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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, 2008oro

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.)   9705 Patuxent Woods Drive
 Columbia, Maryland 21046
 (Address of principal executive
    offices) (zip code)
  (410) 312-8000
 (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
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
 Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company 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


7Overview


7Corporate Strategy


8Industry Background and Markets


8Radio Audience Measurement
    Services


9Diary Service


9Portable People Meter Service


11Radio Market Report and Other Data
    Services


16Local Market Consumer Information
    Services


17International Operations


18Customers, Sales and Marketing


18Competition


19Intellectual Property


20Research and Development


21Governmental Regulation


21Employees


22Seasonality


22Available Information


23ITEM 1A.


RISK FACTORS


23Risk Factors Relating to Our Business
    and the Industry in Which We Operate


23Risk Factors Relating to Our
    Indebtedness


32Risk Factors Relating to Owning Our
    Common Stock


32ITEM 1B.


UNRESOLVED STAFF COMMENTS


33ITEM 2.


PROPERTIES


33ITEM 3.


LEGAL PROCEEDINGS


33ITEM 4.


SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


36PART IIITEM 5.


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


36ITEM 6.


SELECTED FINANCIAL DATA


38ITEM 7.


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


39Overview


39General Economic Conditions


40Lawsuits and Governmental
    Interactions


40Discontinued Operation


40Project Apollo Affiliate
    Termination


40Impact of Hurricane Ike


41Stock Repurchases


41Critical Accounting Policies and
    Estimates


41Results of Operations


43Liquidity and Capital Resources


50Off-Balance Sheet Arrangements


53New Accounting Pronouncements


53ITEM 7A.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


53ITEM 8.


FINANCIAL STATEMENTS AND SUPPLEMENTARY
    DATA


53ITEM 9.


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
    ON ACCOUNTING AND FINANCIAL DISCLOSURE


91ITEM 9A.


CONTROLS AND PROCEDURES


91Evaluation of Disclosure Controls and
    Procedures


91Managements Report on Internal
    Control Over Financial Reporting


91Changes in Internal Control Over
    Financial Reporting


91ITEM 9B.


OTHER INFORMATION


91 2




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Page No.PART IIIITEM 10.


DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


92ITEM 11.


EXECUTIVE COMPENSATION


93ITEM 12.


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


93ITEM 13.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    AND DIRECTOR INDEPENDENCE


93ITEM 14.


PRINCIPAL ACCOUNTANT FEES AND SERVICES


92PART IVITEM 15.


EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES


92SIGNATURES


97Exhibit 3.5EX-10.12Exhibit 10.13Exhibit 10.25EX-21EX-23EX-24EX-31.1EX-31.2EX-32.1   3




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Arbitrendssm ® RADAR ® TAPSCAN tm TAPSCAN
    WORLDWIDE tm LocalMotion®,

    Maximi$er®,

    Maximi$er®

    Plus Arbitron PD
    Advantage ® SmartPlus® Arbitron Portable People
    Meter tm PPM tm ,

    Arbitron
    PPMtm ® sm ® ,

    MapMAKER
    Direct sm Media Professional , Media Professional
    Plus sm QUALITAP sm Schedule-It sm
  Windows ® ® Form 10-K
   4




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FORWARD-LOOKING
    STATEMENTS  Form 10-K.
    Form 10-K
  
    absorb costs related to legal proceedings and governmental
    entity interactions and avoid related fines, limitations, or
    conditions on our business activities;
    successfully commercialize our Portable People
    Metertm

    service;
    successfully manage the impact on our business of the current
    economic downturn generally, and in the advertising market, in
    particular, including, without limitation, the insolvency of any
    of our customers or the impact of such downturn on our
    customers ability to fulfill their payment obligations to
    us;
    successfully maintain and promote industry usage of our
    services, a critical mass of broadcaster encoding, and the
    proper understanding of our audience measurement services and
    methodology in light of governmental regulation, legislation,
    litigation, activism, or adverse public relations efforts;
    compete with companies that may have financial, marketing,
    sales, technical, or other advantages over us;
    successfully design, recruit and maintain PPM panels that
    appropriately balance research quality, panel size, and
    operational cost;
    successfully develop, implement, and fund initiatives designed
    to increase sample sizes;
    complete the Media Rating Council, Inc. (MRC) audits
    of our local market PPM ratings services in a timely manner and
    successfully obtain
    and/or
    maintain MRC accreditation for our audience measurement business;
    renew contracts with key customers;
    successfully execute our business strategies, including entering
    into potential acquisition, joint-venture or other material
    third-party agreements;
    effectively manage the impact, if any, of any further ownership
    shifts in the radio and advertising agency industries;
    effectively respond to rapidly changing technological needs of
    our customer base, including creating new proprietary software
    systems, such as software systems to support our cell phone-only
    sampling plans, and new customer services that meet these needs
    in a timely manner;
    successfully manage the impact on costs of data collection due
    to lower respondent cooperation in surveys, consumer trends
    including a trend toward increasing incidence of cell phone-only
    households, privacy concerns, technology changes,
    and/or
    government regulations; and
    successfully develop and implement technology solutions to
    encode
    and/or
    measure new forms of media content and delivery, and advertising
    in an increasingly competitive environment.   5




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6




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PART I  ITEM 1.
    BUSINESS  (410) 312-8000.
 Overview    
    measuring and estimating radio audiences in local markets in the
    United States;
    measuring and estimating radio audiences of network radio
    programs and commercials;
    providing software used for accessing and analyzing our media
    audience and marketing information data; and
    providing consumer, shopping, and media usage information
    services.          Form 10-K.
 7




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Corporate
    Strategy    
    Improving customer relations.  We intend to
    continue to invest in quality improvements in our radio audience
    measurement services and engage with our customers, listen to
    and understand their needs and requirements and provide
    solutions that are competitive on price, quality and value.
    Diversifying revenues.  We believe that growth
    opportunities exist in adjacent markets and intend to seek to
    expand our customer base by developing and marketing new
    information services designed to assist customers in
    implementing marketing strategies.
    Building on our experience in the radio audience measurement
    industry and our PPM technology to expand into information
    services for other types of media
    and/or
    multimedia.In some cases, we 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
    and/or
    multimedia.
    Developing and commercializing the next-generation data
    collection and processing techniques.Our
    businesses require sophisticated data collection and processing
    systems, software and other technology. The collection of our
    survey participant information in our diary-based radio ratings
    service 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 we will need to continue to attempt
    to develop our data collection, processing and software systems
    to accommodate these changes. The development of our PPM service
    is in response to a growing demand for higher quality, and more
    efficient and timely methods for measuring and reporting
    audiences.
    Addressing scale issues.  We compete against
    many companies that are larger and have greater capital and
    other resources. We will seek to explore strategic opportunities
    to expand our business and better enable us to compete with such
    companies.
    Expanding our international PPM business.  We
    continue to explore opportunities to license our PPM technology
    into selected international regions, such as Europe and the
    Asia/Pacific regions. We believe there is an international
    demand for quality audience information from global advertisers
    and media. Industry
    Background and Markets       8




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Radio
    Audience Measurement Services Diary
    Service  Collection of Listener Data Through Diary
    Methodology. seven-day follow-up
  Diary Service Quality Improvement
    Initiatives.
      18-34 years
 9




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18-34, 18-34
      18-54 18-54
  18-34.
 10




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Portable
    People Meter Service         11




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Domestic.
    Current Schedule


Prior Schedule


Final Diary SurveyScheduledInitial






Final



ScheduledInitial PPM

Period

Release


PPM

Period

Release


Diary

Period

ReleaseLocal Market


Report

Covered

Date


Report

Covered

Date


Survey

Covered

DateKansas City; San Antonio; Salt Lake City-Ogden-Provo; Las
    Vegas


December
    2009

November 12 -
    December 9

December
    2009


March 2010


March 4 -
    March 31


April
    2010


Summer
    2009

June 25 -
    September 16

October
    2009Milwaukee-Racine; Charlotte-Gastonia-Rock Hill; Columbus, OH;
    Providence-Warwick; Pawtucket; Orlando


September
    2010

August 19 -
    September 15

October
    2010


June 2010


May 27 -
    June 23


July
    2010


Spring
    2010

April 1 -
    June 23

July
    2010   Media
    Rating Council Accreditation
      Local Markets First Considered for Accreditation During 2006
    and 2007.
 12




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follow-up Form 10-K,
  Local Markets First Considered for Accreditation During
    2008.
        Collection of Listener Data Through PPM
    Methodology.
 13




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PPM Service Quality Improvement
    Initiatives. 18-54
  18-24
  wake-up 18-34
      18-54
 14




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18-34,
        International.
     15




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Radio
    Market Report and Other Data Services    and/or
    RADAR.
        Software Applications.
 16




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cost-per-point hour-by-hour
    Licensing of Respondent-Level Data.
 Local
    Market Consumer Information Services      
    the Scarborough Report, which is offered in larger markets;
    the RetailDirect Service, which is offered in medium
    markets; and
    the Qualitative Diary Service/LocalMotion Service, which is
    offered in smaller markets.    Scarborough Report.
   17




