14,080


$
17,071


$
9,195


$
3,727


$
44,073  43




---



##### Table of Contents



(A)
    
    Arbitrons $50.0 million senior-secured debt
    obligation was prepaid during the fourth quarter of 2006. On
    December 20, 2006, Arbitron entered into a new credit
    agreement with a consortium of lenders to provide up to
    $150.0 million of financing. No borrowings under this new
    agreement were made as of December 31, 2006.(B)
    
    See note 12 in the notes to consolidated financial
    statements.(C)
    
    Other than for PPM equipment purchases, Arbitron generally does
    not make unconditional, noncancelable purchase commitments.
    Arbitron enters into purchase orders in the normal course of
    business, and they do not exceed one-year terms.(D)
    
    Amount represents an estimate of its cash contribution for 2007
    for retirement plans. Future cash contributions will be
    determined based upon the funded status of the plan. See
    note 14 in the notes to consolidated financial statements. Off-Balance
    Sheet Arrangements   New
    Accounting Pronouncements  Share-Based Payments Revised.
  Accounting for Uncertainty in Income
    Taxes , Accounting for Income
    Taxes.
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans
  Fair Value Measurements
 44




---



##### Table of Contents



ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest
    Rate Risk  available-for-sale.
     Foreign
    Currency Risk    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA   45




---



##### Table of Contents



ARBITRON
    INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageReports of
    Independent Registered Public Accounting Firm


47Consolidated
    Balance Sheets as of December 31, 2006 and 2005


49Consolidated
    Statements of Income for the Years Ended December 31, 2006,
    2005 and 2004


50Consolidated
    Statements of Stockholders Equity (Deficit) for the Years
    Ended December 31, 2006, 2005 and 2004


51Consolidated
    Statements of Comprehensive Income for the Years Ended
    December 31, 2006, 2005 and 2004


52Consolidated
    Statements of Cash Flows for the Years Ended December 31,
    2006, 2005 and 2004


53Notes to
    Consolidated Financial Statements


54Consolidated
    Schedule of Valuation and Qualifying Accounts


78  46




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm           Share-Based
    Payment, Employers Accounting
    for Defined Benefit Pension and Other Postretirement Plans
  Internal Control 
    Integrated Framework
  /s/  KPMG
    LLP    47




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
     , Internal Control  Integrated Framework
        Internal
    Control  Integrated Framework Internal Control  Integrated
    Framework
    /s/  KPMG
    LLP    48




---



##### Table of Contents



ARBITRON
    INC.
  Consolidated
    Balance Sheets
 December 31,
    2006 and 2005
 (In thousands, except par value data)
  2006


2005AssetsCurrent assetsCash and cash equivalents

$
33,640


$
40,848Receivables from brokers






30,000Short-term investments


27,625



52,560Trade accounts receivable, net of
    allowance for doubtful accounts of $1,419 in 2006 and $1,165 in
    2005


33,296



27,708Inventory


3,793



442Prepaid expenses and other current
    assets


4,167



3,665Deferred tax assets


3,024



5,703Total current assets


105,545



160,926Investment in affiliate


13,907



12,959Property and equipment, net


41,470



30,875Goodwill, net


40,558



40,558Other intangibles, net


2,029



3,578Noncurrent deferred tax assets


5,913



4,739Other noncurrent assets


898



1,073Total assets

$
210,320


$
254,708Liabilities and
    Stockholders EquityCurrent liabilitiesAccounts payable

$
9,972


$
8,605Accrued expenses and other current
    liabilities


33,258



31,123Deferred revenue


66,875



62,434Total current liabilities


110,105



102,162Noncurrent liabilitiesLong-term debt






50,000Other noncurrent liabilities


10,959



6,364Total liabilities


121,064



158,526Commitments and contingenciesStockholders equityPreferred stock, $100.00 par
    value, 750 shares authorized, no shares issued






Common stock, $0.50 par
    value, authorized 500,000 shares, issued 32,338 shares
    in 2006 and 2005


16,169



16,169Additional paid-in capital


53,598



94,908Accumulated earnings (net
    distributions to Ceridian in excess of accumulated earnings)
    prior to spin-off


(239,042
)


(239,042
)Retained earnings subsequent to
    spin-off


266,905



228,211Common stock held in treasury,
    2,646 shares in 2006 and 1,294 shares in 2005


(1,323
)


(647
)Accumulated other comprehensive
    loss


(7,051
)


(3,417
)Total stockholders equity


89,256



96,182Total liabilities and
    stockholders equity

$
210,320


$
254,708    49




---



##### Table of Contents



ARBITRON
    INC.
  Consolidated Statements of Income
 Years Ended December 31, 2006, 2005 and 2004
 (In thousands, except per share data)
  2006


2005


2004Revenue

$
329,250


$
309,955


$
296,553Costs and expensesCost of revenue


129,702



110,500



110,710Selling, general and administrative


79,051



67,284



61,662Research and development


44,235



38,563



33,297Total costs and expenses


252,988



216,347



205,669Operating income


76,262



93,608



90,884Equity in net income of affiliate


7,748



7,829



7,552Income before interest and income
    tax expense


84,010



101,437



98,436Interest income


3,103



3,121



1,099Interest expense


6,103



4,001



7,909Income before income tax expense


81,010



100,557



91,626Income tax expense


30,352



33,249



31,061Net income

$
50,658


$
67,308


$
60,565Net income per weighted-average
    common shareBasic

$
1.69


$
2.16


$
1.96Diluted

$
1.68


$
2.14


$
1.92Weighted-average common shares
    used in calculationsBasic


29,937



31,179



30,972Potentially dilutive securities


149



321



499Diluted


30,086



31,500



31,471Dividends declared per common
    share outstanding

$
0.40


$
0.40


$
    50




---



##### Table of Contents



ARBITRON
    INC.
    Consolidated Statements of Stockholders Equity
    (Deficit)
    Years Ended December 31, 2006, 2005 and 2004
    (In thousands)
  AccumulatedEarnings (NetDistributions toCeridian inExcess  of


