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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to ______
Commission file number 0-13020
------------------------------
WESTWOOD ONE, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3980449
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
40 West 57th Street, 5th Floor, New York, NY 10019
(Address of principal executive offices) (Zip Code)
(212) 641-2000
Registrant's telephone number, including area code
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes X No ___
Number of shares of Stock Outstanding at November 10, 2003 (excluding treasury
shares):
Common Stock, par value $.01 per share - 99,282,789 shares
Class B Stock, par value $.01 per share - 703,466 shares
WESTWOOD ONE, INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3. Qualitative and Quantitative Disclosures
About Market Risk 13
Item 4. Controls and Procedures 13
PART II. OTHER INFORMATION
Exhibits and Reports on Form 8K 14
SIGNATURES 16
Item 1 - Financial Statements
WESTWOOD ONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
------------- ------------
2003 2002
---- ----
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 13,427 $ 7,371
Accounts receivable, net of allowance for doubtful accounts
of $4,855 (2003) and $11,757 (2002) 124,179 131,676
Other current assets 12,920 14,581
----------- -----------
Total Current Assets 150,526 153,628
PROPERTY AND EQUIPMENT, NET 51,378 53,699
GOODWILL 990,192 990,192
INTANGIBLE ASSETS, NET 7,946 9,647
OTHER ASSETS 58,339 59,146
----------- -----------
TOTAL ASSETS $ 1,258,381 $ 1,266,312
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 27,019 $ 24,809
Other accrued expenses and liabilities 66,020 65,277
Current maturities of long-term debt 85,000 -
----------- -----------
Total Current Liabilities 178,039 90,086
LONG-TERM DEBT 203,042 232,135
DEFERRED INCOME TAXES 33,731 30,733
OTHER LIABILITIES 9,072 10,318
----------- -----------
TOTAL LIABILITIES 423,884 363,272
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock: authorized 10,000 shares, none outstanding - -
Common stock, $.01 par value: authorized, 271,023 shares;
issued and outstanding, 100,030 (2003) and 103,989 (2002) 1,000 1,040
Class B stock, $.01 par value: authorized, 3,000 shares:
issued and outstanding, 704 (2003 and 2002) 7 7
Additional paid-in capital 549,777 684,311
Accumulated earnings 287,941 218,981
----------- -----------
838,725 904,339
Less treasury stock, at cost; 140 (2003) and 35 (2002) shares (4,228) (1,299)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 834,497 903,040
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,258,381 $ 1,266,312
=========== ===========
See accompanying notes to consolidated financial statements
3
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
2003 2002 2003 2002
---- ---- ---- ----
GROSS REVENUES $156,050 $155,738 $455,900 $466,704
Less Agency Commissions 21,370 21,909 62,750 65,767
-------- -------- -------- --------
NET REVENUES 134,680 133,829 393,150 400,937
-------- -------- -------- --------
Operating Costs 83,274 85,268 261,830 263,815
Depreciation and Amortization 2,889 2,879 8,629 8,580
Corporate General and Administrative Expenses 1,735 2,202 5,026 6,003
-------- -------- -------- --------
87,898 90,349 275,485 278,398
-------- -------- -------- --------
OPERATING INCOME 46,782 43,480 117,665 122,539
Interest Expense 2,546 1,682 7,493 5,117
Other Income (8) (27) (44) (103)
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 44,244 41,825 110,216 117,525
INCOME TAXES 16,534 15,123 41,256 42,906
-------- -------- -------- --------
NET INCOME $27,710 $26,702 $68,960 $74,619
======== ======== ======== ========
NET INCOME PER SHARE:
BASIC $ .28 $ .25 $ .68 $ .70
======== ======== ======== ========
DILUTED $ .27 $ .25 $ .66 $ .68
======== ======== ======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 100,575 105,962 101,803 106,447
======== ======== ======== ========
DILUTED 102,868 108,815 104,232 109,638
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
4
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine Months Ended
September 30,
-----------------
2003 2002
---- ----
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $68,960 $74,619
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 8,629 8,580
Deferred taxes 2,998 3,028
Other 477 418
------- -------
81,064 86,645
Changes in assets and liabilities:
Decrease in accounts receivable 7,497 1,273
Decrease in other assets 1,661 1,339
Increase in accounts payable and accrued liabilities 4,366 36,344
------- -------
Net Cash Provided By Operating Activities 94,588 125,601
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures (3,307) (3,298)
Acquisition of companies and other (63) (762)
------- -------
Net Cash Used For Investing Activities (3,370) (4,060)
------- -------
CASH PROVIDED BEFORE FINANCING ACTIVITIES 91,218 121,541
------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Issuance of common stock 5,867 28,024
Borrowings under bank and other long-term obligations 55,000 38,500
Debt repayments and payments of capital lease obligations (419) (247)
Repurchase of common stock (145,610) (132,425)
Repurchase of warrants from related party - (51,070)
--------- --------
NET CASH (USED IN) FINANCING ACTIVITIES (85,162) (117,218)
--------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS 6,056 4,323
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 7,371 4,509
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $13,427 $ 8,832
======== ========
See accompanying notes to consolidated financial statements
5
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
NOTE 1 - Basis of Presentation:
- ------------------------------
The accompanying consolidated balance sheet as of September 30, 2003, the
consolidated statements of operations for the three and nine month periods ended
September 30, 2003 and 2002 and the consolidated statements of cash flows for
the nine months ended September 30, 2003 and 2002 are unaudited, but in the
opinion of management include all adjustments necessary for a fair presentation
of the financial position and the results of operations for the periods
presented. These financial statements should be read in conjunction with the
Company's Annual Report on Form 10-K, filed with the Securities and Exchange
Commission.
