EXHIBIT 99
WESTWOOD ONE, INC.
PRESS RELEASE
FOR IMMEDIATE RELEASE
CONTACT: Andrew Zaref
(212) 373-5311
WESTWOOD ONE, INC. REPORTS OPERATING RESULTS FOR THE
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FULL-YEAR AND FOURTH QUARTER 2004
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REVENUES UP 4.3% TO RECORD $562 MILLION
New York, NY -- February 25, 2005 - Westwood One, Inc. (NYSE: WON) recorded
full-year 2004 net revenues of $562.2 million compared with $539.2 million in
2003, an increase of 4.3%. The increase in revenues is primarily attributable to
higher demand for products and services, coupled with non-comparable revenues
associated with the Company's exclusive 2004 Summer Olympic broadcast. For the
full year 2004, the Company benefited from a 5.5% and 2.9% increase in net
revenues derived from local/regional and national commercial advertisements,
respectively. For the fourth quarter 2004, net revenues rose to $151.6 million,
compared with $146.1 million in 2003's fourth quarter, reflecting higher
revenues from local/regional clients partially offset by a decline in revenues
from national sources.
Full year operating income was $165.6 million in 2004 versus $170.0 million
in 2003. The decrease in operating income was primarily attributable to costs
associated with incremental amortization expenses attributed to warrants issued
with regard to our Management Agreement, costs associated with our exclusive
broadcast of the 2004 Summer Olympic games, increased programming and
distribution costs, and higher corporate governance related expenses. In
addition, the year ended December 31, 2003 benefited from proceeds of $3.2
million from an insurance settlement related to claims attributable to the
September 11, 2001 terrorist attacks which offset reported operating expenses.
Operating income for the fourth quarter of 2004 was $51.1 million compared
with $52.4 million in 2003's fourth quarter reflecting incremental amortization
expenses, increased programming and distribution costs, unusual and infrequent
severance costs, and increased professional fees and governance costs. The
quarter ended December 31, 2003 benefited from proceeds of $.7 million from the
aforementioned insurance settlement.
Shane Coppola, President and Chief Executive Officer of Westwood One said,
"We delivered solid financial results in a difficult operating environment in
2004. Moreover, we continued to make investments in our products and services
that well position the Company for growth in 2005 and beyond. The initial return
on these investments was evidenced by the strong fourth quarter growth delivered
by our local/regional businesses which account for approximately 55% of the
Company's revenues. Furthermore, we continue to create compelling content for
existing and emerging distribution channels expanding our audience reach for
advertisers."
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Net income for the full year 2004 was $95.5 million ($.98 per basic share
and $.97 per diluted share) compared with $100.0 million ($.99 per basic share
and $.97 per diluted share) in 2003. Net income for the fourth quarter of 2004
was $29.6 million ($.31 per basic and diluted share) compared with $31.1 million
($.31 per basic and diluted share) in the same 2003 period.
Capital expenditures for 2004 were approximately $5.9 million, compared
with $4.4 million in 2003. For the fourth quarter of 2004, capital expenditures
were $.9 million, compared with $1.1 million in the comparable 2003 period.
Weighted average fully diluted shares outstanding, for the year and fourth
quarter of 2004 decreased approximately 5% and 6%, respectively, due principally
to the Company's stock repurchase program. The Company repurchased approximately
8.5 million shares of the Company's Common Stock for approximately $217 million
in 2004.
Non-GAAP(1) free cash flow for the full year 2004 was $108.1 ($1.10 per
diluted share) million compared with $107.2 ($1.03 per diluted share) million in
2003. Non-GAAP free cash flow for the fourth quarter was $34.1 million compared
with $32.9 million in the same 2003 period. On a Non-GAAP per diluted share
basis free cash flow per share for 2004 increased to $.36 from $.32, or 12.5%.
Andrew Zaref, Chief Financial Officer of Westwood One said, "Our capital
structure is well positioned for us to accomplish our business objectives. We
continue to generate significant cash flow and have used our resources to
repurchase common stock."
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 and before considering the impact of the non cash compensation
charges which will result from the required adoption of the new accounting
standards surrounding equity based compensation.
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 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
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(1) All Non-GAAP amounts 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.
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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.
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WESTWOOD ONE, INC.
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
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The following tables set forth the Company's Operating Income before
Depreciation and Amortization for the three month period and year ended December
31, 2004 and 2003. 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
compared with net income, the most directly comparable GAAP financial measure,
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.
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WESTWOOD ONE, INC.
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
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(In millions)
Three Months Ended Dec. 31, Year Ended Dec. 31,
2004 2003 2004 2003
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Operating income before depreciation
and amortization $ 56.5 $ 55.2 $ 184.0 $ 181.5
Depreciation and amortization 5.4 2.9 18.4 11.5
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Operating Income 51.1 52.3 165.6 170.0
Interest Expense and Other 2.5 2.6 11.0 10.1
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Income before income taxes 48.6 49.7 154.6 159.9
Income Taxes 19.0 18.6 59.1 59.9
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Net income $ 29.6 $ 31.1 $ 95.5 $ 100.0
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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 shres outstanding is
defined by the Company as free cash flow divided by the fully diluted weighted
average shares 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 operating cash flow (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 or 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.