Retained


Common


Accumulated


TotalNumber of





Additional


Accumulated


Earnings


Stock


Other


StockholdersShares


Common


Paid-In


Earnings)


Subsequent to


Held in


Comprehensive


EquityOutstanding


Stock


Capital


Prior to Spin-off


Spin-off


Treasury


Loss


(Deficit)Balance at December 31, 2003


30,710


$
16,168


$
100,024


$
(239,042
)

$
112,795


$
(813
)

$
(3,377
)

$
(14,245
)Net income


















60,565











60,565Other comprehensive income
    (loss)
    Foreign currency translation


























230



230Change in additional minimum
    pension liability


























168



168Change in unrealized loss on
    interest rate swap


























1,171



1,171Income tax expense


























(696
)


(696
)Common stock issued


916







20,908











459







21,367Noncash share-based compensation










188



















188Common stock repurchased


(666
)






(24,692
)










(334
)






(25,026
)Tax benefit from stock option
    exercises










5,486



















5,486Balance at December 31, 2004


30,960



16,168



101,914



(239,042
)


173,360



(688
)


(2,504
)


49,208Net income


















67,308











67,308Other comprehensive income
    (loss)
    Foreign currency translation


























(341
)


(341
)Change in additional minimum
    pension liability


























(1,124
)


(1,124
)Income tax benefit


























552



552Dividends declared


















(12,457
)










(12,457
)Common stock issued


1,033



1



26,091











515







26,607Noncash share-based compensation










426



















426Common stock repurchased


(949
)






(39,502
)










(474
)






(39,976
)Tax benefit from stock option
    exercises










5,979



















5,979Balance at December 31, 2005


31,044



16,169



94,908



(239,042
)


228,211



(647
)


(3,417
)


96,182Net income


















50,658











50,658Other comprehensive income
    (loss)
    Foreign currency translation


























431



431Change in retirement and
    post-retirement liabilities


























(6,375
)


(6,375
)Income tax benefit


























2,310



2,310Dividends declared


















(11,964
)










(11,964
)Common stock issued


640







19,096











313







19,409Noncash share-based compensation










6,538











7







6,545Common stock repurchased


(1,992
)






(69,004
)










(996
)






(70,000
)Tax benefits from share-based awards










2,060



















2,060Balance at December 31, 2006


29,692


$
16,169


$
53,598


$
(239,042
)

$
266,905


$
(1,323
)

$
(7,051
)

$
89,256    51




---



##### Table of Contents



ARBITRON
    INC.
  Consolidated Statements of Comprehensive
    Income
 Years Ended December 31, 2006, 2005, and 2004
 (In thousands)
  2006


2005


2004Net income

$
50,658


$
67,308


$
60,565Other comprehensive (loss) income,
    net of taxForeign currency translation, net
    of tax (expense) benefit of $(168), $131, and $183, respectively


263



(210
)


47Fair value of interest rate swap,
    net of tax expense of $0, $0, and $(449), respectively










722Benefit plans net of tax benefit
    (expense) of $2,478, $421 and $(64), respectively


(3,897
)


(703
)


104Other comprehensive (loss) income


(3,634
)


(913
)


873Comprehensive income

$
47,024


$
66,395


$
61,438    52




---



##### Table of Contents



ARBITRON
    INC.
  Consolidated Statements of Cash Flows
 Years Ended December 31, 2006, 2005 and 2004
 (In thousands)
  2006


2005


2004Cash flows from operating
    activitiesNet income

$
50,658


$
67,308


$
60,565Adjustments to reconcile net
    income to net cash provided by operating activitiesDepreciation and amortization of
    property and equipment


7,848



4,162



4,334Amortization of intangible assets


1,550



1,657



1,388Loss on asset disposals


591



347



541Asset impairment charges


638







328Deferred income taxes


3,816



1,326



22,748Equity in net income of affiliate


(7,748
)


(7,829
)


(7,552
)Distributions from affiliate


6,800



7,000



6,375Bad debt expense


890



426



305Tax benefit from stock option
    exercises






5,979



5,486Non-cash share-based compensation


6,545



426



188Changes in operating assets and
    liabilities, excluding effects of business acquisitionsTrade accounts receivable


(6,169
)


(4,982
)


(1,231
)Prepaid expenses and other assets


(529
)


(453
)


637Inventory


(3,351
)


(69
)


(147
)Accounts payable


1,136



2,054



42Accrued expense and other current
    liabilities


2,146



(2,853
)


2,721Deferred revenue


4,395



2,827



705Other noncurrent liabilities


(1,067
)


56



649Net cash provided by operating
    activities


68,149



77,382



98,082Cash flows from investing
    activitiesAdditions to property and equipment


(19,563
)


(15,615
)


(10,164
)Purchases of short-term investments


(456,975
)


(224,070
)


Proceeds from sales of short-term
    investments


511,910



141,510



Payments for business acquisitions






(4,176
)


(8,928
)Net cash provided by (used in)
    investing activities


35,372



(102,351
)


(19,092
)Cash flows from financing
    activitiesProceeds from stock option
    exercises and stock purchase plan


19,584



28,549



19,287Stock repurchases


(70,000
)