NOTE 2 - Reclassification:
- -------------------------
Certain prior period amounts have been reclassified to conform to the
current presentation.
NOTE 3 - Earnings Per Share:
- ---------------------------
Net income per share is computed in accordance with SFAS No. 128. Basic
earnings per share excludes all dilution and is calculated using the weighted
average number of shares outstanding in the period. Diluted earnings per share
reflects the potential dilution that would occur if all financial instruments
which may be exchanged for equity securities were exercised or converted to
Common Stock.
The Company has issued options and warrants which may have a dilutive
effect on reported earnings if they were exercised or converted to Common Stock.
The following numbers of shares related to options and warrants were added to
the basic weighted average shares outstanding to arrive at the diluted weighted
average shares outstanding for each period:
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2003 2002 2003 2002
---- ---- ---- ----
Options 2,293 2,853 2,429 2,981
Warrants - - - 210
NOTE 4 - Related Party Transactions:
- -----------------------------------
The Company has several agreements with Infinity Broadcasting Corporation,
a wholly owned subsidiary of Viacom Inc, and its affiliated companies
("Viacom"). Under the terms of a Management Agreement, which expires March 31,
2009, the Company is managed by Viacom. For the three month periods ended
September 30, 2003 and 2002 Viacom earned cash compensation of approximately
$700 and $1,600, respectively and $2,100 and $4,000, respectively, for the nine
month periods under the Management Agreement. In addition to earning cash
compensation under the Management Agreement, Viacom was granted warrants to
purchase the Company's Common Stock. The fair market value of the warrants
issued to Viacom is amortized to expense over the term of the Agreement. For the
three month periods ended September 30, 2003 and 2002, amortization expense for
the warrants was approximately $350 and $350, respectively and $1,100 and
$1,100, respectively, for the nine month periods.
In connection with the issuance of warrants to Viacom in May 2002 for
management services to be provided to the Company in the future, the Company has
reflected the fair value of the warrant issuance of $48,530 as a component of
other assets with a corresponding increase to additional paid in capital in the
accompanying balance sheet. Upon commencement of the term of the service period
to which the warrants relate, the Company will amortize the cost of the warrants
issued to operations ratably over the five-year service period.
6
In addition to the Management Agreement, the Company enters into
transactions with Viacom in the normal course of business. Such arrangements
include a Representation Agreement (including a related News Programming
Agreement, a License Agreement and a Technical Services Agreement) to operate
the CBS Radio Networks, affiliation agreements with many of Viacom's radio
stations and the purchase of programming rights from Viacom. The Management
Agreement provides that all transactions between the Company and Viacom or its
affiliates must be on a basis that is at least as favorable to the Company as if
the transaction were entered into with an independent third party. In addition,
subject to specified exceptions, all agreements between the Company and Viacom
must be approved by the Company's Board of Directors. For the three month
periods ended September 30, 2003 and 2002, the Company incurred expenses
aggregating approximately $19,200 and $19,900, respectively, and $60,600 and
$57,800, respectively, for the nine month periods for the Representation
Agreement, affiliation agreements and the purchase of programming rights from
Viacom.
