Westwood One, Inc. Reports Record First Quarter 2005 Revenues, Initiates Cash Dividend and Increases Size of Repurchase Program Authorization

Westwood One, Inc. Reports Record First Quarter 2005 Revenues, Initiates Cash Dividend and Increases Size of Repurchase Program Authorization

Revenues Up 3.5% to Record $134.1 Million

NEW YORK, May 4 /PRNewswire-FirstCall/ -- Westwood One, Inc. (NYSE:WON) Revenues for the first quarter of 2005 were $134.1 million compared with $129.6 million for the first quarter of 2004, an increase of approximately $4.5 million, or 3.5%. For the first quarter of 2005, the Company benefited from a 5.8% and 1.1% increase in revenues from local/regional and national commercial advertisements, respectively, which includes increased revenues from complementary distribution channels.

Operating income for the first quarter of 2005 was $29.2 million compared with $31.0 million in the first quarter of 2004, a decrease of approximately $1.8 million, or 5.7%. The decrease in operating income was primarily attributable to incremental amortization expenses associated with warrants issued with regard to our Management Agreement, and increased programming, production, and distribution expenses. In addition, the Company incurred in the first quarter of 2005 higher corporate governance related expenses than in the first quarter of 2004.

Net income for the first quarter of 2005 was $15.8 million compared with $17.5 million in the first quarter of 2004 a decrease of $1.8 million, or 10.0%. Net income per diluted share decreased to $.17 per share from $.18 per share in the first quarter of 2004.

Shane Coppola, President and Chief Executive Officer of Westwood One said: "We are pleased with the consistent performance of our local/regional business which is the result of our significant investments over the past two years. We are confident that we will generate similar returns in our national business as we continue to accelerate investments in network programming."

Income tax expense in the first quarter of 2005 was $9.8 million compared with $10.6 million in the comparable 2004 period, a decrease of $.8 million, or 7.5%. The Company's effective income tax rate in the first quarter of 2005 was 38.2% compared with 37.6% in the comparable period of 2004. The increase in the Company's effective tax rate is attributable to changes in state tax laws.

Weighted average fully diluted shares outstanding in the first quarter of 2005 decreased approximately 5.7%. The decrease in weighted average shares outstanding was primarily attributable to the Company's stock repurchase program. In the first quarter of 2005, the Company repurchased approximately 2.1 million shares of its common stock for approximately $48.6 million.

Non-GAAP(1) free cash flow for the first quarter of 2005 was $20.2 million compared with $19.7 million for the first quarter of 2004. On a Non-GAAP per diluted share basis free cash flow per share for the first quarter of 2005 increased to $.21 from $.20 for the first quarter of 2004, or 5%.

On April 29, 2005 the Board of Directors authorized an additional $300 million of repurchases under the Company's stock repurchase program. The authorization allows for both open market purchases as well as private transactions from time to time. Approximately $102 million remains available for stock repurchases from previous authorizations bringing the new total authorization to $402 million.

The Company also announced the initiation of a quarterly cash dividend. The first quarterly dividend of $0.10 per share of outstanding common stock will be payable on May 31, 2005, to shareholders of record on May 20, 2005. Prospectively, the declaration of dividends, and the establishment of record and payment dates, will be at the discretion of the Company's Board of Directors.

Andrew Zaref, Chief Financial Officer of Westwood One said: "Our capital structure is aligned to meet our strategic objectives and is sufficient to provide the resources necessary for growth. In addition, as the Company continues to generate significant net cash provided by operating activities we are positioned not only to grow, but also to return value to our shareholders both through our current common equity repurchase program and through the payment of a dividend."

2005 Outlook

Westwood One expects to deliver revenue growth of low-to-mid single digits, resulting in mid single digit growth in operating income before depreciation and amortization.

About Westwood One

Westwood One provides over 150 news, sports, music, talk, entertainment programs, features, live events and 24/7 Formats. Through its subsidiaries, Metro Networks/Shadow Broadcast Services, Westwood One provides local content to the radio and TV industries including news, sports, weather, traffic, video news services and other information. SmartRoute Systems manages traffic information centers for state and local departments of transportation, and markets traffic and travel content to wireless, Internet, in-vehicle navigation systems and voice portal customers. Westwood One serves more than 5,000 radio stations. Westwood One, Inc. is managed by Infinity Broadcasting Corporation, a wholly-owned subsidiary of Viacom Inc.

Certain statements in this release, including those relating to the Company's expected growth in revenues and operating income before depreciation and amortization and to the payment of quarterly dividends, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The words or phrases "guidance," "expect," "anticipate," "estimates" and "forecast" and similar words or expressions are intended to identify such forward-looking statements. In addition any statements that refer to expectations or other characterizations of future events or circumstances are forward-looking statements. Various risks that could cause future results to differ from those expressed by the forward- looking statements included in this release include, but are not limited to: changes in economic conditions in the U.S. and in other countries in which Westwood One, Inc. currently does business (both general and relative to the advertising and entertainment industries); fluctuations in interest rates; changes in industry conditions; changes in operating performance; shifts in population and other demographics; changes in the level of competition for advertising dollars; fluctuations in operating costs; technological changes and innovations; changes in labor conditions; changes in governmental regulations and policies and actions of regulatory bodies; changes in tax rates; changes in capital expenditure requirements and access to capital markets. Other key risks are described in the Company's reports filed with the U.S. Securities and Exchange Commission. Except as otherwise stated in this news announcement, Westwood One, Inc. does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

1. All Non-GAAP financial measures have been adjusted from comparable GAAP measures. A description of all adjustments and reconciliations to comparable GAAP measures for all periods presented are included within this communication.