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RetailDirect Service.
  Qualitative Diary Service/LocalMotion
    Service.
  Custom Research Services. play-by-play
 International
    Operations  India.
  Portable People Meter. s
  CSW Research Limited (Continental
    Research). Form 10-K.
 18




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Customers,
    Sales and Marketing          
    conducting direct-marketing programs directed toward radio
    stations, cable companies, advertising agencies, television
    stations, out-of-home companies, broadcast groups and corporate
    advertisers;
    promoting Arbitron and the industries we serve 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;
    gathering and publishing studies, which are available for no
    charge on our Web site, on national summaries of radio
    listening, emerging trends in the radio industry, Internet
    streaming, out-of-home and other media industries, as well as
    the media habits of radio listeners and television, cable and
    Internet viewers;
    participating in key industry and government forums, trade
    association meetings, 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 European Society
    for Opinion and Marketing Research, the Television Bureau of
    Advertising, the Cabletelevision Advertising Bureau, American
    Women in Radio and Television, Women in Cable
    Telecommunications, the Cable & Telecommunications
    Association for Marketing, the National Association of Black
    Owned Broadcasters, Minority Media and Telecommunications
    Council, Media Rating Council, Committee on Local Radio Audience
    Measurement, Committee on Local Television Audience Measurement,
    national Radio Research Committee and the Outdoor Advertising
    Association of America, as well as numerous state and local
    advertising and broadcaster associations;
    participating in activities and strengthening relationships with
    national and local chapters of grassroots organizations, such as
    the National Council of La Raza, the National Urban League,
    the National Association for the Advancement of Colored People,
    and the Rainbow/PUSH Coalition; and
    maintaining a 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 Advertising Research Foundation, the
    Cable Advertising Bureau and the Outdoor Advertising Association
    of America. Competition     19




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Intellectual
    Property           20




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Research
    and Development   Governmental
    Regulation     21




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Radio Market Report Radio Market Repor quarter-hour quarter-hour quarter-hour
       Employees   Seasonality   22




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Available
    Information  Form 10-K, Form 10-Q, Form 8-K, www.sec.gov
   ITEM 1A.  RISK
    FACTORS Risk
    Factors Relating to Our Business and the Industry in Which We
    Operate  Our future growth and success will depend on our ability
    to compete successfully with companies that may have financial,
    marketing, technical, and other advantages over us.
   23




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If the domestic and worldwide recession continues or
    intensifies it could adversely impact demand for our services,
    our customers revenues or their ability to pay for our
    services.
      If the domestic and worldwide recession continues or
    intensifies, potential disruptions in the credit markets may
    adversely affect our business, including the availability and
    cost of short-term funds for liquidity requirements and our
    ability to meet long-term commitments, which could adversely
    affect our results of operations, cash flows, and financial
    condition.
      Our business, financial position, and operating results
    are dependent on the performance of our quantitative radio
    audience measurement business.
    Costs associated with significant legal proceedings may
    adversely affect our results of operations.
   24




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We are subject to governmental oversight, which may harm
    our business.
      We may fail to attract or retain the qualified research,
    sales, marketing, and managerial personnel, and key executive
    officers required to operate our business successfully.
    If we do not successfully manage the transitions
    associated with our new CEO, it could have an adverse impact on
    our revenues, operations, or results of operations.
        If our PPM ratings service does not generate the revenues
    that we anticipate, or if our ability to earn such revenues is
    delayed for any reason, our financial results will
    suffer.
      
    increased government oversight or regulation;
    the acceptance of the PPM ratings service by broadcasters,
    advertisers and other users of our estimates;
    the impact of general economic conditions on our customers
    ability to pay increased license fees;
    the speed with which we can complete the MRC audit process,
    share the results of the audit with the MRC PPM audit committee,
    and disclose parallel pre-currency impact data in
    each local radio market; 25




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
    technical difficulties or service interruptions that impair our
    ability to deliver the PPM ratings service on schedule; and
    our ability to obtain, in a timely manner, sufficient quantities
    of quality equipment and software products from third-party
    suppliers necessary to outfit our panelists.  We may be unsuccessful in obtaining and maintaining MRC
    accreditation for our local market radio ratings services, and
    we may be required to expend significant resources in order to
    obtain and maintain MRC accreditation for our local market PPM
    radio ratings services, any of which could adversely impact our
    business.
    quarter-hour
  Criticism of our audience measurement service by various
    governmental entities, industry groups, and market segments
    could adversely impact our business.
    We have limited experience designing, recruiting and
    maintaining PPM panels. If we are unable to design, recruit, and
    maintain PPM panels that appropriately balance research quality,
    panel size and operational cost, our financial results will
    suffer.
       26




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and/or
  We expect to invest in the continued development and
    commercialization of our PPM ratings service, which may not
    ultimately be successfully commercialized. The costs associated
    with commercialization of this service will adversely impact our
    operating results and operating margins over the
    commercialization period.
      The success of commercialization of the PPM ratings
    service is dependent on a single manufacturer who produces the
    PPM equipment according to our proprietary design as well as on
    those who manufacture parts.
    Technological change may render our services obsolete and
    it may be difficult for us to develop new services or enhance
    existing ones.
  and/or
 27




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We are dependent on our proprietary software and hardware
    systems for current and future business requirements.
    Significant delays in the completion of these systems, cost
    overages
    and/or
    inadequate performance or failure of the systems once completed
    could adversely impact our business, financial position and
    operating results.
      Defects or disruptions in our Internet-based software
    services could diminish demand for our services and subject us
    to substantial liability.
    Interruptions, delays, or unreliability in the delivery of
    our services could adversely affect our reputation and reduce
    our revenues.
    We expect to continue to invest in the improvement of our
    Diary ratings service. The costs associated with such investment
    will adversely impact our operating results over the
    commercialization period.
   28




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The loss of any of our key customers would significantly
    reduce our revenue and operating results.
        Ownership shifts in the radio broadcasting industry may
    put pressure on the pricing of our quantitative radio audience
    measurement service and related software sales, thereby leading
    to decreased earnings growth.
    Our agreements with our customers are not exclusive and
    contain no renewal obligations. The failure of our customers to
    renew all or part of their contracts could have an adverse
    impact on our business, financial position and operating
    results.
    Long-term agreements with our customers limit our ability
    to increase the prices we charge for our services if our costs
    increase.
    The success of our radio audience measurement business
    depends on diarykeepers who record their listening habits in
    diaries and return these diaries to us and panelists who carry
    our PPM meters. Our failure to collect these diaries and to
    recruit compliant participants could adversely impact our
    business.
   29




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Data collection costs are increasing faster than our
    contracted revenue growth rates and if we are unable to become
    more efficient in our data collection and our management of
    associated costs, our operating margins and results of
    operations could suffer.
      Our ability to recruit participants for our surveys could
    be adversely impacted by governmental regulations.
    The license of enhanced access to our respondent-level
    data to third-party data processors and customers could
    adversely impact the revenue derived from our existing software
    licenses.
    Our success will depend on our ability to protect our
    intellectual property rights and we incur substantial expense to
    enforce our intellectual property rights which could adversely
    affect our business.
    
    obtaining patent protection for our technology, proprietary
    methods, and services, in particular, our PPM service;
    defending our patents once obtained;
    preserving our trade secrets;
    defending our copyrights for our data services and audience
    estimates; and
    operating without infringing upon patents and proprietary rights
    held by others. 30




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Advertisers are pursuing increased accountability from the
    media industry for their return on investments made in media
    which could reduce demand for our services.
    We rely on third parties to provide data and services in
    connection with our current business and we may require
    additional third-party data and services to expand our business
    in the future, which, if available, could adversely impact our
    business.
    Long-term disruptions in the mail, telecommunication
    infrastructure
    and/or air
    service could adversely impact our business.
  and/or
  If our subsidiary in India is not successful, we may incur
    losses.
    If lump- sum payments made to retiring participants in our
    defined benefit pension plans exceed the total of the service
    cost and the interest cost in a calendar year, we would need to
    recognize the pro rata portion of unrecognized actuarial gain or
    loss equal to the percentage reduction of the projected benefit
    obligation, which may result in an adjustment that could
    materially reduce operating results.
  Employers
    Accounting for Settlements and Curtailments of Defined Benefit
    Pension Plans and for Termination Benefits,
 31




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Form 10-K
  We intend to begin transitioning operations and production
    of our RADAR service from our offices in New Jersey to our
    headquarters in Maryland during 2009.
   Risk
    Factors Relating to Our Indebtedness



Our credit facility contains restrictive covenants that
    limit our financial flexibility, which could adversely affect
    our ability to conduct our business.



On December 20, 2006, we entered into a five-year,
    $150.0 million revolving credit facility that contains
    financial terms, covenants and operating restrictions that could
    restrict our financial flexibility and could adversely impact
    our ability to conduct our business. These include: 
    the requirement that we maintain certain leverage and coverage
    ratios; and
    restrictions on our ability to sell certain assets, incur
    additional indebtedness and grant or incur liens on our assets.       Risk
    Factors Relating to Owning Our Common Stock



Changes in market conditions, or sales of our common
    stock, could adversely impact the market price of our common
    stock.



The market price of our common stock depends on various
    financial and market conditions, which may change from time to
    time and which are outside of our control.