NOTE 5 - Debt:
- -------------
At September 30, 2003 the Company had outstanding borrowings of $200,000
pursuant to its outstanding notes and $85,000 under its bank revolving credit
facility. In addition, the Company had available borrowings of $117,500 under
its bank revolving credit facility. As the Company's revolving credit facility
matures on September 30, 2004, all borrowings under the facility are classified
as current.
The estimated fair value of the Company's interest rate swaps at September
30, 2003 was $3,042.
NOTE 6 - Insurance Settlement:
- -----------------------------
The Company reached a settlement with its insurance carriers related to
business interruption claims attributable to the September 11, 2001 terrorist
attacks. Proceeds, which approximate $2,598, were recorded as a reduction of
Operating Costs.
7
NOTE 7 - Stock Options:
- ----------------------
The Company applies APB 25 and related interpretations in accounting for
its stock option plans. Accordingly, no compensation expense has been recognized
for its plans. For the three and nine-month periods ended September 30, 2003 and
2002, had compensation cost been determined in accordance with the methodology
prescribed by SFAS 123, the Company's net income and earnings per share would
have been reduced by approximately $2,209 and $2,047 ($.02 per basic and diluted
share) for the three month periods, respectively and $6,364 and $6,088 ($.06 per
basic and diluted share) for the nine month periods, respectively.
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
---------------------------- ---------------------------
2003 2002 2003 2002
---- ---- ---- ----
Net Income as Reported $27,710 $26,702 $68,960 $74,619
Deduct: Total Stock Based
Employee Compensation Expense,
Net of Tax 2,209 2,047 6,364 6,088
------- ------- ------- -------
Pro Forma Net Income $25,501 $24,655 $62,596 $68,531
======= ======= ======= =======
Net Income Per Share:
Basic - As Reported $.28 $.25 $.68 $.70
==== ==== ==== ====
Basic - Pro Forma $.25 $.23 $.62 $.64
==== ==== ==== ====
Diluted - As Reported $.27 $.25 $.66 $.68
==== ==== ==== ====
Diluted - Pro Forma $.25 $.23 $.60 $.63
==== ==== ==== ====
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (In thousands, except per share amounts)
Management's discussion and analysis should be read in conjunction with the
Consolidated Financial Statements and related Notes and the Company's Annual
Report on Form 10-K for the year ended December 31, 2002.
Discussions included herein related to "revenue" or "net revenues"
corresponds to the financial statement caption of Net Revenues on the Company's
Consolidated Statements of Operations. The principal components of Operating
costs are personnel costs (exclusive of corporate personnel), affiliate
compensation, broadcast rights fees, program production and distribution costs,
sales related expenses (including bad debt expenses, commissions, and
promotional and advertising expenses), expenses related to the Company's
representation agreement with Viacom and news expenses. Corporate general and
administrative expenses are primarily comprised of costs associated with the
Viacom Management Agreement, personnel costs and other administrative expenses.
Results of Operations
- ---------------------
Three Months Ended September 30, 2003 Compared
With Three Months Ended September 30, 2002
- ------------------------------------------
Westwood One derives substantially all of its revenue from the sale of
advertising time to advertisers. Net revenue increased $851, or 1%, to $134,680
in the third quarter of 2003 from $133,829 in the comparable prior year quarter.
Net revenue was affected by a softening of advertiser sales after the
commencement of the war with Iraq and the continuing weak economic climate. The
increase in the quarter was due principally to higher revenue resulting from
increased rates charged for national sports programming ($1,417), partially
offset by continued weakness in local revenue associated with traffic and
information programming particularly in the Texas and Chicago markets.
Operating costs decreased $1,994, or 2%, to $83,274 in the third quarter of
2003 from $85,268 in the third quarter of 2002. The decrease in operating costs
was attributable to proceeds from an insurance settlement related to claims
attributable to the September 11, 2001 terrorist attacks ($2,598). Excluding
this item, operating costs increased $604, or approximately 1%, in the quarter.
That increase is primarily attributable to increases in insurance premiums for
all coverages ($207) and increased costs to air National Football League
programming, partially offset by lower employee related expenses resulting from
lower effective commissions earned by the Company's sales personnel.
Depreciation and amortization was $2,889 in the third quarter of 2003
compared with $2,879 in the second quarter of 2002.
Corporate general and administrative expenses decreased $467, or 21%, to
$1,735 in the third quarter of 2003 from $2,202 in the comparable 2002 quarter.
The decrease is principally attributable to lower incentive compensation expense
to related parties partially offset by higher expenses associated with new
corporate governance regulations.