(39,976
)


(25,026
)Tax benefits realized from
    share-based awards


1,875







Dividends paid to stockholders


(12,103
)


(9,358
)


Payments for deferred financing
    costs


(447
)






Payment of long-term debt


(50,000
)






(55,000
)Net cash used in financing
    activities


(111,091
)


(20,785
)


(60,739
)Effect of exchange rate changes on
    cash and cash equivalents


362



(299
)


217Net (decrease) increase in cash
    and cash equivalents


(7,208
)


(46,053
)


18,468Cash and cash equivalents at
    beginning of year


40,848



86,901



68,433Cash and cash equivalents at end
    of year

$
33,640


$
40,848


$
86,901    53




---



##### Table of Contents



ARBITRON
    INC.
  Notes to Consolidated Financial Statements
  1.
    Basis of
    Presentation  Basis
    of Consolidation
    Description
    of Business
  out-of-home
  out-of-home
  2.
    Summary
    of Significant Accounting Policies  Revenue
    Recognition
  97-2, Software Revenue Recognition. No. 00-21, Accounting for Revenue Arrangements with Multiple
    Deliverables.
  Expense
    Recognition
    Cash
    Equivalents
   54




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
  Short-term
    Investments and Receivables from Brokers
  available-for-sale Accounting for Certain Investments in Debt and Equity
    Securities available-for-sale
      Trade
    Accounts Receivable
    Inventories
  tm tm first-in,
  Property
    and Equipment
    Computer equipment


3 yearsPurchased software and development
    costs


3  5 yearsLeasehold improvements


Shorter of useful life or life of leaseMachinery, furniture and fixtures


3  6 years     98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use.
 55




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
  Investment
    in Affiliate
    Goodwill
    and Other Intangibles
  Goodwill and Other
    Intangible Assets Accounting for Impairment or Disposal
    of Long-Lived Assets.
    Impairment
    of Long-Lived Assets
    Income
    Taxes
    Pro
    Forma Disclosures of Stock-Based Compensation
  Accounting for Stock Issued to
    Employees, (APB No. 25) Accounting for
    Certain Transactions Involving Stock Compensation, an
    interpretation of APB Opinion No. 25,
 56




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
  Accounting for Stock-Based
    Compensation, as amended by SFAS No. 148 Accounting for Stock-Based Compensation-Transitions and
    Disclosure Share-Based Payments Revised ,
  2005


2004Net income, as reported

$
67,308


$
60,565Add: Nonemployee stock-based
    compensation expense, net of tax


263



116Less: Stock-based compensation
    expense determined under fair value method, net of tax


5,537



3,042Pro forma net income

$
62,034


$
57,639Basic net income per weighted
    average common share, as reported

$
2.16


$
1.96Pro forma basic net income per
    weighted average common share

$
1.99


$
1.86Diluted net income per weighted
    average common share, as reported

$
2.14


$
1.92Pro forma diluted net income per
    weighted average common share

$
1.98


$
1.83Options granted to employees and
    directors


591,961



485,393Weighted-average exercise price

$
40.80


$
37.96Weighted-average fair value

$
13.72


$
13.09Weighted-average assumptions:Expected lives in years


6.5



6.0Expected volatility


28.5
%


27.3
%Expected dividend rate


1
%


Risk-free interest rate


3.89
%


3.69
%   Net
    Income per Weighted Average Common Share
     57




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
    Translation
    of Foreign Currencies
    Advertising
    Expense
    Accounting
    Estimates
    Legal
    Matters
    Leases
    New
    Accounting Pronouncements
  Share-Based Payments Revised.
  Accounting for Uncertainty in Income
    Taxes ), , Accounting for
    Income Taxes.
 58




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
    Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans
  Fair Value Measurements
  3.
    Inventories  first-in,
  4.
    Short-term
    Investments  available-for-sale
  available-for-sale available-for-sale
  5.
    Investment
    in Affiliate    out-of-home
   59




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
    6.
    Property
    and Equipment    2006


2005Purchased software and development
    costs

$
28,856


$
22,043Portable People Meter equipment


15,882



9,204Computer equipment


12,461



9,381Leasehold improvements


7,494



7,343Machinery, furniture and fixtures


5,896



5,72070,589



53,691Accumulated depreciation and
    amortization


(29,119
)


(22,816
)Property and equipment, net

$
41,470


$
30,875     7.
    Goodwill
    and Other Intangible Assets        2006


2005Beginning of year balance

$
40,558


$
37,773Integrated Radio Systems, LLC
    acquisition






2,785End of year balance

$
40,558


$
40,558  60




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
  8.
    Accrued
    Expenses and Other Current Liabilities    2006


2005Employee compensation and benefits

$
20,456


$
18,289Royalties due to Scarborough


6,067



5,483Dividend payable


2,960



3,099Other


3,775



4,252$
33,258


$
31,123   9.
    Purchase
    Acquisition  sm
    Business
    Combinations
  10.
    Long-term
    Debt       61




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
         11.Accumulated
    Other Comprehensive Loss
    2006


2005Foreign currency translation
    adjustment, net of tax

$
340


$
77Additional minimum pension
    liability, net of tax


(7,391
)


(3,494
)Accumulated other comprehensive
    loss

$
(7,051
)

$
(3,417
)   12.
    Commitments
    and Contingencies  Leases
   62




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
     2007

$
8,8892008


8,8282009


8,2432010


4,9682011


4,227Thereafter


3,727$
38,882   Legal
    Matters
        13.
    Income
    Taxes   63




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
     Income before income tax expense:U.S.