Sales of a substantial number of shares of our common stock, or
    the perception that such sales could occur, also could adversely
    impact prevailing market prices for our common stock. In
    addition to the possibility that we may sell shares of our
    common stock in a public offering at any time, we also may issue
    shares of common stock in connection with grants of restricted
    stock or upon exercise of stock options that we grant to our
    directors, officers and employees. All of these shares will be
    available for sale in the public markets from time to time.



It may be difficult for a third party to acquire us, which
    could depress the stock price of our common stock.



Delaware corporate law and our Amended and Restated Certificate
    of Incorporation and Bylaws contain provisions that could have
    the effect of delaying, deferring or preventing a change in
    control of Arbitron or the

32




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
    a stockholders rights plan, which likely will limit,
    through November 21, 2012, the ability of a third party to
    acquire a substantial amount of our 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
    that 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
    requirement of a supermajority vote of 80 percent of the
    stockholders to exercise the stockholders right to amend
    the Bylaws.    
    requirement of 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 our
    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   33




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and/or
    and/or
    New
    York
         34




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New
    Jersey
              Maryland
   35




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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      2008

1Q


2Q


3Q


4Q


Full YearHigh

$
46.24


$
51.50


$
50.87


$
44.69


$
51.50Low

$
38.49


$
43.15


$
43.98


$
9.90


$
9.90Dividend

$
0.10


$
0.10


$
0.10


$
0.10


$
0.40   2007

1Q


2Q


3Q


4Q


Full YearHigh

$
48.76


$
53.42


$
55.63


$
52.15


$
55.63Low

$
42.45


$
46.69


$
44.90


$
34.81


$
34.81Dividend

$
0.10


$
0.10


$
0.10


$
0.10


$
0.40      36




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Arbitron
    Purchases of Equity Securities
  Total Number

Maximum Dollar ValueTotal Number of

Average Price

of Shares Purchased

of Shares That MayShares

Paid

as Part of Publicly

Yet Be PurchasedPeriod

Purchased

Per Share

Announced Program

Under the ProgramOctober 1 - December 31





$







$
100,001,436  37




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ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K. Form 10-K. Form 10-K.
  As of and for the Years Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share data)Statement of Income DataRevenue

$
368,824


$
338,469


$
319,335


$
300,368


$
285,963Costs and expenses


312,359



279,187



243,386



206,718



195,254Operating income


56,465



59,282



75,949



93,650



90,709Equity in net income of affiliates


6,677



4,057



7,748



7,829



7,552Income from continuing operations before interest and income tax
    expense


63,142



63,339



83,697



101,479



98,261Interest (income) expense, net


1,593



(1,453
)


3,092



971



6,897Income from continuing operations before income tax expense


61,549



64,792



80,605



100,508



91,364Income tax expense


24,330



24,288



30,259



33,218



30,966Income from continuing operations


37,219



40,504



50,346



67,290



60,398Income (loss) from discontinued operations, net of taxes


(39
)


(324
)


312



18



167Net income

$
37,180


$
40,180


$
50,658


$
67,308


$
60,565Net Income Per Weighted Average Common ShareBasicContinuing operations

$
1.37


$
1.38


$
1.68


$
2.16


$
1.95Discontinued operations


(0.00
)


(0.01
)


0.01



0.00



0.01Net income per share, basic

$
1.37


$
1.37


$
1.69


$
2.16


$
1.96DilutedContinuing operations

$
1.37


$
1.37


$
1.67


$
2.14


$
1.92Discontinued operations


(0.00
)


(0.01
)


0.01



0.00



0.01Net income per share, diluted

$
1.36


$
1.35


$
1.68


$
2.14


$
1.92Cash dividends declared per share

$
0.40


$
0.40


$
0.40


$
0.40


$
Weighted average common shares used in calculationsBasic


27,094



29,399



29,937



31,179



30,972Diluted


27,259



29,665



30,086



31,500



31,471Balance Sheet DataCurrent assets

$
73,845


$
68,618


$
105,545


$
160,926


$
120,161Total assets


199,597



180,543



210,320



254,708



199,949Long-term debt, including the short-term portion thereof


85,000



12,000







50,000



50,000Stockholders equity (deficit)

$
(14,495
)

$
48,200


$
89,256


$
96,182


$
49,208Share-based Compensation DataShare-based compensation expense

$
8,415


$
6,532


$
6,545


$
426


$
188  38




---



##### Table of Contents



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           39




---



##### Table of Contents



General
    Economic Conditions     Lawsuits
    and Governmental Interactions   Discontinued
    Operation  Form 10-K.
 Project
    Apollo Affiliate Termination   40




---



##### Table of Contents



Impact of
    Hurricane Ike  
 Stock
    Repurchases   Critical
    Accounting Policies and Estimates    98-1,
    Accounting for Uncertainty in Income Taxes ), , Accounting for Income Taxes,
 41




---



##### Table of Contents



Form 10-K.
   42




---



##### Table of Contents



Results
    of Operations  Comparison
    of Year Ended December 31, 2008 to Year Ended
    December 31, 2007
    Consolidated
    Statements of Income
    (Dollars in thousands, except per share amounts)
    (Unaudited)
  Years Ended


Increase


Percentage ofDecember 31,


(Decrease)


Revenue2008


2007


Dollars


Percent


2008


2007Revenue

$
368,824


$
338,469


$
30,355



9.0
%


100.0
%


100.0
%Costs and expensesCost of revenue


185,632



157,175



28,457



18.1
%


50.3
%


46.4
%Selling, general and administrative


85,315



79,516



5,799



7.3
%


23.1
%


23.5
%Research and development


41,412



42,496



(1,084
)


(2.6
)%


11.2
%


12.6
%Total costs and expenses


312,359



279,187



33,172



11.9
%


84.7
%


82.5
%Operating income


56,465



59,282



(2,817
)


(4.8
)%


15.3
%


17.5
%Equity in net income of affiliates


6,677



4,057



2,620



64.6
%


1.8
%


1.2
%Income from continuing operations before interest and tax expense


63,142



63,339



(197
)


(0.3
)%


17.1
%


18.7
%Interest income


623



2,118



(1,495
)


(70.6
)%


0.2
%


0.6
%Interest expense


2,216



665



1,551



233.2
%


0.6
%


0.2
%Income from continuing operations before income tax expense


61,549



64,792



(3,243
)


(5.0
)%


16.7
%


19.1
%Income tax expense


24,330



24,288



42



0.2
%


6.6
%


7.2
%Income from continuing operations


37,219



40,504



(3,285
)


(8.1
)%


10.1
%


12.0
%Discontinued operationsLoss from discontinued operations, net of taxes


(462
)


(324
)


(138
)


42.6
%


(0.1
)%


(0.1
)%Gain on sale, net of taxes


423







423



NM



0.1
%


0.0
%Total loss from discontinued operations, net of taxes


(39
)


(324
)


285



(88.0
)%


(0.0
)%


(0.1
)%Net income

$
37,180


$
40,180


$
(3,000
)


(7.5
)%


10.1
%


11.9
%Income per weighted average common shareBasicContinuing operations

$
1.37


$
1.38


$
(0.01
)


(0.7
)%Discontinued operations






(0.01
)


0.01



Net income per share, basic

$
1.37


$
1.37


$




0.0
%DilutedContinuing operations

$
1.37


$
1.37


$




0.0
%Discontinued operations






(0.01
)


0.01



Net income per share, diluted

$
1.36


$
1.35


$
0.01



0.7
%Cash dividends declared per common share

$
0.40


$
0.40


$




      43




---



##### Table of Contents



Consolidated
    Statements of Income
    (Dollars in thousands, except per share amounts)
  Years Ended


IncreaseDecember 31,


(Decrease)2008


2007


Dollars


PercentOther data:EBIT(1)

$
63,142


$
63,339


$
(197
)


(0.3
)%EBITDA(1)

$
80,605


$
75,889


$
4,716



6.2
%EBIT and EBITDA Reconciliation(1)Income from continuing operations

$
37,219


$
40,504


$
(3,285
)


(8.1
)%Income tax expense


24,330



24,288



42



0.2
%Interest (income)


(623
)


(2,118
)


1,495



(70.6
)%Interest expense


2,216



665



1,551



233.2
%EBIT(1)


63,142



63,339



(197
)


(0.3
)%Depreciation and amortization


17,463



12,550



4,913



39.1
%EBITDA(1)

$
80,605


$
75,889


$
4,716



6.2
%     (1)
    
    EBIT (earnings before interest and income taxes) and EBITDA
    (earnings before interest, income taxes, depreciation and
    amortization) are non-GAAP financial measures that we believe
    are useful to investors in evaluating our results. For further
    discussion of these non-GAAP financial measures, see paragraph
    below entitled EBIT and EBITDA.  , (SFAS No. 88)
    Employers Accounting for Settlements and Curtailments of
    Defined Benefit Pension Plans and for Termination Benefits
  (Dollars in thousands)2008Cost of revenue

$
885Selling, general, and administrative


484Research and development


301Total costs and expenses

$
1,670   Revenue.
 44




---



##### Table of Contents



Cost of Revenue.
  Selling, General, and
    Administrative.
  Research and Development.
  Equity in Net Income of
    Affiliates.
  Interest Income.
  Interest Expense.
  Net Income.
  EBIT and EBITDA.
 45