9
Operating income increased $3,302, or 8%, to $46,782 in the third quarter
of 2003 from $43,480 in the third quarter of 2002. The increase is principally
attributable to an insurance settlement and higher revenue.
Interest expense increased 51% to $2,546 in the third quarter of 2003 from
$1,682 in 2002. The increase was attributable to higher debt outstanding in the
third quarter of 2003 and higher average interest rates as a result of the
Company's issuance of $200 million in a combination of 7 and 10-year fixed rate
Senior Unsecured Notes in the fourth quarter of 2002.
Income tax expense in the third quarter of 2003 was $16,534 compared with
$15,123 in the third quarter of 2002. The Company's effective income tax rate
was approximately 37.5% in 2003 compared with 36.5% in 2002. The increase in
effective income tax rate was principally attributable to higher state taxes
resulting from recently enacted tax law changes in the states in which we
operate.
Net income in the third quarter of 2003 increased $1,009, or 4%, to $27,710
($.28 per basic share and $.27 per diluted share) from $26,702 ($.25 per basic
and diluted share) in the third quarter of 2002. Net income per basic and
diluted share rose 9% and 10%, respectively.
Weighted average shares outstanding used to compute basic and diluted
earnings per share decreased 5% to 100,575 and 102,868, respectively, in the
third quarter of 2003 from 105,962 and 108,815 in the third quarter of 2002. The
decrease is principally attributable to the Company's stock repurchase program.
Nine Months Ended September 30, 2003 Compared
With Nine Months Ended September 30, 2002
- -----------------------------------------
Net revenue for the first nine months of 2003 decreased $7,787, or 2% to
$393,150 from $400,937 in the first nine months of 2002. The decrease in net
revenue was attributable to the non-recurrence of approximately $6,000 of
revenue associated with the Company's exclusive radio broadcast of the Winter
Olympics in 2002, a softening of advertiser sales prior to and immediately after
the commencement of the war with Iraq, a weak economic climate that affected
primarily local revenue associated with the Company's traffic and information
programming (with the Texas, San Francisco and Chicago markets being primarily
affected), and reduced revenue of approximately $900 generated from providing
governmental entities with traffic information due to the expiration of
contracts, partially offset by approximately $3,300 of revenue attributable to
new programming.
Operating costs were $261,830 in the first nine months of 2003 compared
with $263,815 in the first nine months of 2002, a decrease of $1,985, or 1%.
Increases in expenses associated with new program offerings, insurance and news
costs attributable to coverage of the war with Iraq were offset by the
non-recurrence of expenses attributable to the Company's broadcast of the Winter
Olympics, an insurance settlement ($2,598), and lower employee related expenses,
principally resulting from lower effective commissions earned by the Company's
sales personnel.
Depreciation and amortization was $8,629 in the first nine months of 2003
as compared with $8,580 in the first nine months of 2002.
10
Corporate general and administrative expenses in the first nine months of
2003 decreased $977, or 16%, to $5,026 from $6,003 in the comparable 2002
period. The decrease is principally attributable to lower incentive compensation
expense to a related party partially offset by higher expenses associated with
new corporate governance regulations.
Operating income decreased $4,874, or 4%, to $117,665 in the first nine
months of 2003 from $122,539 in the comparable 2002 period. The decrease was
principally attributable to lower revenues in the Company's second quarter of
2003.
Interest expense increased 46% to $7,493 in the first nine months of 2003
from $5,117 in the comparable 2002 period. The increase results principally from
higher debt levels and higher average interest rates.
Net income decreased 8% to $68,960 ($.68 per basic share and $.66 per
diluted share) in the first nine months of 2003 from $74,619 ($.70 per basic
share and $.68 per diluted share) in the comparable 2002 period. Net income per
basic and diluted share decreased 3% in the first nine months of 2003 from the
comparable 2002 period.
Weighted average shares outstanding used to compute basic and diluted
earnings per share decreased approximately 5% to 101,803 and 104,232,
respectively, in the first nine months of 2003 compared with 106,447 and 109,638
in the comparable 2002 period. The decrease is principally attributable to the
Company's stock repurchase program.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The business is financed through cash flows from operations and the
issuance of debt and equity. The Company continually projects anticipated cash
requirements, which include share repurchases, acquisitions, capital
expenditures, and principal and interest payments on its outstanding
indebtedness, as well as cash flows generated from operating activity available
to meet these needs. Any net cash funding requirements are financed with
short-term borrowings and long-term debt.
