UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

[ X ]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2004
                                       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                                       10019
             New York, NY                                         (Zip Code
(Address of principal executive offices)

       Registrant's telephone number, including area code: (212) 641-2000

           Securities Registered Pursuant to Section 12(b) of the Act:

       Title of each class             Name of each exchange on which registered
       -------------------             -----------------------------------------

Common Stock, par value $0.01 per share          New York Stock Exchange

        Securities registered pursuant to Section 12(g) of the Act: None

     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 if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes X No ___

     The aggregate  market value of Common Stock held by  non-affiliates  of the
registrant  was  approximately  $1.91 billion  based on the last reported  sales
price of the  registrant's  Common Stock on June 30, 2004 (the last business day
of the most  recently  completed  second  quarter) and  assuming  solely for the
purpose of this  calculation  that all directors and officers of the  registrant
are  "affiliates."  The  determination  of affiliate status is not necessarily a
conclusive determination for other purposes.

     As of March 1,  2005,  94,355,915  shares  (excluding  treasury  shares) of
Common Stock, par value $0.01 per share,  were outstanding and 291,796 shares of
Class B Stock, par value $0.01 per share, were outstanding.

                       Documents Incorporated By Reference

     Portions of the registrant's definitive proxy statement for its 2005 annual
meeting of shareholders (which will be filed with the Commission within 120 days
of the registrant's  2004 fiscal year end) are incorporated by reference in Part
III of this Form 10-K.


PART I

Item 1.  Business

In this report,  "Westwood One," "Company,"  "registrant,"  "we," "us" and "our"
refer to Westwood One, Inc.


General

Westwood One supplies radio and television  stations with  information  services
and  programming.  The Company is the  largest  domestic  outsource  provider of
traffic reporting services and the nation's largest radio network, producing and
distributing  national news, sports, talk, music and special event programs,  in
addition  to local  news,  sports,  weather,  video  news and other  information
programming.

The  Company  derives  substantially  all of its  revenues  from the sale of :10
second, :30 second and :60 second commercial airtime to advertisers. The Company
obtains the commercial airtime it sells to advertisers from radio and television
affiliates in exchange for the  programming or information  services it provides
to them.  In some  cases,  the Company  supplements  the  commercial  airtime it
receives from programming and information  services by providing affiliates with
compensation to obtain additional commercial airtime. That commercial airtime is
sold to local/regional advertisers (typically :10 second commercial airtime) and
to national  advertisers  (typically :30 or :60 second commercial  airtime).  By
purchasing  commercial  airtime from the Company,  advertisers  are able to have
their commercial  messages broadcast on radio and television stations throughout
the United States, reaching demographically defined listening audiences.

The Company provides local traffic and information  broadcast reports in over 95
of the top 100 Metro Survey Area markets  (referred to herein as "MSA  markets")
in the United States.  The Company also offers radio stations  traditional  news
services,  including  CBS Radio news and CNN Radio  news,  in  addition to seven
24-hour  satellite-delivered  continuous play music formats ("24/7 Formats") and
weekday and weekend news and entertainment features and programs. These programs
include:  major sporting events,  including the National Football League,  Notre
Dame  football and other college  football and  basketball  games,  the National
Hockey League,  the Masters and the Olympics,  live  personality  intensive talk
shows, live concert  broadcasts,  countdown shows, music and interview programs,
and exclusive satellite simulcasts with cable networks.

Westwood One is managed by Infinity  Broadcasting  Corporation  ("Infinity"),  a
wholly-owned  subsidiary  of Viacom  Inc.,  pursuant to a  management  agreement
between  the  Company  and  Infinity  which  expires  on  March  31,  2009  (the
"Agreement" or "Management Agreement").

Industry Background

    Radio Broadcasting

There are approximately 11,000 commercial radio stations in the United States.

A radio station  selects a style of  programming  ("format") to attract a target
listening  audience and thereby  attracts  advertisers  that are targeting  that
audience  demographic.  There are many  formats from which a station may select,
including  news,  talk,  sports  and  various  types of music and  entertainment
programming.

A radio station has two principal  ways of  effectively  competing for revenues.
First,  it can  differentiate  itself  in its  local  market  by  selecting  and
successfully  executing a format targeted at a particular audience thus enabling
advertisers  to place their  commercial  messages on stations aimed at audiences
with certain demographic  characteristics.  A station can also broadcast special
programming,  syndicated shows, sporting events or national news products,  such
as those supplied by Westwood One, not available to its  competitors  within its
format. National programming broadcast on an exclusive geographic basis can help
differentiate  a station  within its  market,  and  thereby  enable a station to
increase its audience and advertising revenue.

    Radio Advertising

Radio advertising time can be purchased on a local,  regional or national basis.
Local and  regional  purchases  allow an  advertiser  to select  specific  radio
stations in chosen geographic markets for the broadcast of commercial  messages.
Local and regional  purchases are typically best suited for an advertiser  whose
business or ad campaign is in a specific geographic area.  Advertising purchased


from a national  radio network  allows an  advertiser  to target its  commercial
messages to a specific  demographic  audience,  nationally,  on a cost-efficient
basis.  In addition,  an  advertiser  can choose to  emphasize  its message in a
certain market or markets by supplementing a national purchase with local and/or
regional purchases.