---



##### Table of Contents



46




---



##### Table of Contents



Comparison
    of Year Ended December 31, 2007 to Year Ended
    December 31, 2006
    Consolidated
    Statements of Income
    (Dollars in thousands, except per share amounts)
  Percentage ofIncrease (Decrease)


Revenue2007


2006


Dollars


Percent


2007


2006Revenue

$
338,469


$
319,335


$
19,134



6.0
%


100.0
%


100.0
%Costs and expensesCost of revenue


157,175



120,698



36,477



30.2
%


46.4
%


37.8
%Selling, general and administrative


79,516



78,511



1,005



1.3
%


23.5
%


24.6
%Research and development


42,496



44,177



(1,681
)


(3.8
)%


12.6
%


13.8
%Total costs and expenses


279,187



243,386



35,801



14.7
%


82.5
%


76.2
%Operating income


59,282



75,949



(16,667
)


(21.9
)%


17.5
%


23.8
%Equity in net income of affiliates


4,057



7,748



(3,691
)


(47.6
)%


1.2
%


2.4
%Income from continuing operations before interest and tax expense


63,339



83,697



(20,358
)


(24.3
)%


18.7
%


26.2
%Interest income


2,118



3,010



(892
)


(29.6
)%


0.6
%


0.9
%Interest expense


665



6,102



(5,437
)


(89.1
)%


0.2
%


1.9
%Income from continuing operations before income tax expense


64,792



80,605



(15,813
)


(19.6
)%


19.1
%


25.2
%Income tax expense


24,288



30,259



(5,971
)


(19.7
)%


7.2
%


9.5
%Income from continuing operations


40,504



50,346



(9,842
)


(19.5
)%


12.0
%


15.8
%Income (loss) from discontinued operations, net of taxes


(324
)


312



(636
)






(0.1
)%


0.1
%Net income

$
40,180


$
50,658


$
(10,478
)


(20.7
)%


11.9
%


15.9
%Income per weighted average common shareBasicContinuing operations

$
1.38


$
1.68


$
(0.30
)


(17.9
)%Discontinued operations


(0.01
)


0.01



(0.02
)Net income per share, basic

$
1.37


$
1.69


$
(0.32
)


(18.9
)%DilutedContinuing operations

$
1.37


$
1.67


$
(0.30
)


(18.0
)%Discontinued operations


(0.01
)


0.01



(0.02
)Net income per share, diluted

$
1.35


$
1.68


$
(0.33
)


(19.6
)%Cash dividends declared per common share

$
0.40


$
0.40


$




    47




---



##### Table of Contents



Consolidated
    Statements of Income
    (Dollars in thousands, except per share amounts)
  Increase (Decrease)2007


2006


Dollars


PercentOther data:EBIT(1)

$
63,339


$
83,697


$
(20,358
)


(24.3
)%EBITDA(1)

$
75,889


$
93,089


$
(17,200
)


(18.5
)%EBIT and EBITDA Reconciliation(1)Income from continuing operations

$
40,504


$
50,346


$
(9,842
)


(19.5
)%Income tax expense


24,288



30,259



(5,971
)


(19.7
)%Interest income


2,118



3,010



(892
)


(29.6
)%Interest expense


665



6,102



(5,437
)


(89.1
)%EBIT(1)


63,339



83,697



(20,358
)


(24.3
)%Depreciation and amortization


12,550



9,392



3,158



33.6
%EBITDA(1)

$
75,889


$
93,089


$
(17,200
)


(18.5
)%     (1)
    
    EBIT (earnings before interest and income taxes) and EBITDA
    (earnings before interest, income taxes, depreciation and
    amortization) are non-GAAP financial measures that we believe
    are useful to investors in evaluating our 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.
 48




---



##### Table of Contents



Research and Development.
  Equity in Net Income of
    Affiliates.
  Interest Income.
  Interest Expense.
  Income from Continuing
    Operations.
  EBIT and EBITDA.
 49




---



##### Table of Contents



Liquidity
    and Capital Resources  Comparison
    of Year Ended December 31, 2008 to Year Ended
    December 31, 2007
          Form 10-K
     50




---



##### Table of Contents



and/or
          Comparison
    of Year Ended December 31, 2007 to Year Ended
    December 31, 2006
     51




---



##### Table of Contents



Contractual
    Obligations
    Payments Due By PeriodLess Than


1 - 3


3 - 5


More Than1 Year


Years


Years


5 Years


Total(In thousands)Long-term debt (A)

$
1,111


$
87,222


$



$



$
88,333Operating leases (B)


8,945



15,218



10,956



24,249



59,368Purchase obligations (C)


5,406















5,406Contributions for retirement plans (D)


3,536















3,536Unrecognized tax benefits (E)


192



1,080



148







1,420$
19,190


$
103,520


$
11,104


$
24,249


$
158,063     (A)
    
    See Note 10 in the Notes to Consolidated Financial
    Statements for additional information regarding our revolving
    credit facility (amounts in table consist of future payments of
    $85.0 million for long-term borrowings, and
    $3.3 million for interest).(B)
    
    See Note 12 in the Notes to Consolidated Financial
    Statements.(C)
    
    Other than for PPM equipment purchases, we generally do not make
    unconditional, noncancelable purchase commitments. We enter into
    purchase orders in the normal course of business, and they
    generally do not exceed one-year terms.(D)
    
    Amount represents an estimate of our cash contribution for 2009
    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.(E)
    
    The amount related to unrecognized tax benefits under
    FIN No. 48 in the table includes $0.2 million of
    interest and penalties. See Note 13 in the Notes to the
    Consolidated Financial Statements. 52




---



##### Table of Contents



Off-Balance
    Sheet Arrangements   New
    Accounting Pronouncements  Employers Disclosures about
    Pensions and Other Postretirement Benefits
  Fair Value Measurements 157-2,
  Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Interest
    Rate Risk
    12-month
  Foreign
    Currency Risk
    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA   53




---



##### 



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


55Consolidated Balance Sheets as of
    December 31, 2008 and 2007


57Consolidated Statements of Income for the Years
    Ended December 31, 2008, 2007 and 2006


58Consolidated Statements of Stockholders
    (Deficit) Equity for the Years Ended December 31, 2008,
    2007 and 2006


59Consolidated Statements of Comprehensive Income
    for the Years Ended December 31, 2008, 2007 and 2006


60Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2008, 2007, and 2006


61Notes to Consolidated Financial Statements


62Consolidated Schedule of Valuation and Qualifying
    Accounts


90  
  54




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm           Employers Accounting for Defined Benefit
    Pension and Other Postretirement Plans Accounting for Uncertainty in Income Taxes
  Internal Control  Integrated Framework
  KPMG
    LLP
    55




---



##### Table of Contents



Report
    of Independent Registered Public Accounting Firm
     Internal Control 
    Integrated Framework
        Internal Control  Integrated Framework
    KPMG
    LLP
    56




---



##### Table of Contents



ARBITRON
    INC.Consolidated Balance Sheets
    December 31, 2008 and 2007
    (In thousands, except par value data)
  2008


2007AssetsCurrent assetsCash and cash equivalents

$
8,658


$
21,141Trade accounts receivable, net of allowance for doubtful
    accounts of $2,598 in 2008 and $1,688 in 2007


50,037



34,171Inventory


2,507



829Prepaid expenses and other current assets


10,167



3,676Current assets of discontinued operations






5,677Deferred tax assets


2,476



3,124Total current assets


73,845



68,618Investment in affiliates


14,901



15,262Property and equipment, net


62,930



50,183Goodwill, net


38,500



38,500Other intangibles, net


950



1,252Noncurrent assets of discontinued operations






1,869Noncurrent deferred tax assets


7,576



4,089Other noncurrent assets


895



770Total assets

$
199,597


$
180,543Liabilities and Stockholders (Deficit) EquityCurrent liabilitiesAccounts payable

$
15,401


$
10,338Accrued expenses and other current liabilities


29,732



27,702Current liabilities of discontinued operations






4,651Current portion of long term debt






5,000Deferred revenue


57,304



66,768Total current liabilities


102,437



114,459Long-term debt


85,000



7,000Other noncurrent liabilities


26,655



10,884Total liabilities


214,092



132,343Commitments and contingencies






Stockholders (deficit) 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 as of
    December 31, 2008, and 2007


16,169



16,169Net distributions to parent prior to March 30, 2001 spin-off


(239,042
)


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


226,345



279,996Common stock held in treasury, 5,928 shares in 2008 and
    4,028 shares in 2007


(2,964
)


(2,014
)Accumulated other comprehensive loss


(15,003
)


(6,909
)Total stockholders (deficit) equity


(14,495
)


48,200Total liabilities and stockholders (deficit) equity

$
199,597


$
180,543    57




---



##### Table of Contents



ARBITRON
    INC.Consolidated Statements of Income
    Years Ended December 31, 2008, 2007, and 2006
    (In thousands, except per share data)
  2008


