Arbitron Inc. Reports 2002 Fourth Quarter and Year End Financial Results; Annual Revenue Up 9.8%; Net Income Up 17.3% Over 2001; Net Income Per Share Increases 14.5%.

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 23, 2002

Arbitron Inc. (NYSE: ARB) today announced results for the quarter and year ended December 31, 2002.

For the fourth quarter 2002, the Company reported revenue of $57.8 million, an increase of 12.3% over revenue of $51.4 million during the fourth quarter of 2001. Earnings before interest and taxes (EBIT) for the quarter were $14.1 million, compared with EBIT of $9.3 million during the comparable period last year. Net income for the quarter was $6.5 million, compared with $2.6 million for the fourth quarter of 2001.

Cost and expenses for the quarter increased by 4.0%, from $46.0 million in 2001 to $47.9 million in 2002. Interest expense declined $1.4 million from 2001 as a result of significant reductions in debt between the two periods.

Net income per share for the quarter increased to $0.21 (diluted), compared with $0.09 (diluted) during the comparable period last year. Effective January 1, 2002, the Company discontinued the amortization of goodwill in accordance with generally accepted accounting principles. Had the company been required to adopt this accounting treatment effective as of January 1, 2001, net income and net income per share (diluted) for the three months ended December 31, 2001 would have been $3.0 million and $0.10, respectively.

For the year ended December 31, 2002, revenue was $249.8 million, an increase of 9.8% over the $227.5 million reported for the same period last year. EBIT was $85.7 million, compared to $75.5 million in 2001, an increase of 13.5% for the year. Net income for the year was $42.8 million or $1.42 per share (diluted), compared with $36.5 million, or $1.24 per share (diluted), last year. Had the discontinuation of amortization of goodwill been in effect in 2001, net income and net income per share (diluted) for the year ended December 31, 2001 would have been $38.2 million and $1.29, respectively.

Commenting on the results for the fourth quarter, Stephen Morris, president and chief executive officer of Arbitron, said, "We ended 2002 by meeting our financial goals for revenue and profitability, a good performance in a difficult year for the media industry. Our basic ratings, Scarborough and software services all made good progress in the quarter."

"In the fourth quarter, our RADAR network radio measurement service expanded its roster of clients while staying on track in its transition to a more efficient and more effective sampling system," said Mr. Morris. "Our acquisition of a license to the Measurecast Webcast ratings technology, also in the fourth quarter, should allow us to maintain a leadership position in the webcast ratings arena while keeping a tighter grip on costs."

"Working with Nielsen Media Research, we continue to make progress on the refinements to the Portable People Meter (PPM) that the U.S. ratings marketplace requested. And on our own, we have made solid progress marketing the PPM in the international arena and have broadened our exploration of new applications for this promising technology," said Mr. Morris.

"Given our progress and the overall strength of the core ratings business, we believe Arbitron remains well positioned to deliver solid growth in revenue and profitability while making measured investments in markets with long-term growth potential," Mr. Morris concluded.

Arbitron will host a conference call at 10:00 a.m. EST on January 23rd to discuss its fourth quarter and year-end results as well as financial guidance for 2003. The Company invites you to listen to the call at the following telephone number: 1-800-683-1535. The call will also be available live on the Internet at the following sites: www.arbitron.com, www.ccbn.com and www.streetevents.com

About Arbitron

Arbitron Inc. (NYSE: ARB) is an international media and marketing research firm serving radio broadcasters, cable companies, advertisers, advertising agencies and outdoor advertising companies in the United States, Mexico and Europe. Arbitron's core businesses are measuring network and local market radio audiences across the United States; surveying the retail, media and product patterns of local market consumers; and providing application software used for analyzing media audience and marketing information data. Arbitron Webcast Services measures the audiences of audio and video content on the Internet, commonly known as webcasts. The Company is developing the Portable People Meter, a new technology for radio, TV and cable ratings.

Arbitron's marketing and business units are supported by a world-renowned research and technology organization located in Columbia, Maryland. Arbitron has approximately 800 full-time employees; its executive offices are located in New York City.