At September 30, 2003, the Company's cash and cash equivalents were
$13,427, a increase of $6,056 from the December 31, 2002 balance.
For the nine months ended September 30, 2003 versus the comparable prior
year period, net cash from operating activities decreased $31,013. The reduction
is primarily attributable to an increase in cash taxes paid resulting from lower
tax benefits from the exercise of stock options and warrants.
At September 30, 2003, the Company had available borrowings of $117,500 on
its revolving credit facility. Pursuant to the terms of the facility, the amount
of available borrowings declines by $7,500 at the end of each quarter in 2003
and $10,000 per quarter in 2004 until its termination date of September 30,
2004. Accordingly all outstanding borrowings under the revolving credit facility
have been classified as current on the Company's balance sheet. The Company
believes it will be able to replace its maturing revolving credit facility with
a new facility prior to its September 30, 2004 expiration, however no assurance
can be given that the Company will be successful in replacing the facility. In
the event the facility is not replaced, the Company believes its operating cash
flows will be sufficient to repay the debt as it becomes due. During 2003, the
Company has used its available cash and bank borrowings to repurchase its Common
11
Stock. For the nine months ended September 30, 2003, the Company repurchased
approximately 4,412 shares of Common Stock at a cost of $145,610. In the month
of October, the Company repurchased an additional 156 shares of Common Stock at
a cost of approximately $4,843.
The Company's business does not require, and is not expected to require,
significant cash outlays for capital expenditures.
The Company believes that its cash, other liquid assets, operating cash
flows and available bank borrowings, taken together, provide adequate resources
to fund ongoing operating requirements.
Other Information
- -----------------
As a result of the extension of the Management Agreement with Viacom that
was approved by Shareholders on May 29, 2002, starting with the second quarter
of 2004 and through the first quarter of 2009, the Company's quarterly
amortization expense will increase by approximately $2,100. The increase will
result from the amortization of the $48,530 fair market value of the Viacom
warrants issued as part of the extension of the Management Agreement.
12
Item 3. Qualitative and Quantitative Disclosures about Market Risk
- ------------------------------------------------------------------
In the normal course of business, the Company employs established policies
and procedures to manage its exposure to changes in interest rates using
financial instruments. The Company uses derivative financial instruments
(fixed-to-floating interest rate swap agreements) for the purpose of hedging
specific exposures and holds all derivatives for purposes other than trading.
All derivative financial instruments held reduce the risk of the underlying
hedged item and are designated at inception as hedges with respect to the
underlying hedged item. Hedges of fair value exposure are entered into in order
to hedge the fair value of a recognized asset, liability, or a firm commitment.
In order to achieve a desired proportion of variable and fixed rate debt,
in December 2002, the Company entered into a seven year interest rate swap
agreement covering $25 million notional value of its outstanding borrowing to
effectively float the interest rate at three-month LIBOR plus 74 basis points
and two ten year interest rate swap agreements covering $75 million notional
value of its outstanding borrowing to effectively float the interest rate at
three-month LIBOR plus 80 basis points.
These swap transactions allow the Company to benefit from short-term
declines in interest rates. The instruments meet all of the criteria of a
fair-value hedge. The Company has the appropriate documentation, including the
risk management objective and strategy for undertaking the hedge, identification
of the hedging instrument, the hedged item, the nature of the risk being hedged,
and how the hedging instrument's effectiveness offsets the exposure to changes
in the hedged item's fair value or variability in cash flows attributable to the
hedged risk.
With respect to the borrowings pursuant to the Company's revolving credit
facility, the interest rate on the borrowings is based on the prime rate plus an
applicable margin of up to .25%, or LIBOR plus an applicable margin of up to
1.25%, as chosen by the Company. Historically, the Company has typically chosen
the LIBOR option with a three month maturity. Every .25% change in interest
rates has the effect of increasing or decreasing our annual interest expense by
$5,000 for every $2 million of outstanding debt.
The Company continually monitors its positions with, and the credit quality
of, the financial institutions that are counterparties to its financial
instruments, and does not anticipate nonperformance by the counterparties.
The Company's receivables do not represent a significant concentration of
credit risk due to the wide variety of customers and markets in which the
Company operates.
Item 4. Controls and Procedures
- -------------------------------
The Company's Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of the Company's disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e)) of the Securities Exchange Act of
1934, as amended) as of the end of the period covered by this report, and have
concluded that the Company's disclosure controls and procedures are effective
for gathering, analyzing and disclosing the information we are required to
disclose in our reports filed under the Securities and Exchange Act of 1934. No
changes in the Company's internal control over financial reporting occurred
during the Company's last fiscal quarter that had materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.
