Annual Reports 10K-1999

To Westwood One Shareholders:

The year 1999 was a great one for Westwood One, a year of exceptional achievement, financial performance and dynamic growth. We solidified our position as the largest producer and distributor of programming to the radio stations of America, and we grew into the leading provider of traffic and local content in the radio broadcasting industry. Across the scope of our business, we built strength with audiences, affiliates and advertisers, and delivered on the power and reach that derives from being the leader at what we do.

Reflecting on these and other initiatives, our financial performance in 1999 was nothing short of superb. Net revenues increased 38% from $259 million in 1998 to $358 million in 1999. The increase was due to our merger with Metro Networks as well as higher advertising rates at both the Company's Network and Shadow Traffic operations. Excluding the Metro acquisition, the Company's net revenues grew approximately 12% from the comparable 1998 period. Operating income increased 82% to $61 million in 1999 from $33 million in 1998, and operating cash flow (defined as operating income plus depreciation and amortization) grew 74% over the prior year, from $52 million in 1998 to $91 million in the year just past.

Radio revenues have grown dramatically during the 1990s. The vitality of the radio business itself, and the diversity in program formats, has intensified competition among stations for audiences and advertisers. With our more than 150 news, sports, music, talk, entertainment programs, features, live events and 24-hour, satellite-delivered continuous play music formats, Westwood One is ideally positioned to serve virtually every type of radio station and every advertisers seeking to target a particular audience segment. Across the breadth of the industry, if a station needs programming, Westwood One's got it. It's that simple. In the world of Sports, for instance, CBS Radio Sports on Westwood One continued to deliver more brand name sports programming to affiliates and advertisers than any other radio network. Our NFL coverage generated record revenues and reached an unprecedented 14 million listeners via nearly 500 radio stations across America, culminating with SuperBowl XXXIII in Miami in January 2000. During the year, Westwood One/CBS Radio Sports was also active in kicking off new NFL programs, including "The NFL Today," "In The Huddle" hosted by Boomer Esiason and Chris Russo, and "Players Inc." -- with new programs scheduled for launch in 2000, including "John Madden's Sports Quiz." We also led the pack with comprehensive coverage of NCAA basketball, broadcasting 44 regular season games and capping the season with the Final Four/NCAA Basketball Championship in March 2000. In golf, our peerless coverage included such premier events as The Masters, The US Open, The US Senior Open and The US Women's Open. Our five-year extension with the National Hockey League ensures us exclusive national radio rights for live coverage of NHL regular season games, the NHL Game of the Week, the NHL All-Star game, the Conference Finals, and The Stanley Cup Championship.

Other world-class sports events which we syndicated during 1999 included NCAA Football (showcasing several popular college bowl games), Notre Dame Football and HBO boxing. We also eagerly anticipate the opportunity to present exclusive radio coverage of the Olympic Games through the year 2008, including the Summer Games in Sydney, Australia in September 2000. These are major programming events and advertising opportunities that will reinforce Westwood One's status as the leader of its industry in the new millennium.

As the only radio network news organization that provides customized reports to more than 80 markets, Westwood One in 1999 was able to not only break important national news stories, but also to customize that coverage from the scene for individual affiliates. In March 1999, we expanded our portfolio of brand name news programming with the creation of the CBS MarketWatch.com Radio Network to provide affiliates and advertisers with round-the-clock financial market updates. As of April 2000, the CBS MarketWatch.com Radio Network had grown to serve 18 of the top 20 markets in America. During 1999, Westwood One maintained its leadership role as the top provider of special event music programming to radio stations around the world -- continuing to deliver the biggest artists in all music formats. Our customized programming of the Grammy Awards reached record audiences worldwide with a combined estimate of some 56 million listeners in the United States, Europe, Asia, Canada and Latin America. Our exclusive presentation of Woodstock '99 on more than 150 affiliates drew more than 2.5 million listeners, and just as popular was our coverage of the MTV Video Music Awards, the MTV Movie Awards, and country music album premieres and programming by such
chart-topping artists as Garth Brooks, Shania Twain, The Dixie Chicks and Alan Jackson.

Throughout 1999 Westwood One showcased the very biggest names in entertainment and news exclusively to radio. From "Imus in the Morning" with the inimitable Don Imus, to Martha Stewart's popular lifestyle feature "askMartha" ... from "The Late Show with David Letterman's Top Ten List" to Jay Leno's monologue from the "Tonight Show"... from Charles Osgood's "The Osgood File" to CBS Radio News' "Dan Rather Reporting"... we offered audiences and advertisers across the country the widest, most informative and high impact programming available.