$
80,470


$
100,575


$
91,469International


540



(18
)


157Total

$
81,010


$
100,557


$
91,626Income tax expense:Current:U.S.

$
25,463


$
30,841


$
10,553State, local and foreign


1,073



1,082



(2,240
)26,536



31,923



8,313Deferred:U.S.


1,410



(975
)


18,455State, local and foreign


2,658



3,231



6,500Net reduction in valuation
    allowance


(252
)


(930
)


(2,207
)Total


3,816



1,326



22,748$
30,352


$
33,249


$
31,061U.S. statutory rate


35.0
%


35.0
%


35.0
%Income tax expense at
    U.S. statutory rate

$
28,353


$
35,196


$
32,069State income taxes, net of federal
    benefit


2,183



3,208



2,769Tax-exempt interest income


(1,052
)


(524
)


Meals and entertainment


278



264



295Reduction in valuation allowance
    for state NOLs


(252
)


(930
)


(2,207
)Adjustments to tax liabilities


673



(3,854
)


(1,718
)Other


169



(111
)


(147
)Income tax expense

$
30,352


$
33,249


$
31,061Effective tax rate


37.5
%


33.1
%


33.9
%    64




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
      2006


2005Deferred tax assets:Current deferred tax assetsAccruals

$
1,997



3,792Net operating loss carryforwards


1,027



1,9113,024



5,703Noncurrent deferred tax assetsBenefit plans


5,962



3,930Depreciation


2,023



1,126Accruals


644



602Net operating loss carryforwards


1,135



1,913FAS 123R share-based
    compensation


2,142



Partnership interest


2,416



2,681Other


29



33414,351



10,586Less valuation allowance


(12
)


(264
)Total deferred tax assets

$
17,363


$
16,025Deferred tax liabilities:Noncurrent deferred tax liabilitiesGoodwill and other intangible
    amortization

$
(5,906
)

$
(4,200
)Benefits plans


(2,385
)


(1,308
)Other


(135
)


(75
)Total deferred tax liabilities


(8,426
)


(5,583
)Net deferred tax assets

$
8,937


$
10,442      65




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
    65.1




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
  14.
    Retirement
    Plans  Adoption
    of SFAS No. 158
  Employers Accounting for Defined Benefit Pension and
    Other Postretirement Plans
  Incremental Impact ofSFAS No. 158 AdoptionAs of December 31, 2006Before SFAS





After SFASNo. 158





No. 158Adoption


Adjustment


AdoptionNoncurrent deferred tax asset

$
(1,122
)

$
4,699


$
3,577Other noncurrent assets


6,172



(6,172
)


Total assets


5,050



(1,473
)


3,577Accrued expenses and other current
    liabilities


(1,318
)


249



(1,069
)Noncurrent liabilities


3,266



5,357



8,623Total liabilities


1,948



5,606



7,554Accumulated other comprehensive
    loss


(312
)


(7,079
)


(7,391
)Total stockholders equity

$
(312
)

$
(7,079
)

$
(7,391
)     Pension
    Benefits
     66




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
   non-U.S. stocks
    Plan Assetsas ofSeptember 30,Asset Category

2006


2005Equity securities


59
%


59
%Debt securities


39
%


40
%Cash and cash equivalents


2
%


1
%Total


100
%


100
%     Net Periodic Cost

2006


2005


2004Service cost of benefits

$
966


$
809


$
742Interest cost


1,651



1,549



1,415Expected return on plan assets


(1,970
)


(1,674
)


(1,486
)Amortization of net actuarial loss


719



559



469Amortization of prior service cost


22



22



22Total

$
1,388


$
1,265


$
1,162     2007

$
1,6322008


1,7592009


1,8432010


1,7282011


2,0332012-2016


12,113$
21,108  67




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
      Supplemental
    Retirement
        2007

$
2592008


2652009


3362010


7992011


2642012-2016


1,532$
3,455     Net Periodic Cost

2006


2005


2004Service cost of benefits

$
57


$
57


$
122Interest cost


162



136



192Expected return on plan assets










Amortization of net actuarial loss


123



155



231Amortization of prior service cost


(22
)


(22
)


(22
)Total

$
320


$
326


$
523   68




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
  Defined Benefit


SupplementalPension Plan


Retirement PlansSeptember 30,


September 30,2006


2005


2006


2005(Dollars in thousands)Change in benefit obligation
    during the periodAt beginning of period

$
30,286


$
25,658


$
2,972


$
2,266Service cost


966



809



57



57Interest cost


1,651



1,549



162



136Plan participants
    contributions


348



364



50



56Actuarial loss


631



2,448



552



516Benefits paid


(1,948
)


(542
)


(140
)


(59
)At end of period

$
31,934


$
30,286


$
3,653


$
2,972Change in fair value of plan
    assetsAt beginning of period

$
25,124


$
20,597


$



$
Actual return on plan assets


2,078



2,197







Employer contribution


2,872



2,508



140



59Plan participants
    contributions


348



364







Benefits paid


(1,948
)


(542
)


(140
)


(59
)At end of period

$
28,474


$
25,124


$



$
Funded status

$
(3,460
)

$
(5,162
)

$
(3,653
)

$
(2,972
)Contributions between measurement
    date and year end






N/A



12



N/ANet pension liability at fiscal
    year end

$
(3,460
)


N/A


$
(3,641
)


N/AAmounts recognized in
    accumulated other comprehensive incomeUnrecognized net actuarial loss

$
9,560



N/A



1,855



N/AUnrecognized prior service cost

$
72



N/A



(72
)