2007


2006Revenue

$
368,824


$
338,469


$
319,335Costs and expensesCost of revenue


185,632



157,175



120,698Selling, general and administrative


85,315



79,516



78,511Research and development


41,412



42,496



44,177Total costs and expenses


312,359



279,187



243,386Operating income


56,465



59,282



75,949Equity in net income of affiliates


6,677



4,057



7,748Income from continuing operations before interest and income tax
    expense


63,142



63,339



83,697Interest income


623



2,118



3,010Interest expense


2,216



665



6,102Income from continuing operations before income tax expense


61,549



64,792



80,605Income tax expense


24,330



24,288



30,259Income from continuing operations


37,219



40,504



50,346Discontinued operations(Loss) income from discontinued operations, net of taxes


(462
)


(324
)


312Gain on sale of discontinued operations, net of taxes


423







Total (loss) income from discontinued operations, net of taxes


(39
)


(324
)


312Net income

$
37,180


$
40,180


$
50,658Income per weighted-average common shareBasicContinuing operations

$
1.37


$
1.38


$
1.68Discontinued operations


(0.00
)


(0.01
)


0.01Net income

$
1.37


$
1.37


$
1.69DilutedContinuing operations

$
1.37


$
1.37


$
1.67Discontinued operations


(0.00
)


(0.01
)


0.01Net income

$
1.36


$
1.35


$
1.68Weighted-average common shares used in calculationsBasic


27,094



29,399



29,937Potentially dilutive securities


165



266



149Diluted


27,259



29,665



30,086Dividends declared per common share outstanding

$
0.40


$
0.40


$
0.40    58




---



##### Table of Contents



ARBITRON
    INC.Consolidated Statements of Stockholders
    (Deficit) Equity
    Years Ended December 31, 2008, 2007, and 2006
    (In thousands)
  NetDistributionsto Parent


Retained





AccumulatedNumber of








Prior to


Earnings


Common Stock


Other


TotalShares


Common


Additional


March 31, 2001


Subsequent


Held in


Comprehensive


StockholdersOutstanding


Stock


Paid-in Capital


Spin-off


to Spin-off


Treasury


Loss


(Deficit) EquityBalance 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



431Retirement and post-retirement liabilities


























5,154



5,154Income tax expense


























(2,140
)


(2,140
)Dividends 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



















2,060Impact of SFAS No. 158 adoption


























(7,079
)


(7,079
)Balance at December 31, 2006


29,692



16,169



53,598



(239,042
)


266,905



(1,323
)


(7,051
)


89,256Net income


















40,180











40,180Other comprehensive income (loss)Foreign currency translation


























53



53Retirement and post-retirement liabilities


























198



198Income tax expense


























(109
)


(109
)Dividends declared


















(11,783
)










(11,783
)Common stock issued


712







20,908











356







21,264Noncash share-based compensation










6,532



















6,532Common stock repurchased


(2,094
)






(98,953
)










(1,047
)






(100,000
)Tax benefits from share-based awards










2,609



















2,609Reclass of negative APIC to retained earnings










15,306







(15,306
)










Balance at December 31, 2007


28,310



16,169







(239,042
)


279,996



(2,014
)


(6,909
)


48,200Net income


















37,180











37,180Other comprehensive income (loss)Foreign currency translation


























(1,087
)


(1,087
)Retirement and post-retirement liabilities


























(12,468
)


(12,468
)Income tax benefit


























5,238



5,238Dividends declared


















(10,826
)










(10,826
)Common stock issued


347















10,065



164







10,229Noncash share-based compensation


















8,406



9







8,415Common stock repurchased


(2,247
)














(98,876
)


(1,123
)






(99,999
)Tax benefits from share-based awards


















830











830Impact of SFAS No. 158 measurement date adoptionService, interest, and expected return component


















(207
)










(207
)Amortization of prior service and actuarial loss component


















(223
)






223



Balance at December 31, 2008


26,410


$
16,169


$



$
(239,042
)

$
226,345


$
(2,964
)

$
(15,003
)

$
(14,495
)    59




---



##### Table of Contents



ARBITRON
    INC.Consolidated Statements of Comprehensive Income
    Years Ended December 31, 2008, 2007, and 2006
    (In thousands)
  2008


2007


2006Net income

$
37,180


$
40,180


$
50,658Other comprehensive (loss) income, net of taxChange in foreign currency translation adjustment, net of tax
    benefit (expense) of $429, $(19), and $(168) for 2008, 2007, and
    2006, respectively


(658
)


34



263Change in retirement liabilities, net of tax benefit (expense)
    of $4,809, $(90), and $(1,972) for 2008, 2007, and 2006,
    respectively


(7,659
)


108



3,182Other comprehensive (loss) income


(8,317
)


142



3,445Comprehensive income

$
28,863


$
40,322


$
54,103    60




---



##### Table of Contents



ARBITRON
    INC.Consolidated Statements of Cash Flows
    Years Ended December 31, 2008, 2007, and 2006
    (In thousands)
  2008


2007


2006Cash flows from operating activitiesNet income

$
37,180


$
40,180


$
50,658Less: Income (loss) from discontinued operations, net of taxes


(39
)


(324
)


312Income from continuing operations


37,219



40,504



50,346Adjustments to reconcile income from continuing operations to
    net cash provided by operating activitiesDepreciation and amortization of property and equipment


17,161



11,773



7,842Amortization of intangible assets


302



777



1,550Loss on asset disposals


1,550



1,263



591Loss due to SFAS No. 88 pension settlements


1,670







Asset impairment charges


48



831



638Deferred income taxes


2,400



1,768



3,902Equity in net income of affiliates


(6,677
)


(4,057
)


(7,748
)Distributions from affiliate


8,100



7,800



6,800Bad debt expense


1,636



1,175



890Non-cash share-based compensation


8,415



6,532



6,545Changes in operating assets and liabilitiesTrade accounts receivable


(17,502
)


(4,813
)


(6,089
)Prepaid expenses and other assets


(6,184
)


124



(690
)Inventory


(1,678
)


2,964



(3,351
)Accounts payable


5,352



485



1,178Accrued expense and other current liabilities


2,307



(3,558
)


1,794Deferred revenue


(9,464
)


1,175



4,638Other noncurrent liabilities


1,426



121



(1,067
)Net operating activities from discontinued operations


(1,194
)


198



380Net cash provided by operating activities


44,887



65,062



68,149Cash flows from investing activitiesAdditions to property and equipment


(32,005
)


(25,333
)


(19,691
)Purchases of short-term investments






(170,545
)


(456,975
)Proceeds from sales of short-term investments






198,170



511,910Investments in affiliate


(1,062
)


(2,885
)


Payments for business acquisition


(522
)






Net investing activities from discontinued operations


2,123



(60
)


128Net cash (used in) provided by investing activities


(31,466
)


(653
)


35,372Cash flows from financing activitiesProceeds from stock option exercises and stock purchase plan


10,331



21,347



19,584Stock repurchases


(99,999
)


(100,000
)


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


830



2,609



1,875Dividends paid to stockholders


(11,022
)


(11,914
)


(12,103
)Payments for deferred financing costs










(447
)Borrowings issued on long-term debt


140,000



35,000



Payments of long-term debt


(67,000
)


(23,000
)


(50,000
)Net cash used in financing activities


(26,860
)


(75,958
)


(111,091
)Effect of exchange rate changes on cash and cash equivalents


(31
)


37



362Net decrease in cash and cash equivalents


(13,470
)


(11,512
)


(7,208
)Cash and cash equivalents at beginning of year


22,128



33,640



40,848Cash and cash equivalents at end of year

$
8,658


$
22,128


$
33,640Cash and cash equivalents from continuing operations at end of
    year


8,658



21,141



31,012Cash and cash equivalents from discontinued operations at end of
    year






987



2,628Cash and cash equivalents at end of year

$
8,658


$
22,128


$
33,640    61




---



##### Table of Contents



ARBITRON
    INC.
  Notes
    to Consolidated Financial Statements
  1.
    Basis of
    Presentation  Basis
    of Consolidation
    Description
    of Business
    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
   62




---



##### Table of Contents



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


3 yearsPurchased and internally developed software


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
  Investment
    in Affiliates
   63




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Goodwill
    and Other Intangibles
  Goodwill and Other
    Intangible Assets Accounting for the Impairment or
    Disposal of Long-Lived Assets
    Impairment
    of Long-Lived Assets
    Income
    Taxes
    Net
    Income per Weighted Average Common Share
     64




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Share-Based Payments
  Translation
    of Foreign Currencies
    Advertising
    Expense
    Accounting
    Estimates
    Legal
    Matters
    Leases
    New
    Accounting Pronouncements
  Employers Disclosures about
    Pensions and Other Postretirement Benefits
 65




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Fair Value Measurements 157-2,
  Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans
  3.
    Discontinued
    Operation    December 31,


December 31,Assets and Liabilities of Discontinued Operations

2008


2007Cash

$



$
987Receivables






4,112Deferred taxes-current






49Prepaids and other current assets






529Current assets






5,677Property, plant and equipment






46Goodwill






2,058Deferred taxes-noncurrent






(235
)Noncurrent assets






1,869Total assets

$



$
7,546Accounts payable

$



$
1,499Accrued expenses and other current liabilities






2,526Deferred revenue






626Total liabilities

$



$
4,651Accumulated other comprehensive income

$



$
376  66




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Years Ended December 31,Results of Operations of Discontinued Operations