Through its Scarborough Research joint venture with VNU Media Measurement & Information, Arbitron also provides media and marketing research services to the broadcast television, magazine, newspaper, outdoor and online industries.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements regarding Arbitron in this release that are not historical in nature, particularly those that utilize terminology such as "may," "will," "should," "likely," "expects," "anticipates," "estimates," "believes" or "plans" or comparable terminology, are forward-looking statements based on current expectations about future events, which Arbitron has derived from the information currently available to it. These forward-looking statements involve known and unknown risks and uncertainties that may cause our results to be materially different from results implied in such forward-looking statements. These risks and uncertainties include whether we will be able to:

- renew contracts with large customers as they expire;

- successfully execute our business strategies, including timely implementation of our Portable People Meter and our webcast ratings services, as well as expansion of international operations;

- effectively manage the impact of further consolidation in the radio industry; -keep up with rapidly changing technological needs of our customer base, including creating new products and services that meet these needs, and;

- successfully manage the impact on our business of any economic downturn generally and in the advertising market in particular.

Additional important factors known to Arbitron that could cause forward-looking statements to turn out to be incorrect are identified and discussed from time to time in Arbitron's filings with the Securities and Exchange Commission, including in particular the risk factors discussed under the caption "ITEM 1. BUSINESS - Business Risks" in our Annual Report on Form 10-K, which discussion is incorporated herein by reference.

The forward-looking statements contained in this release speak only as of the date hereof, and Arbitron undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

                             Arbitron Inc.
                   Consolidated Statements of Income
             Three Months Ended December 31, 2002 and 2001
                 (In thousands, except per share data)
                              (Unaudited)

                                     Three
                                     Months Ended
                                     December 31,      $         %
                                   2002     2001    Variance  Variance
                                  -------  -------  --------  --------
Revenue                           $57,786  $51,447    $6,339    12.3%
Costs and expenses
Cost of revenue                    27,673   24,237     3,436    14.2%
Selling, general
 and administrative                13,939   13,928        11     0.1%
Research and development            6,289    7,881    (1,592)  (20.2%)
Total costs and expenses           47,901   46,046     1,855     4.0%

Operating income                    9,885    5,401     4,484    83.0%

Equity in net income of affiliate   4,229    3,859       370     9.6%

Earnings before
 interest and income taxes         14,114    9,260     4,854    52.4%
Interest income                       172      225       (53)  (23.6%)
Interest expense                    3,762    5,191    (1,429)  (27.5%)

Earnings before income taxes       10,524    4,294     6,230   145.1%
Income tax expense                  4,051    1,697     2,354   138.7%

Net income (1)                     $6,473   $2,597    $3,876   149.2%

Net income per weighted
 average common share
Basic                               $0.22    $0.09     $0.13   144.4%
Diluted                             $0.21    $0.09     $0.12   133.3%

Weighted average shares
 used in calculations
Basic                              29,570   29,182
Diluted                            30,180   29,701

Other data
Depreciation and Amortization      $1,203   $1,461     $(258)  (17.7%)
EBITDA (2)                        $15,317  $10,721    $4,596    42.9%


    (1) Effective January 1, 2002, the Company adopted the provisions
        of Statement of Financial Accounting Standards No. 142
        "Goodwill and Other Intangible Assets," which required the
        Company to discontinue the amortization of goodwill and rather
        test such assets for impairment on an annual basis. Had the
        Company been required to adopt the provisions of the
        pronouncement effective as of January 1, 2001, net income and
        diluted net income per share for the three months ended
        December 31, 2001 would have been $3,023 and $0.10,
        respectively. The Company did not have any goodwill impairment
        charges from the adoption of the new pronouncement during
        2002.
    (2) EBITDA is presented as supplemental information that
        management of Arbitron believes may be useful to some
        investors in evaluating Arbitron because it is widely used as
        a measure of evaluating a company's operating performance
        before interest expense, as well as to evaluate its operating
        cash flow. EBITDA is calculated by adding back net interest
        expense, income tax expense, depreciation and amortization to
        net income. EBITDA should not be considered a substitute
        either for net income, as an indicator of Arbitron's operating
        performance, or for cash flow, as a measure of Arbitron's
        liquidity. In addition, because EBITDA is not calculated
        identically by all companies, the presentation here may not be
        comparable to other similarly titled measures of other
        companies.