N/AUnrecognized transition obligation

$




N/A







N/AEstimated amounts of
    accumulated other comprehensive to be recognized as net periodic
    cost during 2007Net actuarial loss

$
662



N/A


$
193



N/APrior service cost

$
22



N/A


$
(22
)


N/AWeighted-average
    assumptionsDiscount rateComponents of cost


5.50
%


6.00
%


5.50
%


6.00
%Benefit obligations


5.75
%


5.50
%


5.75
%


5.50
%Expected return on plan assets


8.00
%


8.00
%


N/A



N/ARate of compensation increase


4.00
%


4.00
%


4.00
%


4.00
%   Postretirement
    Benefits
   69




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
          2007

$
822008


972009


1142010


1282011


1412012-2016


807$
1,369     Net Periodic Cost

2006


2005


2004Service cost of benefits

$
36


$
36


$
31Interest cost


83



73



63Expected return on plan assets










Amortization of net actuarial loss


47



32



23Amortization of prior service cost










Total

$
166


$
141


$
117  70




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
    Postretirement PlanSeptember 30,2006


2005Change in benefit obligation
    during the periodAt beginning of period

$
1,159


$
1,338Service cost


36



36Interest cost


83



73Plan participants
    contributions


28



13Actuarial loss (gain)


349



(253
)Benefits paid


(120
)


(48
)At end of period

$
1,535


$
1,159Change in fair value of plan
    assetsAt beginning of period

$



$
Actual return on plan assets






Employer contribution


92



35Plan participants
    contributions


28



13Benefits paid


(120
)


(48
)At end of period

$



$
Funded status

$
(1,535
)

$
(1,159
)Contributions between measurement
    date and year end


13



N/ANet postretirement liability at
    fiscal year end

$
(1,522
)


N/AAmounts recognized in
    accumulated other comprehensive incomeUnrecognized net actuarial loss


634



N/AUnrecognized prior service cost






N/AUnrecognized transition obligation






N/AEstimated amounts of
    accumulated other comprehensive to be recognized as net periodic
    cost during 2007Net actuarial loss

$
46



N/APrior service cost

$




N/AWeighted-average
    assumptionsDiscount rateComponents of cost


5.50
%


6.00
%Benefit obligations


5.75
%


5.50
%Expected return on plan assets






Rate of compensation increase


4.00
%


4.00
%    71




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
   401(k)
    Plan
    15.
    Share-Based
    Compensation    Year EndedDecember 31, 2006Cost of revenue

$
567Selling, general and administrative


5,244Research and development


392Operating income (loss)


(6,203
)Income (loss) before income tax
    expense


(6,203
)Net income (loss)

$
(3,885
)Basic earnings per
    weighted-average common share

$
(0.13
)Diluted earnings per
    weighted-average common share

$
(0.13
)Net cash used by operating
    activities

$
(1,875
)Net cash provided by financing
    activities

$
1,875        72




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##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
        Stock
    Options
  10-year 10-year
      2006Expected volatility

26.59 - 27.35%Expected dividends

1.00%Expected term (in years)

5.25 - 6.25Risk-free rate

4.35 - 5.01%Weighted-average volatility

27.32Weighted-average term (in years)

5.74Weighted-average risk-free rate

4.70Weighted-average grant date fair
    value

$12.55  73




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
    Weighted-AverageWeighted-


Remaining


AggregateAverage


Contractual


Intrinsic ValueOptions

Shares


Exercise Price


Term (Years)


($000)Outstanding at January 1, 2006


2,416,733


$
34.97Granted


308,613



39.60Exercised


(583,688
)


31.15Forfeited or expired


(39,062
)


31.70Outstanding at December 31,
    2006


2,102,596


$
36.75



6.19


$
14,034Vested or expected to vest at
    December 31, 2006


2,095,990


$
36.76



6.19


$
14,020Exercisable at December 31,
    2006


1,455,609


$
35.38



5.17


$
11,735     Nonvested
    Share Awards
    Weighted-AverageGrant-Date FairNonvested Share Awards

Shares


ValueOutstanding at January 1, 2006


14,250


$
40.90Granted


89,482



38.59Vested


(15,958
)


39.13Forfeited






Nonvested at December 31, 2006


87,774


$
38.87Expected to vest at
    December 31, 2006


87,774


$
38.87    74




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
   Deferred
    Stock Units
    Weighted-AverageGrant-Date FairNonvested Deferred Stock Units

Shares


ValueOutstanding at January 1, 2006






Granted


25,450



38.58Vested


(7,264
)


37.83Forfeited






Nonvested at December 31, 2006


18,186


$
38.88Vested at December 31, 2006


19,349


$
39.12Expected to vest at
    December 31, 2006


18,186


$
38.88     Employee
    Stock Purchase Plan
    16.
    Significant
    Customers and Concentration of Credit Risk    17.
    Financial
    Instruments   75




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
    18.
    Stock
    Repurchases      19.
    Enterprise-Wide
    Information    For the Year Ended December 31,2006


2005


2004Service RevenuesRadio audience measurement services

$
253,042


$
237,176


$
226,363Local market consumer information
    services


43,181



40,240



42,549Software applications


33,027



32,539



27,641Total revenues

$
329,250


$
309,955


$
296,553     For the Year Ended December 31,

United States


International(1)


Total2006Revenues

$
315,208


$
14,042


$
329,2502005Revenues

$
297,887


$
12,068


$
309,9552004Revenues

$
284,117


$
12,436


$
296,553     (1)
    
    The revenues of the individual countries comprising these
    amounts are not significant to require separate disclosure. 76