Westwood One filled the nation's airwaves in 1999 with a lineup of the most exciting, provocative and popular talk talent on radio today, including Tom Leykis, The Sports Junkies, G. Gordon Liddy, Jim Bohannon and Bruce Williams. In 2000 we enhanced this impressive list of powerhouse personalities with the launch of two new hot talk shows - "The Sports Guys" and "Ron and Fez Dot com."

Internationally in 1999, Westwood One continued to deliver music, news, sports and entertainment and special event programming in ready-to-air or component form. Our extensive interview library and live recording archives allowed broadcasters worldwide to develop customized programming that targeted specific markets and was adapted to local languages.

1999's acquisition of Metro Networks, combined with the premier traffic, news, sports and weather operations of Shadow Broadcast Services, has made our Company the largest supplier of local information to the radio broadcasting industry. In total we now operate in over 80 markets nationally and service more than 2000 radio and television station affiliates. Our Metro Traffic Control unit is the biggest -- and only -- national supplier of radio and television traffic services in the United States. "Metro" also connotes leadership in news (we have resources in more than 100 markets); weather (including customized local forecasts with 24-hour a day satellite feeds from the National Weather Service, plus live emergency coverage from the National Hurricane Center); and college and professional sports. What's more, as a successor to traditional wire, Metro Source's digital satellite/Internet distribution/information system allows radio affiliates to rapidly and cost effectively view, write and edit the latest news and features in both text and audio formats.

The acquisition of Metro Networks also gave us Metro Source, a continuously updated, satellite/Internet-distributed digital information system that allows our radio and television affiliates to rapidly and cost effectively receive, view, edit and report the latest news, features and other programming. We also moved to launch more than half a dozen new alliances in information services including Traffic and New Media. Among our partners in these initiatives were Etak, an division of Sony Corporation, CBS SportsLine, the U.S. Department of Transportation, America Online, Mapquest.com, Yahoo! and Palm Computing.

In 1999, more than 180 television stations nationwide subscribed to our 24 hours a day, seven days a week Television Traffic Services. Metro TV Services supplied television affiliates with breaking video news and other local coverage, including syndicated scholastic sports programming. Also in 1999, Metro TV Service created a new national morning news network. Additionally, we made significant investments to greatly expand our infrastructure of fixed position and helicopter-mounted camera systems. This further solidified our position as the predominant supplier of local, breaking video news to the television industry.

The rapidly evolving new technology arena is providing Westwood One with a historic opportunity to take the same leadership position in non-broadcast businesses as it has traditionally in broadcasting. Already a large supplier to the wireless telephone industry, in 1999 the Company continued its drive to provide customized local traffic and other information to subscribers via our STAR JAM and STAR FIND services. In 1999 we provided these services to leading wireless companies, including Bell Atlantic Mobile, AT&T Wireless, GTE, Bell South, Ameritech, Sprint and Southwestern Bell.

In conjunction with ETAK, a digital mapping and software company owned by Sony, Westwood One also worked with a variety of companies to offer traveler information products via wireless systems as well as the Internet. We are aggressively positioning ourselves to become a leading supplier of local traffic and other information in the rapidly evolving field of Intelligent Transportation Systems, working on projects for the United States Department of Transportation in such major markets as San Francisco, Phoenix and Seattle.

Other non-broadcast initiatives taken by the Company in 1999 included a venture with AOL to provide local news reports to Digital City; a test project to provide customized traffic reports to PALM VII, and an agreement to supply digital traffic content to Mapquest.com, the leader in mapping and direction services on the Internet. In addition, we launched our WebTraffic and WebNews products in 1999, whereby we provide customized real-time local traffic and news Web sites for our radio and television affiliates.

Westwood One enters the new millennium secure in its long-held position of leadership in radio programming and related services. As the media world grows more diffuse and competitive, the need of advertisers and stations to reach the public via the Company's products and services will become greater and more intense. For this reason, Westwood One has made it a strategic priority to partner with new media companies in order to serve the online and wireless communities with the same unparalleled traffic, information and news services that we have provided to broadcasters for over two decades. Going forward our goal is to be nothing less than the very best in reaching audiences - and all audiences -- in the entire media cosmos.

In closing I would like to thank our management team and employees across the United States for their contributions to Westwood One's terrific performance in 1999. I am confident that we will create even greater value for shareholders in 2000 and the years that lie ahead.