Arbitron Inc. Reports Third Quarter 2001 Financial Results; 12.4% Year-over-Year Increase in Revenue For Third Quarter.

Business Editors

NEW YORK--(BUSINESS WIRE)--Oct. 18, 2001

Arbitron Inc. (NYSE: ARB) today announced results for the third quarter ended September 30, 2001.

The Company reported revenue of $65.6 million, an increase of 12.4% over revenue of $58.4 million during the third quarter of 2000. Earnings before interest and taxes (EBIT) for the quarter were $26.2 million, representing a 3.0% increase compared with EBIT of $25.4 million reported during the same period last year. Net income for the quarter was $12.9 million, compared with $15.4 million for the third quarter of 2000, a 16.4% decrease.

Net income per share for the quarter was $.44 (basic) and $.43 (diluted), compared with $.53 (basic ) and $.52 (diluted) net income per share during the comparable period last year. The 2000 earnings per share amounts have been adjusted to reflect the one-for-five reverse split, which became effective following Arbitron's reverse spin-off from Ceridian.

In the third quarter, revenue for the core business, exclusive of the recently acquired RADAR(R) radio network ratings service, grew by 9.3% over the same period last year. Revenue from RADAR contributed an additional 3.1% of growth in revenue for the third quarter. As expected, cost and expenses were higher than the third quarter of last year due to increased spending related to response rates, royalties, Webcast measurement, the Portable People Meter initiative and RADAR, along with $4.9 million of net interest expense related to debt incurred in connection with the spin-off from Ceridian on March 30, 2001.

For the nine months ended September 30, 2001, revenue was $176.1 million, an increase of 10.3% over the same period last year. Revenue for the core business excluding RADAR grew by 9.2%. EBIT was $66.3 million, compared to $63.0 during the same period last year. Net income for the nine months was $33.9 million or $1.15 share (diluted), compared with $38.1 million or $1.30 on a per share (diluted) basis last year. The Company reported EBITDA of $69.9 million, compared with $66.1 million during the first nine months of 2000, a 5.6% increase.

In announcing the results, Stephen Morris, president and chief executive officer of Arbitron said, "During the third quarter we made significant progress in reaching our financial goals for 2001. The 12.4% quarterly increase in revenue resulted from growth in our core business, as well as the recognition of revenue associated with our RADAR radio network ratings service, which we acquired in July, 2001. Looking ahead, we remain confident we will achieve our previously stated financial objectives for 2001."

Mr. Morris continued, "In terms of other important milestones, we reached multi-year, radio ratings license agreements with Clear Channel Radio and Citadel Communications. We began measuring radio audiences in Mexico City, utilizing our existing diary processing infrastructure. We delivered the first quarterly radio network audience report since our purchase of the RADAR radio network ratings service. We also released a second round of positive audience ratings results from the U.S. Market Trial of the Portable People Meter, our new television, cable and radio audience measurement system."

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 750 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 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:

-- realize the benefits we expect to achieve from our spin-off from Ceridian
Corporation;

-- 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;

-- benefit from further consolidation in the radio industry; and

-- keep up with rapidly changing technological needs of our customer base,
including creating new products and services that meet these needs.

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.

RADAR(R) is a registered trademark of Arbitron Inc.

Arbitron Inc.
Consolidated Statements of Income
Three Months Ended September 30, 2001 and 2000
(Dollars in thousands, except per share data)
(Unaudited)

                                Three Months Ended
                                 September 30,           $        %
                                  2001       2000    Variance Variance

Revenue                      $  65,633  $  58,395  $   7,238    12.4%
Costs and expenses
   Cost of revenue              19,668     16,219      3,449    21.3%
   Selling, general and
    administrative              12,460     11,214      1,246    11.1%
   Research and development      5,916      3,807      2,109    55.4%
     Total costs and expenses   38,044     31,240      6,804    21.8%

Operating income                27,589     27,155        434     1.6%

   Equity in net loss of
    affiliate                   (1,393)    (1,729)       336    19.4%

Earnings before interest and
 income taxes                   26,196     25,426        770     3.0%
   Interest income                 240        -          240   100.0%
   Interest expense             (5,188)       -       (5,188) (100.0%)

Earnings before income taxes    21,248     25,426     (4,178)  (16.4%)
   Income tax expense            8,392     10,043     (1,651)  (16.4%)

Net income                   $  12,856  $  15,383  $  (2,527)  (16.4%)

Net income per weighted
 average common share (1)
   Basic                     $    0.44  $    0.53  $   (0.09)  (17.0%)
   Diluted                   $    0.43  $    0.52  $   (0.09)  (17.3%)

Weighted average shares used
 in calculations (in
 thousands)
   Basic                        29,162     29,076
   Diluted                      29,583     29,506

Other data (2)

EBITDA                       $  27,546  $  26,510  $   1,036     3.9%

(1) The computations of basic and diluted net income per common share
for the three month period ended September 30, 2001 are based on
Arbitron's weighted average shares of common stock and potentially
dilutive securities outstanding, respectively. For the three month
period ended September 30, 2000, as well as periods ended prior to the
spin-off, the net income per weighted average common share
computations are pro forma computations based entirely, or in part,
upon Ceridian's weighted average number of shares of Ceridian common
stock and potentially dilutive securities outstanding. In November
2000, Ceridian's board of directors approved a one-for-five reverse
stock split, which was effective immediately after the spin-off.