---



##### Table of Contents



ARBITRON INC.
  Notes to Consolidated Financial
    Statements  (Continued)
   20.  Quarterly
    Information (Unaudited) (dollars in thousands, except per share
    data)
  Three Months EndedMarch 31


June 30


September 30


December 312006Revenue

$
85,088


$
74,165


$
90,714


$
79,283Gross profit


60,833



37,481



63,939



37,295Net income

$
18,186


$
7,360


$
20,190


$
4,922Net income per weighted average
    common shareBasic

$
0.59


$
0.25


$
0.69


$
0.17Diluted

$
0.58


$
0.24


$
0.69


$
0.17Dividends per common share

$
0.10


$
0.10


$
0.10


$
0.102005Revenue

$
79,195


$
69,816


$
85,615


$
75,329Gross profit


58,778



39,947



59,770



40,960Net income

$
19,836


$
15,395


$
20,901


$
11,176Net income per weighted average
    common shareBasic

$
0.64


$
0.49


$
0.67


$
0.36Diluted

$
0.63


$
0.48


$
0.66


$
0.36Dividends per common share

$
0.10


$
0.10


$
0.10


$
0.10    77




---



##### Table of Contents



Arbitron
    Inc.Consolidated Schedule of Valuation and Qualifying
    AccountsFor the Years Ended December 31, 2006, 2005 and 2004 (In
    thousands)
  2006


2005


2004Allowance for doubtful trade
    accounts receivable:Balance at beginning of year

$
1,165


$
1,124


$
1,081Additions charged to expenses


890



426



305Write-offs net of recoveries


(636
)


(385
)


(262
)Balance at end of year

$
1,419


$
1,165


$
1,124  78




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES Evaluation
    of Disclosure Controls and Procedures  Rules 13a-15(e) 15d-15(e)
 Managements
    Report on Internal Control Over Financial Reporting  Rule 13a-15(f)
 Changes
    in Internal Control Over Financial Reporting   ITEM 9B.  OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   79




---



##### Table of Contents



ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS      Number ofsecuritiesNumber of


Weighted-


remaining availablesecurities to be


average exercise


for future issuanceissued upon


price of


under equityexercise of


outstanding


compensationoutstanding


options,


plans (excludingoptions, warrants


warrants and


securities reflectedand rights


rights


in column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved
    by security holders


2,035,220


$
36.80



389,341Equity compensation plans not
    approved by security holders


192,686


$
37.82



76,437Totals


2,227,906


$
36.89



465,778   ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE     80




---



##### Table of Contents



ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES      
    Independent Registered Public Accounting Firm Reports
    Consolidated Balance Sheets as of December 31, 2006 and 2005
    Consolidated Statements of Income for the Years Ended
    December 31, 2006, 2005 and 2004
    Consolidated Statements of Stockholders Equity (Deficit)
    for the Years Ended December 31, 2006, 2005 and 2004
    Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2006, 2005 and 2004
    Notes to Consolidated Financial Statements for the Years Ended
    December 31, 2006, 2005 and 2004      Exhibit No.

Description3
.1

Restated Certificate of
    Incorporation of Arbitron Inc. (formerly known as Ceridian
    Corporation) (Filed as Exhibit 4.01 to Ceridians
    Registration Statement on
    Form S-8
    (File
    No. 33-54379)
    and incorporated herein by reference).3
.2

Certificate of Amendment of
    Restated Certificate of Incorporation of Arbitron Inc. (formerly
    known as Ceridian Corporation) (Filed as Exhibit 3 to
    Ceridians Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 1996 and incorporated herein
    by reference).3
.3

Certificate of Amendment of
    Restated Certificate of Incorporation of Arbitron Inc. (formerly
    known as Ceridian Corporation) (Filed as Exhibit 3.01 to
    Ceridians Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 1999 and incorporated herein
    by reference).3
.4

Certificate of Amendment to
    Restated Certificate of Incorporation of Arbitron Inc. (formerly
    known as Ceridian Corporation) (Filed as Exhibit 3.4 to
    Arbitrons Annual Report on
    Form 10-K
    for the year ended December 31, 2000 and incorporated
    herein by reference).3
.5

First Amended and Restated Bylaws
    of Arbitron Inc., effective as of August 29, 2002 (Filed as
    Exhibit 3.1 to Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2002 and incorporated
    herein by reference).4
.1

Specimen of Common Stock
    Certificate (Filed as Exhibit 4.1 to Arbitrons Annual
    Report on
    Form 10-K
    for the year ended December 31, 2000 and incorporated
    herein by reference). 81




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##### Table of Contents



Exhibit No.

Description4
.2

Rights Agreement, dated as of
    November 21, 2002, between Arbitron and The Bank of New
    York, as Rights Agent, which includes the form of Certificate of
    Designation of the Series B Junior Participating Preferred
    Stock as Exhibit A, the Summary of Rights to
    Purchase Series B Junior Participating Preferred Shares as
    Exhibit B and the Form of Rights Certificate as
    Exhibit C (Filed as Exhibit 99.1 to
    Arbitrons
    Form 8-K,
    filed November 21, 2002 and incorporated herein by
    reference).4
.3

Amendment No. 1 to Rights
    Agreement, dated as of January 31, 2007, between Arbitron
    and The Bank of New York, as Rights Agent.10
.1

Distribution Agreement, dated as
    of February 14, 2001, between Arbitron Inc. (formerly known
    as Ceridian Corporation) and Ceridian Corporation (formerly
    known as New Ceridian Corporation) (Filed as Exhibit 10.1
    to New Ceridians Registration Statement on Form 10
    (SEC File
    No. 001-16149)
    and incorporated herein by reference).10
.2