To plan its network  audience  delivery and  demographic  composition,  specific
measurement  information is available to  advertisers  from  independent  rating
services  such as Arbitron and their RADAR rating  service.  The rating  service
provides  demographic  information such as the age and gender composition of the
listening   audiences.   Consequently,   advertisers   can  verify   that  their
advertisements are being heard by their target listening audience.


Business Strategy/Services

The Company's business strategy is to provide for the programming needs of radio
stations by supplying to radio  stations  programs and services that  individual
stations may not be able to produce on their own on a cost effective  basis. The
Company  offers radio  stations  traffic and news  information as well as a wide
selection of regularly  scheduled and special event  syndicated  programming and
24/7 Formats. The information,  programs and formats are produced by the Company
and, therefore,  the stations typically have virtually no production costs. With
respect to the Company's programs and formats, each program or format is offered
for  broadcast  by the  Company  exclusively  to one  station in its  geographic
market,  which assists the station in competing for audience  share in its local
marketplace.  In addition, except for news programming,  Westwood One's programs
contain  available  commercial  airtime  that  the  stations  may  sell to local
advertisers. Westwood One typically distributes promotional announcements to the
stations  and  occasionally   places   advertisements   in  trade  and  consumer
publications to further promote the upcoming broadcast of its programs.

In 1996, the Company expanded its product  offerings to include  providing local
traffic,  news, sports and weather programming to radio stations and other media
outlets in selected  cities across the United  States.  This  expansion gave the
Company's  advertisers the ability to easily supplement their national purchases
with local and regional purchases from the Company.  It also allowed the Company
to develop relationships with local and regional advertisers.  In 1996 and 1998,
the Company  acquired the  operating  assets of Shadow  Traffic in a total of 14
major  metropolitan  markets (4 in 1996 and 10 in 1998).  In 1999,  Westwood One
significantly  expanded its local and regional reach through its merger with the
country's  largest  traffic  service  provider,   Metro  Networks,  Inc.,  which
broadcast  information reports in 67 of the 75 largest MSA markets in the United
States.  Since then,  the Company has  expanded its reach to more than 95 of the
top 100 MSA  markets.  In late 2000,  the Company  continued  its  expansion  of
products with its  acquisition  of the operating  assets of SmartRoute  Systems,
Inc.  ("SmartRoute"),  a company which  collects,  organizes  and  distributes a
database of advanced traveller  information through various electronic media and
telecommunications.

Westwood One enters into  affiliation  arrangements  with radio  stations  which
require  the  affiliate  to  provide  the  Company  with a  specific  number  of
commercial  positions  which it  aggregates  by similar day and time periods and
resells to its advertisers.  Some affiliation  agreements also require a station
to  broadcast  the  Company's  programs  and to use a portion  of the  program's
commercial  slots to air  national  advertisements  and any related  promotional
spots. With respect to 24/7 Formats, the Company typically receives a portion of
the commercial  airtime and a cash fee from the affiliated  stations in exchange
for the stations receiving the right to broadcast the formats.

Affiliation arrangements specify the number of times and the approximate daypart
each program and advertisement may be broadcast. Westwood One requires that each
station   complete   and   promptly   return  to  the   Company   an   affidavit
(proof-of-performance)  that  verifies the time of each  broadcast.  Affiliation
agreements generally run for a period of at least one year and are automatically
renewable for subsequent  periods.  The Company has  agreements  with over 5,000
radio stations, many of which have more than one arrangement.

The Company  has  personnel  responsible  for station  sales and  marketing  its
programs to radio stations.  The Company's  staff develops and maintains  close,
professional  relationships  with radio  station  personnel to provide them with
quick programming assistance.

    Local Traffic and Information Programming

The Company,  through its Traffic and  Information  Division,  provides  traffic
reports and local news, weather and sports information  programming to radio and
television affiliates.

The  Company   gathers   traffic  and  other  data   utilizing   the   Company's
information-gathering  infrastructure,  which includes aircraft (helicopters and

                                      -2-


airplanes),  broadcast-quality remote camera systems positioned at strategically
located fixed positions and on aircraft,  mobile units and wireless systems, and
by accessing various government-based traffic tracking systems. The Company also
gathers information from various third-party news and information services.  The
information  is processed,  converted  into  broadcast copy and entered into the
Company's  computer  systems by the Company's local writers and producers.  This
permits  the  Company to easily  resell the  information  to third  parties  for
distribution  through  the  internet,   wireless  devices  or  personal  digital
assistants  ("PDAs") and various  other  distribution  channels.  The  Company's
professional  announcers  read the customized  reports on the air. The Company's
information reports (including the length of report, content of report, specific
geographic  coverage area,  time of broadcast,  number of reports aired per day,
broadcaster's  style,  etc.) are customized to meet each individual  affiliate's
requirements.  The Company  typically works closely with the program  directors,
news  directors  and  general  managers  of its  affiliates  to ensure  that the
Company's services meet its affiliates' goals and standards. The Company and its
affiliates  jointly select the on-air talent to ensure that each on-air talent's
style is appropriate for the station's format. The Company's on-air talent often
become integral  "personalities" on such affiliate stations as a result of their
significant on-air presence and interaction with the stations' on-air personnel.
In order to realize operating efficiencies, the Company endeavors to utilize its
professional  on-air talent on multiple  affiliate  stations within a particular
market.