Pro forma net income per common share and weighted average common
shares outstanding presented herein have been adjusted to reflect this
reverse stock split. The diluted weighted average common shares
amounts assume that all of Ceridian's historical dilutive securities
were converted into Arbitron securities.

(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 debt expense, as well as to
evaluate its operating cash flow. Interest expense and income tax
expense are added back to net income to arrive at EBIT. EBITDA is
calculated by adding back to EBIT depreciation and amortization on
property and equipment, amortization of goodwill and other intangible
assets and asset impairment charges. EBITDA should not be considered a
substitute either for net income, as an indicator of Arbitron's
operating performance, or for cash flows, 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
Nine Months Ended September 30, 2001 and 2000
(Dollars in thousands, except per share data)
(Unaudited)

                                Nine Months Ended
                                  September 30,          $       %
                                  2001      2000     Variance Variance

Revenue                      $  176,087 $  159,593 $   16,494   10.3%
Costs and expenses
   Cost of revenue               58,352     53,286      5,066    9.5%
   Selling, general and
    administrative               35,625     33,190      2,435    7.3%
   Research and development      16,250     10,430      5,820   55.8%
     Total costs and
      expenses                  110,227     96,906     13,321   13.7%

Operating income                 65,860     62,687      3,173    5.1%

   Equity in net income of
    affiliate                       426        273        153   56.0%

Earnings before interest
 and income taxes                66,286     62,960      3,326    5.3%
   Interest income                  613        -          613  100.0%
   Interest expense             (10,926)       -      (10,926)(100.0%)

Earnings before income
 taxes                           55,973     62,960     (6,987) (11.1%)
   Income tax expense            22,108     24,869     (2,761) (11.1%)

Net income                   $   33,865 $   38,091 $   (4,226) (11.1%)

Net income per weighted
 average common share (1)
   Basic                     $     1.16 $     1.31 $    (0.15) (11.5%)
   Diluted                   $     1.15 $     1.30 $    (0.15) (11.5%)

Weighted average shares
 used in calculations (in
 thousands)
   Basic                         29,158     29,015
   Diluted                       29,410     29,294


Other data (2)

EBITDA                       $   69,851 $   66,123 $    3,728     5.6%

(1) The computations of basic and diluted net income per common share
for the nine month period ended September 30, 2001 are based on
Arbitron's weighted average shares of common stock and potentially
dilutive securities outstanding, respectively. For the nine month
period ended September 30, 2000, as well as periods ended prior to the
spin-off, the net income per weighted average common share
computations are pro forma computations based entirely, or in part,
upon Ceridian's weighted average number of shares of Ceridian common
stock and potentially dilutive securities outstanding. In November
2000, Ceridian's board of directors approved a one-for-five reverse
stock split, which was effective immediately after the spin-off. Pro
forma net income per common share and weighted average common shares
outstanding presented herein have been adjusted to reflect this
reverse stock split. The diluted weighted average common shares
amounts assume that all of Ceridian's historical dilutive securities
were converted into Arbitron securities.

(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 debt expense, as well as to
evaluate its operating cash flow. Interest expense and income tax
expense are added back to net income to arrive at EBIT. EBITDA is
calculated by adding back to EBIT depreciation and amortization on
property and equipment, amortization of goodwill and other intangible
assets and asset impairment charges. EBITDA should not be considered a
substitute either for net income, as an indicator of Arbitron's
operating performance, or for cash flows, 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.
Condensed Balance Sheets
September 30, 2001 and December 31, 2000
(Dollars in thousands)
(Unaudited)

                                            September 30, December 31,
                                                    2001        2000
Assets:
Cash and equivalents                           $   18,600  $    3,540
Trade receivables                                  24,564      19,017
Deferred taxes                                     33,698      51,077
Other assets                                       55,604      34,242
   Total assets                                $  132,466  $  107,876

Liabilities and Stockholders' Equity
 (Deficit):
Deferred revenue                               $   41,966  $   47,833
Long-term debt                                    225,000           -
Other liabilities                                  33,369      26,821
Stockholders' equity (deficit) (3)               (167,869)     33,222
   Total liabilities and stockholders'
    equity (deficit)                           $  132,466  $  107,876


(3) 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.