Personnel Agreement, dated as of
    February 14, 2001, between Arbitron Inc. (formerly known as
    Ceridian Corporation) and Ceridian Corporation (formerly known
    as New Ceridian Corporation) (Filed as Exhibit 10.2 to New
    Ceridians Registration Statement on Form 10 (SEC File
    No. 001-16149)
    and incorporated herein by reference).10
.3

Tax Matters Agreement, dated as of
    February 14, 2001, between Arbitron Inc. (formerly known as
    Ceridian Corporation) and Ceridian Corporation (formerly known
    as New Ceridian Corporation) (Filed as Exhibit 10.3 to New
    Ceridians Registration Statement on Form 10 (SEC File
    No. 001-16149)
    and incorporated herein by reference).10
.4

Transition Services Agreement,
    dated as of February 14, 2001, between Arbitron Inc.
    (formerly known as Ceridian Corporation) and Ceridian
    Corporation (formerly known as New Ceridian Corporation) (Filed
    as Exhibit 10.4 to New Ceridians Registration
    Statement on Form 10 (SEC File
    No. 001-16149)
    and incorporated herein by reference).10
.5

Sublease Agreement, dated as of
    February 14, 2001, between Arbitron Inc. (formerly known as
    Ceridian Corporation) and Ceridian Corporation (formerly known
    as New Ceridian Corporation) (Filed as Exhibit 10.5 to New
    Ceridians Registration Statement on Form 10 (SEC File
    No. 001-16149)
    and incorporated herein by reference).10
.6

Note Purchase Agreement,
    January 31, 2001, by and among Arbitron Inc. and the
    Note Holders referred to therein (Filed as
    Exhibit 10.7 to Arbitrons Annual Report on
    Form 10-K
    for the year ended December 31, 2000 and incorporated
    herein by reference).10
.7

First Amendment to
    Note Purchase Agreement, dated as of March 29, 2001
    (Filed as Exhibit 10.1 to Arbitrons Quarterly Report
    on
    Form 10-Q
    for the quarter ended June 30, 2005 and incorporated herein
    by reference),10
.8

Second Amendment to
    Note Purchase Agreement, dated as of June 10, 2002
    (Filed as Exhibit 10.2 to Arbitrons Quarterly Report
    on
    Form 10-Q
    for the quarter ended June 30, 2005 and incorporated herein
    by reference).10
.9

Third Amendment to
    Note Purchase Agreement, dated as of June 2, 2005
    (Filed as Exhibit 99.1 to Arbitrons Current Report on
    Form 8-K,
    dated June 16, 2005 and incorporated herein by reference).10
.10

Secured Subordinated Promissory
    Notes maturing January 31, 2008 of Arbitron Inc. (Filed as
    Exhibit 10.8 to Arbitrons Annual Report on
    Form 10-K
    for the year ended December 31, 2000 and incorporated
    herein by reference).10
.11

Subsidiary Guaranty, dated as of
    January 31, 2001, of Arbitron Holdings Inc. in favor of the
    Lenders referred to therein, the Swap Provider referred to
    therein and the Note Holders referred to therein (Filed as
    Exhibit 10.9 to Arbitrons Annual Report on
    Form 10-K
    for the year ended December 31, 2000 and incorporated
    herein by reference)10
.12

Arbitron Executive Investment Plan
    (Filed as Exhibit 10.10 to Arbitrons Annual Report on
    Form 10-K
    for the year ended December 31, 2004 and incorporated
    herein by reference).*10
.13

Arbitron Inc. 1999 Stock Incentive
    Plan (Filed as Exhibit 10.10 to Arbitrons Annual
    Report on
    Form 10-K
    for the year ended December 31, 2000 and incorporated
    herein by reference).*10
.14

Form of Non-Qualified Stock Option
    Agreement (Filed as Exhibit 10.1 to Arbitrons Current
    Report on
    Form 8-K,
    dated February 23, 2005 and incorporated herein by
    reference).* 82




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##### Table of Contents



Exhibit No.

Description10
.15

Form of Non-Qualified Stock Option
    Agreement for Annual Non-Employee Director Stock Option Grants
    (Filed as Exhibit 10.2 to Arbitrons Current Report on
    Form 8-K,
    dated February 23, 2005 and incorporated herein by
    reference).*10
.16

Form of Non-Qualified Stock Option
    Agreement for Initial Non-Employee Director Stock Option Grants
    (Filed as Exhibit 10.3 to Arbitrons Current Report on
    Form 8-K,
    dated February 23, 2005 and incorporated herein by
    reference).*10
.17

Form of Non-Qualified Stock Option
    Agreement in Lieu of Fees Grants (Filed as Exhibit 10.4 to
    Arbitrons Current Report on
    Form 8-K,
    dated February 23, 2005 and incorporated herein by
    reference).*10
.18

Amended and Restated Arbitron Inc.
    Director Deferred Compensation Procedures. (Filed as
    Exhibit 10.18 to Arbitrons Annual Report on
    Form 10-K
    for the year ended December 31, 2005 and incorporated
    herein by reference)*10
.19

Form of Deferred Stock Unit
    Agreement for Non-Employee Directors (Non-Employee Director
    Post-2005
    Stock-for-Fees
    Deferred Stock Unit). (Filed as Exhibit 10.19 to
    Arbitrons Annual Report on
    Form 10-K
    for the year ended December 31, 2005 and incorporated
    herein by reference)*10
.20

Arbitron Inc. Benefit Equalization
    Plan (Filed as Exhibit 10.20 to Arbitrons Annual
    Report on
    Form 10-K
    for the year ended December 31, 2004 and incorporated
    herein by reference).*10
.21