The  Company   believes  that  its   extensive   fleet  of  aircraft  and  other
information-gathering  technology  and  broadcast  equipment  have  allowed  the
Company to provide  high quality  programming,  enabling it to retain and expand
its affiliate base. In the aggregate,  the Company utilizes  approximately:  125
helicopters  and  fixed-wing  aircraft;  39 mobile  units;  32  airborne  camera
systems;  125 fixed-position  camera systems;  70 broadcast  studios;  and 1,400
broadcasters  and  producers.  The  Company  also  maintains a staff of computer
programmers and graphics experts to supply customized  graphics and other visual
programming  elements  to  television  station  affiliates.   In  addition,  the
Company's  operations centers and broadcast studios have sophisticated  computer
technology,  video and broadcast equipment and cellular and wireless technology,
which enables the Company's  on-air talent to deliver reports to its affiliates.
The infrastructure  and resources  dedicated to a specific market by the Company
are  determined by the size of the market,  the number of affiliates the Company
serves in the market and the type of services being provided.

The Company generally does not require its affiliates to identify the Company as
the supplier of its information reports.  This provides the Company's affiliates
with a high degree of customization  and flexibility,  as each affiliate has the
right to present  the  information  reports  provided  by the  Company as if the
affiliate had generated the reports with its own resources.

As a result of its  extensive  network of  operations  and  talent,  the Company
regularly   reports  breaking  and  important  news  stories  and  provides  its
affiliates with live coverage of these stories. The Company is able to customize
and personalize its reports of breaking stories using its individual affiliates'
call letters from the scene of news events.  Past examples have included,  among
others, providing live airborne coverage of the September 11 terrorist attack on
the  World  Trade  Center  and  the  Seattle  earthquake.   By  using  our  news
helicopters,  the Company feeds live video to television  affiliates  around the
country. Moreover, by leveraging our infrastructure,  the same reporters provide
live  customized  airborne  reports for the Company's  radio  affiliates via the
Company's Metro Source service,  which is described  below. The Company believes
that it is the only  radio  network  news  organization  that has  local  studio
operations  that  cover in  excess  of 95  markets  and that is able to  provide
customized reports to these markets.

Metro Source, an information service available to subscribing affiliates,  is an
information  system and digital audio workstation that allows the Company's news
affiliates to receive via satellite and view,  write, edit and report the latest
news,  features and show preparation  material.  With this product,  the Company
provides continuously updated and breaking news, weather,  sports,  business and
entertainment information to its affiliate stations which have subscribed to the
service.  Information  and content for Metro Source is primarily  generated from
the Company's staff of news bureau chiefs, state correspondents and professional
news writers and reporters.

Local,  regional  and  national  news  and  information  stories  are fed to the
Company's  national  news  operations  center  in  Phoenix,  Arizona  where  the
information is verified,  edited, produced and disseminated via satellite to the
Company's internal Metro Source  workstations  located in each of its operations
centers and to  workstations  located at affiliate  radio  stations  nationwide.
Metro Source includes  proprietary  software that allows for customizing reports
and  editing in both audio and text  formats.  The  benefit to  stations is that
Metro  Source  allows them to  substantially  reduce time and cost from the news
gathering and editing  process at the station  level,  while  providing  greater
volume and quality news and information coverage from a single source.

                                      -3-

    Television Programming Services

The Company supplies  Television Traffic Services  ("MetroTV  Services") to over
200 television  stations.  Similar to its radio programming  services,  with its
MetroTV Services the Company supplies  customized  information reports which are
generally   delivered  on  air  by  its  reporters  to  its  television  station
affiliates.  In addition,  the Company  supplies  customized  graphics and other
visual programming elements to its television station affiliates.

The  Company  utilizes  live  studio  cameras  in order to  enable  its  traffic
reporters to provide its Video News  Services on  television  from the Company's
local  broadcast  studios.  In  addition,  the Company  provides  its Video News
Services from its aircraft and  fixed-position  based camera systems.  The Video
News  Services  include:  (i) live video  coverage  from  strategically  located
fixed-position  camera  systems;  (ii) live video news feeds from the  Company's
aircraft;  and  (iii)  full-service,  24 hours  per  day/7  days per week  video
coverage  from  the  Company's  camera  crews  using  broadcast  quality  camera
equipment and news vehicles.