2008


2007


2006Revenue

$
1,011


$
13,578


$
9,915Operating (loss) income


(791
)


119



313Net interest income


7



126



92(Loss) income before income tax benefit (expense)


(784
)


245



405Income tax benefit (expense)


322



(569
)


(93
)(Loss) income from discontinued operations, net of taxes


(462
)


(324
)


312Gain on sale, net of taxes


423







Total (loss) income from discontinued operations, net of tax

$
(39
)

$
(324
)

$
312     4.
    Inventories    5.
    Investment
    in Affiliates    Summary
    of Investment Activity in Affiliates (in thousands)
  Year Ended December 31, 2008


Year Ended December 31, 2007Scarborough


Project Apollo LLC


Total


Scarborough


Project Apollo LLC


TotalBeginning balance

$
14,420


$
842


$
15,262


$
13,907


$



$
13,907Equity in net income (loss)


8,581



(1,904
)


6,677



8,313



(4,256
)


4,057Distributions from affiliates


(8,100
)






(8,100
)


(7,800
)






(7,800
)Non-cash investments in affiliates


















2,213



2,213Cash investments in affiliates






1,062



1,062







2,885



2,885Ending balance

$
14,901


$



$
14,901


$
14,420


$
842


$
15,262    67




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##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        6.
    Property
    and Equipment    2008


2007Purchased and internally developed software

$
44,463


$
35,089Portable People Meter equipment


28,915



17,883Computer equipment


17,327



14,388Leasehold improvements


14,435



11,910Machinery, furniture and fixtures


8,828



7,164113,968



86,434Accumulated depreciation and amortization


(51,038
)


(36,251
)Property and equipment, net

$
62,930


$
50,183   For the Years Ended December 31,Summary of Other Information

2008


2007


2006Depreciation and amortization expense

$
17,161


$
11,773


$
7,842Impairment charges

$
48


$
831


$
638Interest capitalized during the year

$
107


$
42


$
1,032   7.
    Goodwill
    and Other Intangible Assets    2008


2007


2006Amortization expense for intangibles

$
302


$
777


$
1,550  68




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Amount2009

$
1412010

$
1412011

$
1412012

$
1412013

$
141Thereafter

$
245     8.
    Prepaids
    and Other Current Assets    2008


2007Insurance recovery receivables

$
5,775


$
Survey participant incentives and prepaid postage


1,621



1,144Other


2,771



2,532Prepaids and other current assets

$
10,167


$
3,676    69




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    Accrued
    Expenses and Other Current Liabilities    2008


2007Employee compensation and benefits

$
18,609


$
17,832Royalties due to Scarborough


6,318



5,965Dividend payable


2,633



2,829Other


2,172



1,076$
29,732


$
27,702   10.
    Long-term
    Debt      and/or
     70




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      11.  Accumulated
    Other Comprehensive Loss
    2008


2007Retirement plan liabilities, net of tax

$
(14,719
)

$
(7,283
)Foreign currency translation, net of tax


(284
)


374Accumulated other comprehensive loss

$
(15,003
)

$
(6,909
)   12.
    Commitments
    and Contingencies  Leases
      2009

$
8,9452010


8,0162011


7,2022012


6,0532013


4,903Thereafter


24,249$
59,368   Legal
    Matters
   71




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Contingencies
    13.
    Income
    Taxes      2008


2007


2006Income from continuing operations before income tax expense:U.S.

$
61,898


$
64,562


$
80,470International


(349
)


230



135Total

$
61,549


$
64,792


$
80,605Income tax expense:Current:U.S.

$
19,628


$
20,817


$
25,463State, local and foreign


2,302



1,703



894Total


21,930



22,520



26,357Deferred:U.S.


469



478



1,410State, local and foreign


1,931



1,290



2,492Total


2,400



1,768



3,902$
24,330


$
24,288


$
30,259 72




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  2008


2007


2006U.S. statutory rate


35.0
%


35.0
%


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

$
21,542


$
22,677


$
28,211State income taxes, net of federal benefit


2,770



1,902



2,183Tax-exempt interest income






(613
)


(1,052
)Meals and entertainment


294



358



278Foreign tax credit and capital loss carryforward


282



(452
)


(Decrease) increase in valuation allowance for foreign tax credit


(282
)


452



Reduction in valuation allowance for state NOLs






(12
)


(252
)Adjustments to tax liabilities


257



294



722Other


(533
)


(318
)


169Income tax expense

$
24,330


$
24,288


$
30,259Effective tax rate


39.5
%


37.5
%


37.5
%     Accounting for Uncertainty in Income Taxes
      TotalBalance at January 1, 2008

$
981Increases related to current year tax positions


147Increases related prior years tax positions


442Expiration of the statute of limitations for the assessment of
    taxes


(150
)Balance at December 31, 2008

$
1,420      73




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
        2008


2007Deferred tax assetsCurrent deferred tax assetsAccruals

$
2,273


$
1,900Net operating loss carryforwards


203



1,2242,476



3,124Noncurrent deferred tax assetsBenefit plans

$
11,213


$
5,966Depreciation


1,526



2,101Accruals


731



805Net operating loss carryforwards






202FAS 123R share-based compensation


5,378



3,588Partnership interest


2,285



2,265Other


1,093



68522,226



15,612Less valuation allowance


(332
)


(452
)Total deferred tax assets


24,370



18,284Deferred tax liabilitiesNoncurrent deferred tax liabilitiesGoodwill and other intangible amortization

$
(12,097
)

$
(8,229
)Benefit plans


(2,084
)


(2,707
)Other


(137
)


(135
)Total deferred tax liabilities


(14,318
)


(11,071
)Net deferred tax assets

$
10,052


$
7,213    74




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      14.
    Retirement
    Plans  Adoption
    of SFAS No. 158 Measurement Date
    Provisions
    Recognition
    of SFAS No. 88 Settlement
  Employers
    Accounting for Settlements and Curtailments of Defined Benefit
    Pension Plans and for Termination Benefits
  (Dollars in thousands)2008Cost of revenue

$
885Selling, general, and administrative


484Research and development


301Total costs and expenses

$
1,670     Pension
    Benefits
     75




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    non-U.S. stocks
    Plan Assets as ofDecember 31,


September 30,Asset Category

2008


2007Equity securities


60
%


59
%Debt securities


39
%


40
%Cash and cash equivalents


1
%


1
%Total


100
%


100
%  76




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Net Periodic Cost

2008


2007


2006Service cost of benefits

$
783


$
869


$
966Interest cost


2,026



1,781



1,651Expected return on plan assets


(2,423
)


(2,208
)


(1,970
)Amortization of net actuarial loss


728



661



719Amortization of prior service cost


22



22



22Total

$
1,136


$
1,125


$
1,388Other changes in plan assets and projected benefit obligation
    recognized in other comprehensive lossNet actuarial loss arising this period


12,229



696



N/AActuarial loss charged to expense due to settlement


(1,670
)Net actuarial loss amortized this period


(728
)


(661
)


N/APrior service cost amortized this period


(22
)


(22
)


N/ARecognized in other comprehensive loss


9,809



13



N/ARecognized in net periodic pension cost and other comprehensive
    loss

$
10,945


$
1,138



N/AMeasurement date change adjustment recognized directly into
    accumulated other comprehensive lossNet actuarial loss

$
(182
)


N/APrior service cost

$
(6
)


N/A     2009

$
1,6872010

$
1,2772011

$
1,6712012

$
1,8772013

$
2,1192014 - 2018

$
13,106    77




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Pension PlanFifteen Months Ended


Twelve Months EndedDecember 31,


September 30,2008


2007Change in projected benefit obligationAt beginning of period

$
34,889


$
31,934Service cost


979



869Interest cost


2,532



1,781Plan participants contributions


392



347Actuarial loss


2,171



2,053Benefits paid


(4,661
)


(2,095
)At end of period

$
36,302


$
34,889Change in fair value of plan assetsAt beginning of period

$
32,273


$
28,474Actual return on plan assets


(7,029
)


3,565Employer contribution


1,362



1,982Plan participants contributions


392



347Benefits paid


(4,661
)


(2,095
)At end of period

$
22,337


$
32,273Funded status  net pension liability at fiscal
    year end

$
(13,965
)

$
(2,616
)Amounts recognized in accumulated other comprehensive lossNet actuarial loss

$
19,244


$
9,595Prior service cost

$
22


$
50Estimated amounts of accumulated other comprehensive loss to
    be recognized as net periodic cost during the subsequent
    periodNet actuarial loss

$
994


$
728Prior service cost

$
22


$
22Measurement date adjustment to retained earnings

$
284



N/AWeighted-average assumptionsDiscount rate  components of cost


6.00
%


5.75
%Discount rate  benefit obligations


5.37
%


6.00
%Expected return on plan assets


8.00
%


8.00
%Rate of compensation increase


N/A



N/A   Supplemental
    Retirement Benefits
   78




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
      2009

$
7282010

$
1,1322011

$
4042012

$
4462013

$
4012014 - 2018

$
1,943     Net periodic cost

2008


2007


2006Service cost of benefits

$
118


$
130


$
57Interest cost


234



209



162Amortization of net actuarial loss


184



193



123Amortization of prior service credit


(22
)