WESTWOOD ONE, INC. SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION

The following tables set forth the Company's operating Income before Depreciation and Amortization for the three month periods ended March 31, 2005 and 2004. The Company defines "Operating Income before Depreciation and Amortization" as net income adjusted to exclude the following line items presented in its Statement of Operations: Income taxes; Other (Income); Interest expense; and Depreciation and Amortization. While this non-Generally Accepted Accounting Principles ("GAAP") measure has been relabeled to more accurately describe in the title the method of calculation of the measure, the actual method of calculating the measure now labeled Operating Income before Depreciation and Amortization is unchanged from the method previously used to calculate the measure formerly labeled EBITDA or Operating Cash Flow in prior disclosures.

The Company uses Operating Income before Depreciation and Amortization, among other things, to evaluate the Company's operating performance, to value prospective acquisitions, to determine compliance with debt covenants and as one of several components of incentive compensation targets for certain management personnel, and this measure is among the primary measures used by management for planning and forecasting of future periods. This measure is an important indicator of the Company's operational strength and performance of its business because it provides a link between profitability and operating cash flow. The Company believes the presentation of this measure is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by the Company's management, helps improve their ability to understand the Company's operating performance and makes it easier to compare the Company's results with other companies that have different financing and capital structures or tax rates. In addition, this measure is also among the primary measures used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry.

Since Operating Income before Depreciation and Amortization is not a measure of performance calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance. Operating Income before Depreciation and Amortization, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies. In addition, this measure does not necessarily represent funds available for discretionary use, and is not necessarily a measure of the Company's ability to fund its cash needs. As Operating Income before Depreciation and Amortization excludes certain financial information included in net income, users of this financial information should consider the types of events and transactions which are excluded. As required by the Securities and Exchange Commission ("SEC"), the Company provides below a reconciliation of Operating Income before Depreciation and Amortization to net income the most directly comparable amount reported under GAAP.

WESTWOOD ONE, INC. SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (In millions)

Three Months Ended March 31, 2005 2004 Operating income before depreciation and amortization $ 34.6 $ 34.2 Depreciation and amortization 5.3 3.2 Operating Income 29.2 30.9 Interest Expense and Other 3.7 2.9 Income before income taxes 25.5 28.0 Income Taxes 9.8 10.6 Net income $ 15.8 $17.5

Free cash flow is defined by the Company as net income plus depreciation and amortization less capital expenditures. The Company uses free cash flow, among other measures, to evaluate its operating performance. Management believes free cash flow provides investors with an important perspective on the cash available to service debt, make strategic acquisitions and investments, maintain its capital assets, repurchase its Common Stock and fund ongoing operations. As a result, free cash flow is a significant measure of the Company's ability to generate long term value. The Company believes the presentation of free cash flow is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. In addition, free cash flow is also a primary measure used externally by the Company's investors, analysts and peers in its industry for purposes of valuation and comparing the operating performance of the Company to other companies in its industry. Free cash flow per fully diluted weighted average share outstanding is defined by the Company as free cash flow divided by the fully diluted weighted average share outstanding.

As free cash flow is not a measure of performance calculated in accordance with GAAP, free cash flow should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance or net cash flow provided by operating activities as a measure of liquidity. Free cash flow, as the Company calculates it, may not be comparable to similarly titled measures employed by other companies. In addition, free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of the Company's ability to fund its cash needs. In arriving at free cash flow, the Company adjusts operating cash flow to remove the impact of cash flow timing differences to arrive at a measure which the Company believes more accurately reflects funds available for discretionary use. Specifically, the Company adjusts Net Cash Flows Provided by Operating Activities (the most directly comparable GAAP financial measure) for capital expenditures, deferred taxes and certain other non-cash items in addition to removing the impact of sources and uses of cash resulting from changes in operating assets and liabilities. Accordingly, users of this financial information should consider the types of events and transactions which are not reflected. The Company provides below a reconciliation of free cash flow to the most directly comparable amount reported under GAAP, net cash flow provided by operating activities.