    SmartRoute Systems

In 2000 the Company  acquired the operating  assets of SmartRoute  ("SRS") which
develops  non-broadcast traffic information.  SRS develops innovative techniques
for  gathering  local  traffic and  transportation  information,  as well as new
methods of distributing  such  information to the public.  The Company  believes
that in order to remain  competitive  and to continue to provide an  information
product of the highest quality to its  affiliates,  it is necessary to invest in
and participate in the  development of new technology.  The Company is currently
working with several  public and private  entities  across the United  States to
improve  dissemination of traffic and transportation  information.  SRS revenues
are not presently a significant source of revenues to the Company.

The Company, through SmartRoute,  collects, organizes and distributes a database
of advanced  traveler  information  to  automobiles,  homes and offices  through
various  electronic  media and  telecommunications.  The  Company  delivers  its
information under the SRS brand name. In addition,  the Company has participated
in a number  of  Federal  and State  funded  Intelligent  Transportation  System
projects, including various operational, 511 Interactive Voice Response ("IVR"),
advanced web sites,  and  combined  advanced  traveler  and transit  information
systems for Massachusetts,  Florida, North Carolina,  Virginia, Missouri and New
Jersey  Departments  of  Transportation.  SRS also operates  Traffic  Management
Centers for Jacksonville,  Florida;  Massachusetts;  South East Florida; and New
Jersey Departments of Transportation.

The  Company  has been  working  with a variety of private  companies  to deploy
commercial   products  and  services  involving  traveler   information.   These
relationships  allow for the provision of information  on a  personalized  basis
through  numerous  delivery  mechanisms,  including  the  internet,  paging,  FM
subcarrier,  traditional  cellular and  newly-developed  and  evolving  wireless
systems.  Information  can be  delivered  to a wide array of  devices  including
pagers, computers, and in-vehicle navigation and information systems.


    National Radio Programming

The Company  produces and  distributes  24/7  Formats,  regularly  scheduled and
special  syndicated  programs,  including  exclusive  live  concerts,  music and
interview  shows,  national music  countdowns,  lifestyle short  features,  news
broadcasts, talk programs, sporting events, and sports features.

The Company  controls most aspects of the  production  of its programs,  thereby
being able to tailor its programs to respond to current and  changing  listening
preferences.  The  Company  produces  regularly  scheduled  short-form  programs
(typically five minutes or less),  long-form  programs  (typically 60 minutes or
longer) and 24/7 Formats. Typically, the short-form programs are produced at the
Company's in-house facilities located in Culver City, California,  and New York,
New York.  The  long-form  programs  include  shows  produced  primarily  at the
Company's  in-house  production   facilities  and  recordings  of  live  concert
performances  and sports events made on location.  The 24/7 Formats are produced
at the Company's facilities in Valencia, California.

Westwood One also produces and distributes special event syndicated programs. In
2004, the Company  produced and  distributed  numerous  special event  programs,
including  exclusive  radio  broadcasts  of The Grammy  Awards,  the  Academy of
Country Music Awards, MTV Music Awards and the BET Awards, among others.

Westwood One obtains most of the programming for its concert series by recording
live concert  performances of prominent  recording artists.  The agreements with
these  artists  often  provide the  exclusive  right to  broadcast  the concerts

                                      -4-

worldwide over the radio (whether live or  pre-recorded)  for a specified period
of time. The Company may also obtain  interviews  with the recording  artist and
retain a copy of the  recording of the concert and the  interview for use in its
radio  programs and as additions to its extensive  tape library.  The agreements
provide the artist with  master  recordings  of their  concerts  and  nationwide
exposure on affiliated radio stations. In certain cases, the artists may receive
compensation.

Westwood  One's  syndicated  programs  are  primarily  produced at its  in-house
production facilities. The Company determines the content and style of a program
based on the target audience it wishes to reach. The Company assigns a producer,
writer,  narrator or host, interviewer and other personnel to record and produce
the  programs.  Because  Westwood One controls the  production  process,  it can
refine the programs' content to respond to the needs of its affiliated  stations
and national advertisers.  In addition, the Company can alter program content in
response to current and anticipated audience demand.

The Company produces and distributes  seven 24/7 Formats  providing music,  news
and talk programming for Country,  Hot Country,  Adult Contemporary,  Soft Adult
Contemporary,  Oldies,  Adult  Standards,  and the Adult Rock and Roll  formats.
Using its production  facilities in Valencia,  California,  the Company provides
all  the  programming  for  stations  affiliated  with  each of  these  formats.
Affiliates  compensate  the Company for these  formats by providing  the Company
with a portion of their commercial air time and, in most cases, cash fees.

The Company  believes  that its tape library is a valuable  asset for its future
programming and revenue generating capabilities. The library contains previously
broadcast programs, live concert performances,  interviews, daily news programs,
sports and  entertainment  features,  Capitol Hill  hearings  and other  special
events.  New programs can be created and  developed at a low cost by  excerpting
material from the library.