(22
)


(22
)Total

$
514


$
510


$
320Other changes in plan assets and projected benefit obligation
    recognized in other comprehensive loss (income)Net actuarial loss arising this period

$
2,726


$
71



N/ANet actuarial loss amortized this period


(184
)


(193
)


N/APrior service credit amortized this period


22



22



N/ARecognized in other comprehensive loss (income)

$
2,564


$
(100
)


N/ARecognized in net periodic cost and other comprehensive loss
    (income)

$
3,078


$
410



N/AMeasurement date change adjustment recognized directly into
    accumulated other comprehensive lossNet actuarial loss

$
(33
)


N/APrior service cost

$
6



N/A    79




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Supplemental Retirement PlansFifteen Months Ended


Twelve Months EndedDecember 31,


September 30,2008


2007Change in projected benefit obligationAt beginning of period

$
4,001


$
3,653Service cost


145



130Interest cost


285



209Plan participants contributions


48



64Actuarial loss


2,726



75Benefits paid


(177
)


(130
)At end of period

$
7,028


$
4,001Change in fair value of plan assetsAt beginning of period

$



$
Actual return on plan assets






Employer contribution


177



130Plan participants contributions






Benefits paid


(177
)


(130
)At end of period

$



$
Funded status

$
(7,028
)

$
(4,001
)Contributions between measurement date and year end


N/A



16Net pension liability at fiscal year end

$
(7,028
)

$
(3,985
)Amounts recognized in accumulated other comprehensive lossNet actuarial loss

$
4,231


$
1,722Prior service credit

$
(22
)

$
(50
)Estimated amounts of accumulated other comprehensive loss to
    be recognized as net periodic cost during the subsequent
    periodNet actuarial loss

$
557


$
184Prior service credit

$
(22
)

$
(22
)Measurement date adjustment to retained earnings

$
105



N/AWeighted-average assumptionsDiscount rateComponents of cost


6.00
%


5.75
%Benefit obligations


5.37
%


6.00
%Expected return on plan assets


N/A



N/ARate of compensation increase


N/A



N/A  80




---



##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Postretirement
    Benefits
       2009

$
1082010

$
1142011

$
1202012

$
1302013

$
1392014-2018

$
827     Net Periodic Cost

2008


2007


2006Service cost of benefits

$
41


$
39


$
36Interest cost


94



87



83Amortization of net actuarial loss


34



44



47Total

$
169


$
170


$
166Other changes in plan assets and projected benefit obligation
    recognized in other comprehensive loss (income)Net actuarial loss (gain) arising this period

$
129


$
(67
)


N/ANet actuarial loss amortized this period


(34
)


(44
)


N/ARecognized in other comprehensive loss (income)

$
95


$
(111
)


N/ARecognized in net periodic cost and other comprehensive loss
    (income)

$
264


$
59



N/AMeasurement date change adjustment recognized directly into
    accumulated other comprehensive lossNet actuarial loss

$
(8
)


N/A  81




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##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Postretirement PlanFifteen Months Ended


Twelve Months EndedDecember 31,


September 30,2008


2007Change in benefit obligation during the periodAt beginning of period

$
1,548


$
1,535Service cost


51



39Interest cost


118



87Plan participants contributions


48



28Actuarial loss (gain)


129



(67
)Benefits paid


(144
)


(74
)At end of period

$
1,750


$
1,548Change in fair value of plan assetsAt beginning of period

$



$
Employer contribution


96



46Plan participants contributions


48



28Benefits paid


(144
)


(74
)At end of period

$



$
Funded status

$
(1,750
)

$
(1,548
)Contributions between measurement date and year end


N/A



16Net postretirement liability at fiscal year end

$
(1,750
)

$
(1,532
)Amounts recognized in accumulated other comprehensive lossNet actuarial loss

$
610


$
523Measurement date adjustment to retained earnings

$
42



N/AEstimated amounts of accumulated other comprehensive loss to
    be recognized as net periodic cost during the subsequent
    periodNet actuarial loss

$
43


$
34Weighted-average assumptionsDiscount rateComponents of cost


6.00
%


5.75
%Benefit obligations


5.37
%


6.00
%Expected return on plan assets


N/A



N/ARate of compensation increase


N/A



N/A    82




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##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  401(k)
    Plan
    15.
    Share-Based
    Compensation    2008


2007


2006Cost of revenue

$
756


$
681


$
567Selling, general and administrative


7,131



5,431



5,586Research and development


528



420



392Share-based compensation

$
8,415


$
6,532


$
6,545          83




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##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Stock
    Options
  10-year 10-year
      Assumptions for options granted toemployees and nonemployee directors

2008

2007

2006Expected volatility

23.99 - 31.31%

24.61 - 26.52%

26.59 - 27.35%Expected dividends

1.00 - 3.00%

1.00%

1.00%Expected term (in years)

5.50 - 6.00

5.75 - 6.25

5.25 - 6.25Risk-free rate

1.44 - 3.44%

3.43 - 4.91%

4.35 - 5.01%Weighted-average volatility

25.26%

25.45%

27.32%Weighted-average term (in years)

5.93

5.94

5.74Weighted-average risk-free rate

2.90%

4.59%

4.70%Weighted-average grant date fair value

$11.40

$14.86

$12.55  84




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##### Table of Contents



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


Remaining


AggregateAverage


Contractual


Intrinsic ValueOptions

Shares


Exercise Price


Term (Years)


(In thousands)Outstanding at January 1, 2008


1,685,251


$
38.46Granted


323,471



42.44Exercised


(269,848
)


33.62Forfeited or expired


(25,317
)


41.05Outstanding at December 31, 2008


1,713,557


$
39.93



6.64


$
1Vested or expected to vest at December 31, 2008


1,706,582


$
39.92



6.65


$
1Exercisable at December 31, 2008


1,282,837


$
39.05



5.98



     2008

2007

2006Intrinsic value of options exercised

$
3,688


$
7,787


$
5,421Cash received from options exercised

$
9,071


$
19,934


$
18,184   Nonvested
    Share Awards
    Weighted-AverageNonvested Share Awards

Shares


Grant-Date Fair ValueOutstanding at January 1, 2008


169,929


$
43.53Granted


105,356



43.99Vested


(64,805
)


42.76Nonvested at December 31, 2008


210,480


$
43.97Expected to vest at December 31, 2008


210,480


$
43.97    85




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##### Table of Contents



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

Shares


Grant-Date Fair ValueOutstanding at January 1, 2008


26,569


$
42.86Granted


30,886



37.52Vested


(33,336
)


38.21Nonvested at December 31, 2008


24,119


$
42.46Vested at December 31, 2008


64,911


$
39.91Expected to vest at December 31, 2008


24,119


$
42.46     2008


2007


2006Shares granted to employee directors


21,667



21,667



18,186Shares granted to nonemployee directors


9,219



4,786



7,264Fair value of shares vested

$
570


$
778


$
275   Employee
    Stock Purchase Plan
    2008


2007


2006Number of ESPP shares issued


46,091



35,078



39,597Amount of proceeds received from employees

$
1,158


$
1,327


$
1,226Share-based compensation expense

$
292


$
309


$
287  86




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##### Table of Contents



ARBITRON
    INC.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  16.
    Significant
    Customers and Concentration of Credit Risk    2008


2007


2006Quantitative Radio Business


81
%


79
%


79
%Related Software Licensing


9
%


9
%


9
%     17.
    Financial
    Instruments    18.
    Stock
    Repurchases        19.
    Enterprise-Wide
    Information    2008


2007


2006Service RevenuesRadio audience measurement services

$
297,132


$
267,804


$
253,042Local market consumer information services


36,872



36,393



33,266Software applications


34,820



34,272



33,027Total revenues

$
368,824


$
338,469


$
319,335  87




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##### Table of Contents



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


International(1)


Total2008Revenues

$
364,425


$
4,399


$
368,8242007Revenues

$
333,164


$
5,305


$
338,4692006Revenues

$
315,208


$
4,127


$
319,335     (1)
    
    The revenues of the individual countries comprising these
    amounts are not significant enough to require separate
    disclosure. 88




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##### Table of Contents



20.
    Quarterly
    Information (Unaudited) (dollars in thousands, except per share
    data):  Three Months EndedMarch 31


June 30


September 30


December 312008Revenue

$
94,065


$
78,655


$
102,526


$
93,578Gross profit


58,955



26,070



60,731



37,436Income from continuing operations


16,312



625



16,900



3,382(Loss) income from discontinued operations, net of taxes


(45
)


(25
)


55



(24
)Net income

$
16,267


$
600


$
16,955


$
3,358Income per weighted average common shareBasicContinuing operations

$
0.58


$
0.02


$
0.63


$
0.13Discontinued operations














Net income

$
0.58


$
0.02


$
0.64


$
0.13DilutedContinuing operations

$
0.58


$
0.02


$
0.63


$
0.13Discontinued operations














Net income

$
0.57


$
0.02


$
0.63


$
0.13Dividends per common share

$
0.10


$
0.10


$
0.10


$
0.102007Revenue

$
89,148


$
75,867


$
93,322


$
80,132Gross profit


59,324



32,224



58,871



30,875Income from continuing operations


15,526



3,722



17,121



4,135Income (loss) from discontinued operations, net of taxes


(31
)