Arbitron Inc. 2001 Broad Based
    Stock Incentive Plan (Filed as Exhibit 10.14 to
    Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2002 and incorporated
    herein by reference).10
.22

Executive Employment Agreement,
    dated April 1, 2001, by and between Arbitron Inc. and
    Stephen B. Morris (Filed as Exhibit 10.15 to
    Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2001 and incorporated
    herein by reference).*10
.23

Amendment No. 1 to the
    Executive Employment Agreement between Arbitron Inc. and Stephen
    B. Morris (Filed as Exhibit 10.18 to Arbitrons
    Annual Report on
    Form 10-K
    for the year ended December 31, 2001 and incorporated
    herein by reference).*10
.24

Amendment No. 2 to the
    Executive Employment Agreement between Arbitron Inc. and Stephen
    B. Morris (Filed as Exhibit 10.19 to Arbitrons
    Annual Report on
    Form 10-K
    for the year ended December 31, 2001 and incorporated
    herein by reference).*10
.25

Form of Executive Retention
    Agreement (Filed as Exhibit 10.20 to Arbitrons Annual
    Report on
    Form 10-K
    for the year ended December 31, 2001 and incorporated
    herein by reference).*10
.26

Customer Contract, dated as of
    December 27, 2004, by and between Arbitron Inc. and Clear
    Channel Communications, Inc. (Filed as Exhibit 10.26 to
    Arbitrons Annual Report on
    Form 10-K
    for the year ended December 31, 2004 and incorporated
    herein by reference).10
.27

1999 Stock Incentive Plan Form of
    Restricted Stock Agreement (Filed as Exhibit 10.1 to
    Arbitrons Current Report on
    Form 8-K,
    dated February 22, 2006 and incorporated herein by
    reference).*10
.28

CEO Deferral Election Form for
    Restricted Stock (Filed as Exhibit 10.1 to Arbitrons
    Current Report on
    Form 8-K,
    dated March 28, 2006 and incorporated herein by reference).*10
.29

CEO Deferred Stock Unit Agreement,
    entered into and effective as of March 31, 2006, by and
    between the Company and Stephen B. Morris. (Filed as
    Exhibit 10.2 to Arbitrons Current Report on
    Form 8-K,
    dated March 28, 2006 and incorporated herein by reference).*10
.30

Form of Executive Retention
    Agreement (Filed as Exhibit 10.1 to Arbitrons Current
    Report on
    Form 8-K,
    dated June 5, 2006 and incorporated herein by reference).*10
.31

Amendment No. 3 to the
    Executive Employment Agreement between Arbitron Inc. and Stephen
    B. Morris (Filed as Exhibit 10.1 to Arbitrons
    Current Report on
    Form 8-K,
    dated July 3, 2006 and incorporated herein by reference).*10
.32

Credit Agreement dated as of
    December 20, 2006 by and among Arbitron Inc., and the
    Note Holders referred to therein (Filed as
    Exhibit 10.1 to Arbitrons Current Report on
    Form 8-K,
    dated December 20, 2006 and incorporated herein by
    reference).10
.33

Amended and Restated Director
    Compensation Schedule (Filed as Exhibit 10.1 to
    Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2006 and incorporated
    herein by reference.) 83




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##### Table of Contents



Exhibit No.

Description10
.34

Radio Station License Agreement to
    Receive and Use Arbitron PPM Data and Estimates, effective
    May 18, 2006, by and between the Company and CBS Radio Inc.
    (Filed as Exhibit 10.2 to Arbitrons Quarterly Report
    on
    Form 10-Q
    for the quarter ended June 30, 2006 and incorporated herein
    by reference.)10
.35

Master Station License Agreement
    to Receive and Use Arbitron Radio Audience Estimates, effective
    May 18, 2006, by and between the Company and CBS Radio Inc.
    (Filed as Exhibit 10.3 to Arbitrons Quarterly Report
    on
    Form 10-Q
    for the quarter ended June 30, 2006 and incorporated herein
    by reference.)10
.36

LLC Agreement for Project Apollo
    between Nielsen Media Research, Inc., a subsidiary of The
    Nielsen Company and Arbitron Inc.**21


Subsidiaries of Arbitron Inc.23


Consent of Independent Registered
    Public Accounting Firm.24


Power of Attorney.31
.1

Certification of the Chief
    Executive Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of  2002.31
.2

Certification of the Chief
    Financial Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of  2002.32
.1

Certification of the Chief
    Executive Officer and Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Indicates management contract or compensatory plan, contract or
    arrangement required to be filed as an Exhibit. **
    
    A request for confidential treatment has been submitted with
    respect to this exhibit. The copy filed as an exhibit omits the
    information subject to the request for confidential treatment.         84




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##### Table of Contents



SIGNATURES      By:
    /s/  Stephen
    B. Morris         Signature

Title

Date/s/  Stephen
    B. MorrisStephen
    B. Morris

Chief Executive Officer, President
    and Director (Principal Executive Officer)

February 27, 2007/s/  Sean
    R. CreamerSean
    R. Creamer

Executive Vice President of
    Finance and Planning and Chief Financial Officer (Principal
    Financial and Principal Accounting Officer)

February 27, 2007*Alan
    W. Aldworth

Director*Shellye
    L. Archambeau

Director*Philip
    Guarascio

Director*Larry
    E. Kittelberger

Director*Luis
    B. Nogales

Director*Lawrence
    Perlman

Director*Richard
    A. Post

Director*By:

/s/  Timothy
    T. SmithTimothy
    T. SmithAttorney-in-Fact



February 27, 2007  85