    Advertising Sales and Marketing

The Company packages its radio commercial  airtime on a network basis,  covering
all affiliates in relevant  markets,  either locally,  regionally or nationally.
This  packaged  airtime  typically  appeals  to  advertisers   seeking  a  broad
demographic reach. Because the Company generally sells its commercial airtime on
a network basis rather than station-by-station, the Company does not compete for
advertising  dollars  with its  local  radio  station  affiliates.  The  Company
believes that this is a key factor in maintaining  its affiliate  relationships.
The Company packages its television  commercial airtime on a local, regional and
national network basis. The Company has developed a separate sales force to sell
its television  commercial  airtime and to optimize the efforts of the Company's
national internal structure of sales representatives.  The Company's advertising
sales force is comprised of approximately  260 sales  representatives  and sales
managers.

In most of the markets in which the Traffic and  Information  Division  conducts
operations,  the Company  maintains an  advertising  sales office as part of its
operations  center.  The  Company's  advertising  sales  force  is  able to sell
available commercial airtime in any and all of the Company's markets in addition
to selling such airtime in each local market, which the Company believes affords
its sales  representatives  an advantage  over certain of its  competitors.  For
example, an airline advertiser can purchase sponsorship  advertising packages in
multiple  markets from the Company's local sales  representative  in the city in
which the airline is headquartered.

The  Company's   typical  radio   advertisement   for  traffic  and  information
programming  consists of an opening  announcement  and a  ten-second  commercial
message  presented  immediately  prior to,  in the  middle  of,  or  immediately
following  a regularly  scheduled  information  report.  Because the Company has
numerous   radio  station   affiliates   in  each  of  its  markets   (averaging
approximately  25  affiliates  per market in our top 50  markets),  the  Company
believes that its traffic and  information  broadcasts  reach more people,  more
often,  in a  higher  impact  manner  than  can  be  achieved  using  any  other
advertising  medium.  The Company combines its commercial  airtime into multiple
"sponsorship" packages which it then sells as an information sponsorship package
to advertisers  throughout its networks on a local,  regional or national basis,
primarily during morning and afternoon drive periods. The Company generally does
not allow an advertiser to select individual stations from its networks on which
to run its advertising campaign.

The Company believes that the positioning of  advertisements  within or adjacent
to its  information  reports  appeals to  advertisers  because the  advertisers'
messages are broadcast along with regularly  scheduled  programming  during peak
morning  and  afternoon  drive  times when a majority  of the radio  audience is
listening.  Radio advertisements broadcast during these times typically generate
premium rates.  Moreover,  surveys  commissioned by the Company demonstrate that
because the Company's  customized  information  reports are related to topics of
significant  interest  to  listeners,  listeners  often  seek out the  Company's
information reports.  Since advertisers'  messages are embedded in the Company's

                                      -5-


information reports, such messages have a high degree of impact on listeners and
generally will not be "pre-empted"  (i.e., moved by the radio station to another
time slot). Most of the Company's  advertisements are read live by the Company's
on-air talent,  providing the Company's advertisers with the added benefit of an
implied endorsement for their product.

Westwood  One's  Network   Division   provides   national   advertisers  with  a
cost-effective  way to communicate their commercial  messages to large listening
audiences  nationwide  through  purchases of commercial  airtime in its national
radio networks and programs.  An advertiser can obtain both frequency (number of
exposures  to the target  audience)  and reach (size of  listening  audience) by
purchasing  advertising time from the Company. By purchasing time in networks or
programs directed to different formats,  advertisers can be assured of obtaining
high market  penetration  and  visibility as their  commercial  messages will be
broadcast on several  stations in the same market at the same time. The Company,
on occasion,  supports its national sponsors with promotional  announcements and
advertisements  in trade and consumer  publications.  This support  promotes the
upcoming  broadcasts  of  Company  programs  and is  designed  to  increase  the
advertisers' target listening audience.

Generally,  the Company provides its MetroTV Services to television  stations in
exchange for  thirty-second  commercial  airtime  that the Company  packages and
sells on a national  basis.  The amount and placement of the commercial  airtime
that the Company receives from television stations varies by market and the type
of service  provided  by the  Company.  As the  Company  has  provided  enhanced
television video services,  it has been able to acquire more valuable commercial
airtime.  The Company believes that it offers advertisers  significant  benefits
because, unlike traditional television networks, the Company often delivers more
than one station in major markets and advertisers may select specific markets.

The  Company has  established  a morning TV news  network  for its  advertisers'
commercials to air during local news programming and local news breaks from 5:30
a.m. to 9:00 a.m.  Because the Company has  affiliated a large number of network
television  stations in major  markets,  its  morning  news  network  delivers a
significant  national household rating in an efficient and compelling local news
environment.  As the Company continues to expand its service offerings for local
television  affiliates,  it plans to create additional news networks to leverage
its television news gathering infrastructure.