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WESTWOOD ONE, INC.
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
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(In millions except per share amount)
The following table presents a reconciliation of the Company's net cash flow
provided by operating activities to free cash flow:
Three Months Ended Year Ended
Dec. 31, Dec. 31,
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2004 2003 2004 2003
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Net Cash Provided by Operating Activities $19.7 $13.3 $127.9 $107.9
Plus (Minus)
Changes in Assets and Liabilities
Accounts Receivable 18.0 11.5 6.3 4.1
Prepaid & Other Assets 1.9 2.9 (1.1) 1.2
Deferred Revenue (2.4) (0.4) (2.0) 0.5
Income Taxes Payable (9.3) (1.4) (17.3) (2.8)
Accounts Payable and Accrued and Other Liabilities 4.5 12.0 3.5 8.3
Amounts Payable to Related Parties 2.5 (1.5) (1.6) (1.6)
Adjustments to Reconcile Net Income to Net Cash
Provided by operating activities:
Deferred Taxes 0.6 (2.3) (0.6) (5.3)
Non-cash Stock Compensation (0.4) - (0.4) -
Amortization of Deferred Financing Costs (0.1) (0.1) (0.7) (0.6)
Capital Expenditures (0.9) (1.1) (5.9) (4.4)
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Free Cash Flow $34.1 $32.9 $108.1 $107.2
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Fully Diluted Weighted Average Shares Outstanding 95,732 101,806 98,454 103,625
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Free Cash Flow per Fully Diluted Weighted
Average Shares Outstanding $.36 $.32 $1.10 $1.03
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WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2004 2003 2004 2003
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NET REVENUES $ 151,632 $ 146,076 $ 562,246 $ 539,226
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Operating Costs 92,215 88,752 369,634 350,582
Depreciation and Amortization 5,355 2,884 18,429 11,513
Corporate General and Administrative Expenses 2,954 2,080 8,606 7,106
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100,524 93,716 396,669 369,201
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OPERATING INCOME 51,108 52,360 165,577 170,025
Interest Expense 3,383 2,639 11,911 10,132
Other (Income) Expense (834) (8) (948) (52)
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INCOME BEFORE INCOME TAXES 48,559 49,729 154,614 159,945
INCOME TAXES 18,958 18,650 59,124 59,906
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NET INCOME $ 29,601 $ 31,079 $ 95,490 $ 100,039
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EARNINGS PER SHARE:
BASIC $ 0.31 $ 0.31 $ 0.98 $ 0.99
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DILUTED $ 0.31 $ 0.31 $ 0.97 $ 0.97
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WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC 95,063 99,563 97,117 101,243
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DILUTED 95,732 101,806 98,454 103,625
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WESTWOOD ONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, December 31,
2004 2003
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ASSETS
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CURRENT ASSETS:
Cash and cash equivalents $ 10,932 $ 8,665
Accounts receivable, net of allowance for doubtful accounts
of $2,566 (2004) and $4,334 (2003) 142,014 135,720
Prepaid and other assets 21,400 21,110
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Total Current Assets 174,346 165,495
PROPERTY AND EQUIPMENT, NET 47,397 50,562
GOODWILL 981,969 990,472
INTANGIBLE ASSETS, NET 6,176 7,626
OTHER ASSETS 36,391 47,879
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TOTAL ASSETS $ 1,246,279 $ 1,262,034
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LIABILITIES AND SHAREHOLDERS' EQUITY
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CURRENT LIABILITIES:
Accounts payable 13,135 13,136
Amounts payable to related parties 20,274 18,680
Deferred revenue 14,258 12,215
Income taxes payable 5,211 3,760
Accrued expenses and other liabilities 28,463 32,082
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Total Current Liabilities 81,341 79,873
LONG-TERM DEBT 359,439 300,366
DEFERRED INCOME TAXES 12,541 36,902
OTHER LIABILITIES 8,465 8,943
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TOTAL LIABILITIES 461,786 426,084
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COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock: authorized 10,000 shares, none outstanding - -
Common stock, $.01 par value: authorized, 254,832 shares;
issued and outstanding, 94,354 (2004) and 99,057 (2003) 944 991
Class B stock, $.01 par value: authorized, 3,000 shares:
issued and outstanding, 292 (2004) and 704 (2003) 3 7
Additional paid-in capital 369,036 517,132
Accumulated earnings 414,510 319,020
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784,493 837,150
Less treasury stock, at cost; 0 (2004) and 35 (2003) shares - (1,200)
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TOTAL SHAREHOLDERS' EQUITY 784,493 835,950
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,246,279 $ 1,262,034
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