66



99



(458
)Net income

$
15,495


$
3,788


$
17,220


$
3,677Income per weighted average common shareBasicContinuing operations

$
0.52


$
0.12


$
0.58


$
0.15Discontinued operations














(0.02
)Net income

$
0.52


$
0.13


$
0.58


$
0.13DilutedContinuing operations

$
0.52


$
0.12


$
0.57


$
0.14Discontinued operations


0.00



0.00



0.00



(0.02
)Net income

$
0.52


$
0.13


$
0.58


$
0.13Dividends per common share

$
0.10


$
0.10


$
0.10


$
0.10    89




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##### Table of Contents



Arbitron
    Inc.
    Consolidated Schedule of Valuation and Qualifying Accounts
    For the Years Ended December 31, 2008, 2007, and 2006(In
    thousands)  2008


2007


2006Allowance for doubtful trade accounts receivable:Balance at beginning of year

$
1,688


$
1,397


$
1,146Additions charged to expenses


1,636



1,162



890Write-offs net of recoveries


(726
)


(871
)


(639
)Balance at end of year

$
2,598


$
1,688


$
1,397  90




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##### 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



The Companys management, with the participation of the
    Companys chief executive officer and chief financial
    officer, evaluated the effectiveness of the Companys
    disclosure controls and procedures as of December 31, 2008.
    The term disclosure controls and procedures, as
    defined in
    Rules 13a-15(e)
    and
    15d-15(e)
    under the Exchange Act, means controls and other procedures of a
    company that are designed to ensure that information required to
    be disclosed by a company in the reports that it files or
    submits under the Exchange Act is recorded, processed,
    summarized and reported, within the time periods specified in
    the SECs rules and forms. Disclosure controls and
    procedures include, without limitation, controls and procedures
    designed to ensure that information required to be disclosed by
    a company in the reports that it files or submits under the
    Exchange Act is accumulated and communicated to the
    companys management, including its principal executive and
    principal financial officers, as appropriate to allow timely
    decisions regarding required disclosure. Management recognizes
    that any controls and procedures, no matter how well designed
    and operated, can provide only reasonable assurance of achieving
    their objectives and management necessarily applies its judgment
    in evaluating the cost-benefit relationship of possible controls
    and procedures. Based on the evaluation of the Companys
    disclosure controls and procedures as of December 31, 2008,
    the Companys chief executive officer and chief financial
    officer concluded that, as of such date, the Companys
    disclosure controls and procedures were effective at the
    reasonable assurance level. Managements
    Report on Internal Control Over Financial
    Reporting



Arbitrons management is responsible for establishing and
    maintaining adequate internal control over financial reporting
    (as defined in
    Rule 13a-15(f)
    under the Securities Exchange Act of 1934, as amended). Our
    management assessed the effectiveness of our internal control
    over financial reporting as of December 31, 2008. In making
    this assessment, our management used the criteria set forth by
    the Committee of Sponsoring Organizations of the Treadway
    Commission in Internal Control-Integrated Framework.
    Based upon that assessment, our management has concluded that,
    as of December 31, 2008, our internal control over
    financial reporting is effective based on these criteria.



The attestation report of KPMG LLP, our independent registered
    public accounting firm, on the effectiveness of our internal
    control over financial reporting is set forth on page 56 of
    this Annual Report on
    Form 10-K,
    and is incorporated herein by reference. Changes
    in Internal Control Over Financial Reporting



There were no changes in the Companys internal control
    over financial reporting (as defined in
    Rules 13a-15(f)
    and
    15d-15(f)
    under the Exchange Act) that occurred during the quarterly
    period ended December 31, 2008, that have materially
    affected, or are reasonably likely to materially affect, the
    Companys internal control over financial reporting. ITEM 9B.
    OTHER
    INFORMATION  2009
    Non-Equity Incentive Plan
     91




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##### Table of Contents



45-55%
    Bylaw
    Amendment
      ARTICLE I
  OFFICES
      Board of
    Directors
   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE       92




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##### Table of Contents



ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS      Number of SecuritiesRemaining Available forNumber of Securities to be


Weighted-Average


Future Issuance UnderIssued Upon Exercise of


Exercise Price of


Equity Compensation PlansOutstanding Options,


Outstanding Options,


(Excluding SecuritiesWarrants and Rights


Warrants and Rights


Reflected in Column (a))Plan Category

(a)


(b)


(c)Equity compensation plans approved by security holders


1,856,785


$
40.11



2,612,029Equity compensation plans not approved by security holders


156,282


$
43.70



15,368Total


2,013,067


$
40.39



2,627,397   ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES      
    Independent Registered Public Accounting Firm Reports 93




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##### Table of Contents




    Consolidated Balance Sheets as of December 31, 2008 and 2007
    Consolidated Statements of Income for the Years Ended
    December 31, 2008, 2007 and 2006
    Consolidated Statements of Stockholders Deficit Equity for
    the Years Ended December 31, 2008, 2007 and 2006
    Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2008, 2007 and 2006
    Notes to Consolidated Financial Statements for the Years Ended
    December 31, 2008, 2007 and 2006      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

Second Amended and Restated Bylaws of Arbitron, Inc., effective
    as of February 25, 2009.4
.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).4
.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 (Filed as Exhibit 4.3 to
    Arbitrons Annual Report on
    Form 10-K
    for the year ended December 31, 2006 and incorporated
    herein by reference).10
.1

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
.2

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).*10
.3

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
.4

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
.5

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
.6

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)* 94




---



##### Table of Contents



Exhibit No.

Description10
.7

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
.8

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
.9

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
.10

Arbitron Inc. 2008 Equity Compensation Plan (Effective as of
    May 13, 2008) (Filed as Exhibit 10.1 to
    Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2008, and incorporated
    herein by reference).*10
.11

Arbitron Employee Stock Purchase Plan (Amended and Restated as
    of May 13, 2008) (Filed as Exhibit 10.2 to
    Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2008 and incorporated
    herein by reference).*10
.12

Executive Transition Agreement between Arbitron Inc. and Stephen
    B. Morris, dated December 30, 2008*10
.13

Executive Employment Agreement between Arbitron Inc. and Michael
    P. Skarzynski, dated January 7, 2009*10
.14

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
.15

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
.16

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
.17

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
.18

Form of Executive Retention Agreement (Filed as
    Exhibit 10.3 to Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2008 and incorporated
    herein by reference).*10
.19

Credit Agreement dated as of December 20, 2006 among
    Arbitron Inc. the Lenders Party thereto, Citizens Bank of
    Pennsylvania as Documentation Agent, Citibank, N.A. and Wachovia
    Bank, National Association as Co-Syndication Agents and JPMorgan
    Chase Bank, NA as Administrative Agent J.P. Morgan
    Securities Inc. as Sole Bookrunner and Sole Lead Arranger (Filed
    as Exhibit 10.1 to Arbitrons Current Report on
    Form 8-K,
    dated December 20, 2006 and incorporated herein by
    reference).10
.20

Amended and Restated Schedule of
    Non-Employee
    Director Compensation (Filed as Exhibit 10.1 to
    Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2008 and incorporated herein
    by reference.)10
.21

Form of Restricted Stock Unit Agreement Granted Under the 1999
    Stock Incentive Plan (Filed as Exhibit 10.2 to
    Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2007 and incorporated
    herein by reference).*10
.22

CEO Restricted Stock Unit Grant Agreement Granted Under the 1999
    Stock Incentive Plan (Filed as Exhibit 10.3 to
    Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2007 and incorporated
    herein by reference).*10
.23

Form of 2008 CEO Restricted Stock Unit Agreement Granted Under
    the 1999 Stock Incentive Plan (Filed as Exhibit 10.2 to
    Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2008 and incorporated
    herein by reference).*10
.24

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.) 95




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##### Table of Contents



Exhibit No.

Description10
.25

Form of Non-Qualified Stock Option Agreement Under the 2008
    Equity Compensation Plan*10
.26

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
.27

Radio Station License Agreement to Receive and Use Arbitron PPM
    Data and Estimates by and between Arbitron and Clear Channel
    Broadcasting, Inc. dated June 26, 2007 (Filed as
    Exhibit 10.1 to Arbitrons Quarterly Report on
    Form 10-Q
    for the quarter ended June 30, 2007 and incorporated herein
    by reference.)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.       96




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##### Table of Contents



SIGNATURES    ARBITRON INC.
  By:
    /s/  Michael
    P. Skarzynski         Signature

Title

Date/s/  Michael
    P. SkarzynskiMichael
    P. Skarzynski

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

March 2, 2009/s/  Sean
    R. CreamerSean
    R. Creamer

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

March 2, 2009*Stephen
    B. Morris

Chairman*Shellye
    L. Archambeau

Director*David
    W. Devonshire

Director*Philip
    Guarascio

Director*William
    T. Kerr

Director*Larry
    E. Kittelberger

Director*Luis
    B. Nogales

Director*Richard
    A. Post

Director*By:

/s/  Timothy
    T. SmithTimothy
    T. Smith 
    Attorney-in-Fact



March 2, 2009  97