Competition

In the MSA markets in which it operates,  the Company  competes for  advertising
revenue  with local  print and other  forms of  communications  media  including
magazines,   outdoor   advertising,   network   radio  and  network   television
advertising,  transit  advertising,  direct  response  advertising,  yellow page
directories,  internet/new  media and  point-of-sale  advertising.  Although the
Company is  significantly  larger than the next largest  provider of traffic and
local information services,  there are several multi-market operations providing
local radio and television programming services in various markets. In addition,
the  consolidation  of the radio  industry has created  opportunities  for large
radio groups,  such as Clear Channel  Communications,  to gather  information on
their own.

In marketing its programs to national advertisers, the Company directly competes
with  other  radio  networks  as  well  as with  independent  radio  syndication
producers and distributors.  More recently,  as a result of consolidation in the
radio industry,  companies  owning large groups of stations have begun to create
competing  networks  that have resulted in  additional  competition  for network
radio  advertising   expenditures.   In  addition,   the  Company  competes  for
advertising revenue with network television,  cable television,  print and other
forms of  communications  media.  The Company  believes  that the quality of its
programming  and the strength of its station  relations  and  advertising  sales
forces enable it to compete effectively with other forms of communication media.
Westwood One markets its programs to radio  stations,  including  affiliates  of
other radio networks,  that it believes will have the largest and most desirable
listening  audience for each of its  programs.  The Company  often has different
programs  airing on a number of  stations in the same  geographic  market at the
same time. The Company  believes that in comparison  with any other  independent
radio  syndication  producer  and  distributor  or radio  network  it has a more
diversified  selection of programming from which national  advertisers and radio
stations may choose.  In addition,  the Company  both  produces and  distributes
programs,  thereby  enabling it to respond  more  effectively  to the demands of
advertisers and radio stations.

The increase in the number of program  formats has led to increased  competition
among local radio stations for audience.  As stations  attempt to  differentiate
themselves in an increasingly competitive environment,  their demand for quality
programming  available from outside programming  sources increases.  This demand
has been  intensified  by high  operating  and  production  costs at local radio
stations and increased competition for local advertising revenue.

                                      -6-


Government Regulation

Radio   broadcasting  and  station   ownership  are  regulated  by  the  Federal
Communications   Commission  (the  "FCC").  Westwood  One,  as  a  producer  and
distributor of radio programs and information services, is generally not subject
to  regulation  by the FCC. The Traffic and  Information  Division  utilizes FCC
regulated two-way radio frequencies pursuant to licenses issued by the FCC.


Employees

On February 1, 2005, Westwood One had approximately  2,547 employees,  including
an  advertising  sales  force of  approximately  260  people  and 846  part-time
employees.  In addition,  the Company maintains  continuing  relationships  with
numerous independent writers,  program hosts, technical personnel and producers.
Approximately  689  of  the  Company's   employees  are  covered  by  collective
bargaining  agreements.  The  Company  believes  relations  with its  employees,
unions, and independent contractors are satisfactory.


Available Information

The Company is a Delaware corporation, having re-incorporated in Delaware on
June 21, 1985. Our current and periodic reports filed with the Securities and
Exchange Commission ("SEC"), including amendments to those reports, may be
obtained through our internet website at www.westwoodone.com free of charge as
soon as reasonably practicable after we file these reports with the SEC.


Item 2. Properties

The Company owns a 7,300 square-foot building in Culver City, California,  which
houses the syndicated  program  production  facilities and a 14,000  square-foot
building in Culver City, California,  which contains  administrative,  and sales
and marketing,  as well as its two traffic and news reporting  divisions,  Metro
Networks  and  Shadow  Broadcast  Services.   The  Company  also  owns  a  7,900
square-foot  building  adjacent to its  administrative  and sales and  marketing
offices in Culver City, California, which it subleases. In addition, the Company
leases  operation  centers/broadcast  studios and marketing  and  administrative
offices  across the United States  consisting of over 365,000 square feet in the
aggregate, pursuant to the terms of various lease agreements.

The Company  believes that its  facilities are adequate for its current level of
operations.


Item 3. Legal Proceedings

None.


Item 4. Submission of Matters to a Vote of Security Holders

None.

                                      -7-

                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

On March 1, 2005 there were approximately 211 holders of record of the Company's
Common  Stock,  several  of which  represent  "street  accounts"  of  securities
brokers.  Based upon the number of proxies  requested by brokers in  conjunction
with its 2004 shareholders' meeting, the Company estimates that the total number
of beneficial holders of the Company's Common Stock exceeds 5,000.

Since December 15, 1998,  the Company's  Common Stock has been traded on the New
York Stock Exchange  ("NYSE") under the symbol "WON".  The following  table sets
forth the  range of high and low last  sales  prices on the NYSE for the  Common
Stock for the calendar quarters indicated.