WESTWOOD ONE, INC. SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (In millions except free cash flow per diluted share)

The following table presents a reconciliation of the Company's net cash flow provided by operating activities to free cash flow:

Three Months Ended March 31, 2005 2004

Net Cash Provided by Operating Activities $57.3 $51.2 Plus (Minus) Changes in assets and liabilities Accounts Receivable (19.0) (19.2) Prepaid & Other Assets (2.1) (2.6) Deferred Revenue 3.6 4.7 Income Taxes Payable (8.3) (5.8) Accounts Payable and Accrued and Other Liabilities (6.7) (4.8) Amounts Payable to Related Parties (3.5) (1.3) Adjustments to reconcile net income to net cash Provided by operating activities: Deferred Taxes (0.2) (1.0) Amortization of Deferred Financing costs (0.1) (0.5) Capital Expenditures (0.8) (1.0) Free Cash Flow $20.2 $19.7

Diluted Shares 94.3 100.1 Free Cash Flow per Diluted Shares $ 0.21 $ 0.20

WESTWOOD ONE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts)

Three Months Ended March 31, 2005 2004 (Unaudited)

NET REVENUES $134,082 $129,608 -------------- --------------

Operating Costs (include related party expenses of $21,415 and $22,515, respectively) 97,026 93,496

Depreciation and Amortization (includes related party warrant amortization of $2,427 and $338, respectively 5,256 3,154

Corporate General and Administrative Expenses (includes related party expenses of $759 and $703, respectively) 2,584 1,970 -------------- -------------- 104,866 98,620 -------------- -------------- OPERATING INCOME 29,216 30,988 Interest Expense 3,711 2,917 Other (Income) Expense (60) (40) -------------- -------------- INCOME BEFORE INCOME TAXES 25,565 28,111 INCOME TAXES 9,776 10,564 -------------- --------------

NET INCOME $15,789 $17,547 ========= =========

EARNINGS PER SHARE: BASIC $0.17 $0.18 ========= ========= DILUTED $0.17 $0.18 ========= =========

WEIGHTED AVERAGE SHARES OUTSTANDING: BASIC 93,696 98,003 ========= ========= DILUTED 94,331 100,068 ========= =========

WESTWOOD ONE, INC. CONSOLIDATED BALANCE SHEETS (In thousands)

March 31, December 31, 2005 2004 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $4,679 $10,932 Accounts receivable, net of allowance for doubtful accounts of $3,231 (2005) and $2,556 (2004) 123,051 142,014 Prepaid and other assets 19,057 21,400 ----------------- ----------------- Total Current Assets 146,787 174,346 PROPERTY AND EQUIPMENT, NET 45,800 47,397 GOODWILL 982,219 981,969 INTANGIBLE ASSETS, NET 5,884 6,176 OTHER ASSETS 36,020 36,391 ----------------- ----------------- TOTAL ASSETS $1,216,710 $1,246,279 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES: Accounts payable 17,336 13,135 Amounts payable to related parties 23,763 20,274 Deferred revenue 10,697 14,258 Income taxes payable 13,463 5,211 Accrued expenses and other liabilities 32,052 28,463 ----------------- ----------------- Total Current Liabilities 97,311 81,341 LONG-TERM DEBT 346,500 359,439 DEFERRED INCOME TAXES 12,694 12,541 OTHER LIABILITIES 8,290 8,465 ----------------- ----------------- TOTAL LIABILITIES 464,795 461,786 ----------------- ----------------- COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Preferred stock: authorized 10,000,000 shares, none outstanding - - Common stock, $.01 par value: authorized, 252,751,250 shares; issued and outstanding, 92,283,315 (2005) and 94,353,675 (2004) 923 944 Class B stock, $.01 par value: authorized, 3,000,000 shares: issued and outstanding, 291,796 (2005 and 2004) 3 3 Additional paid-in capital 321,706 369,036 Accumulated earnings 430,300 414,510 --------------- --------------- 752,932 784,493 Less treasury stock, at cost; 50,000 (2005) and 0 (2004) shares (1,017) - --------------- --------------- TOTAL SHAREHOLDERS' EQUITY 751,915 784,493 --------------- --------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,216,710 $1,246,279 =========== ===========

WESTWOOD ONE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

Three Months Ended March 31, 2005 2004 (Unaudited) CASH FLOW FROM OPERATING ACTIVITIES: Net income $15,789 $17,547 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,256 3,154 Deferred taxes 153 1,000 Amortization of deferred financing costs 84 458 ------------ ------------ 21,282 22,159 Changes in assets and liabilities: Accounts receivable 18,963 19,221 Prepaid and other assets 2,086 2,642 Deferred revenue (3,561) (4,646) Income taxes payable 8,286 5,784 Accounts payable and accrued expenses and other liabilities 6,749 4,764 Amounts payable to related parties 3,489 1,273 ------------ ------------ Net Cash Provided By Operating Activities 57,294 51,197 ------------ ------------ CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditures (803) (989) Acquisition of companies and other (204) 12 ------------ ------------ Net Cash Used in Investing Activities (1,007) (977) ------------ ------------ CASH FLOW FROM FINANCING ACTIVITIES: Issuance of common stock 193 5,843 Borrowings under bank and other long-term obligations 10,000 120,000 Debt repayments and payments of capital lease obligations (25,156) (100,146) Repurchase of common stock (47,577) (63,286) Deferred financing costs - (1,269) ------------ ------------ Net Cash Used in Financing Activities (62,540) (38,858) ------------ ------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (6,253) 11,362

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 10,932 8,665 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $4,679 $20,027 ======= =======

Source: Westwood One, Inc.

CONTACT: Andrew Zaref of Westwood One, Inc. +1-212-373-5311

Web site: http://www.westwoodone.com/

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