                             Arbitron Inc.
                   Consolidated Statements of Income
                 Year Ended December 31, 2002 and 2001
                 (In thousands, except per share data)


                                   Year Ended
                                   December 31,
                                  2002      2001       $         %
                               (Unaudited)(Audited) Variance  Variance
                                --------- --------  --------  --------

Revenue                          $249,757 $227,534   $22,223     9.8%
Costs and expenses
Cost of revenue                    91,821   82,589     9,232    11.2%
Selling, general
 and administrative                53,096   49,553     3,543     7.1%
Research and development           24,728   24,131       597     2.5%
Total costs and expenses          169,645  156,273    13,372     8.6%

Operating income                   80,112   71,261     8,851    12.4%

Equity in net income of affiliate   5,627    4,285     1,342    31.3%

Earnings before
 interest and income taxes         85,739   75,546    10,193    13.5%
Interest income                       596      838      (242)  (28.9%)
Interest expense                   16,815   16,117       698     4.3%

Earnings before income taxes       69,520   60,267     9,253    15.4%
Income tax expense                 26,765   23,805     2,960    12.4%

Net income (1)                    $42,755  $36,462    $6,293    17.3%

Net income per weighted
 average common share (3)
Basic                               $1.45    $1.25     $0.20    16.0%
Diluted                             $1.42    $1.24     $0.18    14.5%

Weighted average shares
 used in calculations
Basic                              29,413   29,164
Diluted                            30,049   29,483

Other data
Depreciation and Amortization      $4,369   $5,026     $(657)  (13.1%)
EBITDA (2)                        $90,108  $80,572    $9,536    11.8%

    (1) Effective January 1, 2002, the Company adopted the provisions
        of Statement of Financial Accounting Standards No. 142
        "Goodwill and Other Intangible Assets," which required the
        Company to discontinue the amortization of goodwill and rather
        test such assets for impairment on an annual basis. Had the
        Company been required to adopt the provisions of the
        pronouncement effective as of January 1, 2001, net income and
        diluted net income per share for the year ended December 31,
        2001 would have been $38,166 and $1.29, respectively. The
        Company did not have any goodwill impairment charges from the
        adoption of the new pronouncement during 2002.
    (2) EBITDA is presented as supplemental information that
        management of Arbitron believes may be useful to some
        investors in evaluating Arbitron because it is widely used as
        a measure of evaluating a company's operating performance
        before interest expense, as well as to evaluate its operating
        cash flow. EBITDA is calculated by adding back net interest
        expense, income tax expense, depreciation and amortization to
        net income. EBITDA should not be considered a substitute
        either for net income, as an indicator of Arbitron's operating
        performance, or for cash flow, as a measure of Arbitron's
        liquidity. In addition, because EBITDA is not calculated
        identically by all companies, the presentation here may not be
        comparable to other similarly titled measures of other
        companies.
    (3) For the year ended December 31, 2001, the computations of pro
        forma net income per weighted average common share are based
        upon Ceridian's weighted average common shares and potentially
        dilutive securities outstanding for the three months ended
        March 31, 2001, and Arbitron's weighted average common shares
        and potentially dilutive securities thereafter. The diluted
        weighted average common shares amounts for the three months
        ended March 31, 2001 assume that all of Ceridian's historical
        dilutive securities were converted into Arbitron securities.


                             Arbitron Inc.
                       Condensed Balance Sheets
                December 31, 2002 and December 31, 2001
                            (In thousands)

                                                 December 31,
                                           2002               2001
                                        (Unaudited)         (Audited)
                                         ---------          ---------
Assets:
Cash and cash equivalents                  $43,095           $21,043
Trade receivables                           20,509            19,393
Deferred taxes                              23,661            28,342
Goodwill, net                               32,937            28,937
Other assets                                30,140            29,126

Total assets                              $150,342          $126,841

Liabilities and
 Stockholders' Equity (Deficit):
Deferred revenue                           $54,746           $52,993
Long-term debt                             165,000           205,000
Other liabilities                           37,775            37,957
Stockholders' equity (deficit) (4)        (107,179)         (169,109)

Total liabilities and
 stockholders' equity (deficit)           $150,342          $126,841

(4) Prior to the spin-off from Ceridian Corporation, Arbitron

distributed its earnings to Ceridian. Those distributions,

together with a $250 million distribution made to Ceridian on

the date of the spin-off, gave rise to the stockholders'

deficit. Proceeds from the issuance of long-term debt were

used by Arbitron to make the $250 million distribution. During

the third quarter of 2002, the Company finalized the amount of

Federal income tax loss carryforwards available at the time of

the reverse spin-off. This resulted in a higher NOL tax

benefit to Arbitron of $10.7 million, which reduced cash taxes

payable and reduced stockholders' deficit. The Company is

currently compiling similar information with respect to state

net operating losses. Upon completion of the required

analysis, the Company will record such benefit, if any,

through an increase in deferred income taxes and a reduction

in stockholders' deficit. The benefit will not impact net

income.