      2004                                 High             Low
      ----                                 ----             ---
      First Quarter                       $34.66           $27.82
      Second Quarter                       32.40            22.76
      Third  Quarter                       24.36            19.21
      Fourth Quarter                       26.95            20.12

      2003
      ----
      First Quarter                       $39.15            $29.60
      Second Quarter                       35.56             31.05
      Third Quarter                        33.73             29.30
      Fourth Quarter                       34.40             29.60

The last sales price for the Company's Common Stock on the NYSE on March 1, 2005
was $22.00.

The Company does not intend to pay cash dividends.  No cash dividend was paid on
the  Company's  stock  during  2004 or 2003,  and the  payment of  dividends  is
restricted  by the  terms of its loan  agreements,  to the  extent  that  such a
payment would cause an event of default.

There is no established  public  trading market for our Class B Stock.  However,
the Class B Stock is convertible to Common Stock on a share-for-share  basis. On
March 1, 2005 there were 3 holders of record of the Company's Class B Stock.

                      Equity Compensation Plan Information

The following table contains information regarding equity compensation plans and
warrants  issued to Infinity under the  Management  Agreement as of December 31,
2004:


                                                                                    

                            Number of securities to be
                             issued upon exercise of       Weighted average exercise       Number of securities
                               outstanding options,          price of outstanding        remaining available for
   Plan Category               warrants and rights       options, warrants and rights        future issuance
   -------------               -------------------       ----------------------------        ---------------

Equity compensation plans
approved by security holders
   Options (1)                       7,996,018                      $24.90                       600,345
   Warrants (2)                      4,500,000                       49.44                         N/A

Equity compensation plans not
approved by security holders            -                              -                            -
                                    ----------                                                   -------
Total                               12,496,018                                                   600,345
                                    ==========                                                   =======


(1)  Options  included herein were granted or are available for grant as part of
     the  Company's  1989 and/or 1999 stock option  plans that were  approved by
     shareholders of the Company.  The Company's 1999 stock option plan provides
     for  mandatory  grants of  options to  members  of the  Company's  Board of
     Directors on an annual basis.  The  Compensation  Committee of the Board of
     Directors  approves periodic option grants to Executive  Officers and other
     employees based on their contributions to the operations of the Company.

                                      -8-



(2)  Warrants  included herein were granted to Infinity in conjunction  with the
     Infinity  Management  Agreement,  and were approved by  shareholders of the
     Company on May 29,  2002.  Of the seven  warrants  issued,  two warrants to
     purchase an  aggregate  of  2,000,000  shares of Common  Stock each have an
     exercise price of $43.11 and $48.36,  respectively,  and become exercisable
     only if the average price of the Company's  Common Stock reaches a price of
     $64.67  and  $77.38,  respectively,  for at least 20 out of 30  consecutive
     trading days for any period  throughout  the ten year term of the warrants.
     Of the remaining five warrants to purchase an aggregate of 2,500,000 shares
     of Common Stock,  the exercise price for each of the five warrants is equal
     to $38.87,  $44.70,  $51.40,  $59.11,  and $67.98,  respectively.  The five
     warrants  have a term of 10 years  (only if they  become  exercisable)  and
     become  exercisable  on  January  2,  2005,  2006,  2007,  2008,  and 2009,
     respectively. However, in order for the warrants to become exercisable, the
     average price of the Company's Common Stock for each of the 15 trading days
     prior to January 2 of such year (commencing on January 2, 2005 with respect
     to the first 500,000 warrant tranche and each January 2 thereafter for each
     of the remaining four warrants) must be at least equal to both the exercise
     price  of the  warrant  and  120% of the  corresponding  prior  year 15 day
     trading average. In the case of the $38.87 warrants,  the Company's average
     stock price for the 15 trading  days prior to January 2, 2005 must equal or
     exceed  $40.56 for the warrants to become  exercisable.  The average  stock
     price for the 15  trading  days  prior to  January 2, 2005 did not equal or
     exceed $40.56, and therefore, the warrants did not become exercisable.

                      Issuer Purchases of Equity Securities


                                                                                

                                                                                          Approximate Dollar
                                                                    Total Number        Value of Shares that
                                                                 Shares Purchased as    May Yet Be Purchased
                                                                   Part of Publicly      Under the Plans ors    
                    Number of Shares       Average Price Paid     Announced Plans or            Programs              
Period             Purchased in Period           Per Share            Programs                     (A)
------             -------------------           ---------            --------                  --------
October 2004             475,000                  $20.93             11,191,224              $186,460,000
November 2004            860,000                   22.84             12,051,224               166,819,000
December 2004            185,000                   25.31             12,236,224               162,138,000
                         -------                                                              
                       1,520,000                  $22.54
                       =========


(A)  Represents  remaining   authorization  from  the  $250  million  repurchase
     authorization  approved  on  September  25,  2002 and the  additional  $250
     million  repurchase  authorization  approved  by  the  Company's  Board  of
     Directors on February 24, 2004.