13
PART II OTHER INFORMATION
Items 1 through 5
These items are not applicable.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
3.1 Restated Certificate of Incorporation, as filed on October 25, 2002.
(14)
3.2 Bylaws of Registrant as currently in effect. (6)
4.1 Note Purchase Agreement, dated December 3, 2002, between Registrant and
the Purchasers. (15)
*10.1 Employment Agreement, dated April 29, 1998, between Registrant and
Norman J. Pattiz. (8)
10.2 Form of Indemnification Agreement between Registrant and its Directors
and Executive Officers. (1)
10.3 Amended and Restated Credit Agreement, dated September 30, 1996,
between Registrant and The Chase Manhattan Bank and Co-Agents. (6)
10.4 Second Amended and Restated Credit Agreement dated November 17, 2000,
between Registrant and The Chase Manhattan Bank and Co-Agents. (12)
10.5 Amendment One dated October 24, 2002 to the Amended and Restated
Credit Agreement. (15)
10.6 Purchase Agreement, dated as of August 24, 1987, between Registrant
and National Broadcasting Company, Inc. (2)
10.7 Agreement and Plan of Merger among Registrant, Copter Acquisition
Corp. and Metro Networks, Inc. dated as of June 1, 1999 (9)
*10.8 Amendment No. 1 to the Agreement and Plan Merger, dated as of August
20, 1999, by and among Registrant, Copter Acquisition Corp. and
Metro Networks, Inc. (10)
10.9 Management Agreement, dated as of March 30, 1999, and amended on April
15, 2002 between Registrant and Infinity Broadcasting Corporation.
(9) (13)
10.10 Representation Agreement, dated as of March 31, 1997, between
Registrant and CBS, Inc. (7) (13)
10.11 Westwood One Amended 1999 Stock Incentive Plan. (9)
10.12 Westwood One, Inc. 1989 Stock Incentive Plan. (3)
10.13 Amendments to the Westwood One, Inc. Amended 1989 Stock Incentive
Plan. (4) (5)
10.14 Leases, dated August 9, 1999, between Lefrak SBN LP and Westwood One,
Inc. and between Infinity and Westwood One, Inc. relating to New York,
New York offices. (11)
31.a Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
31.b Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
32.a Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.b Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
14
(b) Reports on Form 8-K
On July 1, 2003, Registrant filed a current report on Form 8-K updating its
financial guidance for 2003.
On August 5, 2003, Registrant filed a current report on Form 8-K announcing
its second quarter 2003 financial results.
*********************************
*Indicates a management contract or compensatory plan
(1) Filed as part of Registrant's September 25, 1986 proxy statement and
incorporated herein by reference.
(2) Filed an exhibit to Registrant's current report on Form 8-K dated September
4, 1987 and incorporated herein by reference.
(3) Filed as part of Registrant's March 27, 1992 proxy statement and
incorporated herein by reference.
(4) Filed as an exhibit to Registrant's July 20, 1994 proxy statement and
incorporated herein by reference.
(5) Filed as an exhibit to Registrant's May 17, 1996 proxy statement and
incorporated herein by reference.
(6) Filed as an exhibit to Registrant's Quarterly report on Form 10-Q for the
quarter ended September 30, 1996 and incorporated herein by reference.
(7) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1997 and incorporated herein by reference.
(8) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1998 and incorporated herein by reference.
(9) Filed as an exhibit to Registrant's August 24, 1999 proxy statement and
incorporated herein by reference.
(10) Filed as an exhibit to Registrant's current report on Form 8-K dated
October 1, 1999 and incorporated herein by reference.
(11) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999 and incorporated herein by reference.
(12) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the year
ended December 31, 2000 and incorporated herein by reference.
(13) Filed as an exhibit to Registrant's April 29, 2002 proxy statement and
incorporated herein by reference.
(14) Filed as an exhibit to Registrant's Quarterly report on Form 10-Q for the
quarter ended September 30, 2002 and incorporated herein by reference.
(15) Filed as an exhibit to Registrant's current report on Form 8-K dated
December 3, 2002 and incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WESTWOOD ONE, INC.
By:/S/ Shane Coppola
-------------------------
Shane Coppola
Chief Executive Officer
By: /S/ Jacques Tortoroli
-------------------------
Jacques Tortoroli
Chief Financial Officer
Dated: November 14, 2003
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