Item 6.  Selected Financial Data
        (In thousands except per share data)


                                                                                                    

                                                      2004 (1)      2003 (1)     2002 (1)       2001           2000
                                                      ----          ----         ----           ----           ----
OPERATING RESULTS FOR YEAR ENDED DECEMBER 31:

Net Revenues                                          $562,246      $539,226     $550,751       $515,940       $553,693
Operating and Corporate Costs, Excluding
  Depreciation and Amortization                        378,240       357,688      360,390        349,936        388,095

Depreciation and Amortization                           18,429        11,513       11,464         67,611         62,104

Operating Income                                       165,577       170,025      178,897         98,393        103,494

Net Income                                             $95,490      $100,039     $109,115        $43,195        $42,283

Income Per Basic Share                                    $.98          $.99       $ 1.03           $.40           $.38
Income Per Diluted Share                                  $.97          $.97       $ 1.00           $.38           $.36

BALANCE SHEET DATA AT DECEMBER 31:
Current Assets                                        $174,346      $165,495     $153,628       $140,527      $ 153,881
Working Capital                                         93,005        81,433       63,542         35,012         15,679
Total Assets                                         1,246,279     1,262,034    1,266,312      1,210,017      1,285,556
Long-Term Debt                                         359,439       300,366      232,135        152,000        168,000
Total Shareholders' Equity                             784,493       835,950      903,040        915,371        949,892



                                      -9-


(1)  Results for the years ended  December 31, 2004,  2003, and 2002 include the
     effects of adopting  Statement of Financial  Accounting  Standards  No. 142
     "Goodwill  and  Other   Intangible   Assets"   ("SFAS  142").   Retroactive
     application prior to January 1, 2002 was prohibited.
--   No cash dividend was paid on the Company's  Common Stock during the periods
     presented above.

                                      -10-



Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations
        (In thousands except for share and  per share amounts)

                               EXECUTIVE OVERVIEW

Westwood One supplies  radio and television  stations with content,  information
services,  and  programming.  The  Company  is the  largest  domestic  outsource
provider of traffic  reporting  services and the nation's largest radio network,
producing and distributing  national news, sports, talk, music and special event
programs,  in  addition  to local news,  sports,  weather,  video news and other
information programming.  The commercial airtime that we sell to our advertisers
is  acquired  from  radio  and   television   affiliates  in  exchange  for  our
programming,   content,   information,   and  in  certain  circumstances,   cash
compensation.

The  radio  broadcasting  industry  has  experienced  a  significant  amount  of
consolidation in recent years. As a result,  certain major radio station groups,
including  Infinity and Clear Channel  Communications,  have emerged as powerful
forces in the industry.  Westwood One is managed by Infinity  under a Management
Agreement,  which  expires  on March  31,  2009.  While  Westwood  One  provides
programming  to all major radio  station  groups,  the  Company has  affiliation
agreements with most of Infinity's  owned and operated radio stations,  which in
the  aggregate,  provide the Company with a significant  portion of the audience
that it sells to advertisers.  Accordingly,  the Company's operating performance
could be materially adversely impacted by its inability to continue to renew its
affiliate agreements with Infinity stations.

The  Company  derives  substantially  all of its  revenues  from the sale of :10
second,  :30 second  and :60  second  commercial  airtime  to  advertisers.  Our
advertisers  who  target  local/regional   audiences  generally  find  the  most
effective  method is to purchase  shorter  duration  :10 second  advertisements,
which are principally  correlated to traffic and information related programming
and content.  Our advertisers who target national  audiences  generally find the
most  cost   effective   method  is  to  purchase   longer  :30  or  :60  second
advertisements, which are principally correlated to news, talk, sports and music
and  entertainment   related  programming  and  content.  A  growing  number  of
advertisers  purchase both local/regional and national airtime.  Generally,  the
greater  amount of  programming  we provide our affiliates the greater amount of
commercial airtime becomes available for the Company to sell. Additionally, over
an extended period of time an increase in the listening  audience results in our
ability to generate  more  revenues.  Our goal is to  maximize  the yield of our
available commercial airtime to optimize revenues.

In managing our  business,  we develop  programming  and exploit the  commercial
airtime by concurrently taking into consideration the demands of our advertisers
on both a market  specific  and  national  basis,  the demands of the owners and
management of our radio station  affiliates,  and the demands of our programming
partners  and  talent.  Our  continued  success  and  prospects  for  growth are
dependent  upon our  ability  to manage  the  aforementioned  factors  in a cost
effective  manner.  Our  results  may  also  be  impacted  by  overall  economic
conditions,  trends in demand for radio related  advertising,  competition,  and
risks  inherent in our  customer  base,  including  customer  attrition  and our
ability to generate new business opportunities to offset any attrition.

There are a variety  of factors  that  influence  the  Company's  revenues  on a
periodic  basis  including but not limited to: (i) economic  conditions  and the
relative  strength or weakness in the United  States  economy,  (ii)  advertiser
spending  patterns  and  the  timing  of the  broadcasting  of our  programming,
principally the seasonal nature of sports  programming,  (iii) advertiser demand
on a local/regional  or national basis for radio related  advertising  products,
(iv)  increases or decreases in our  portfolio of program  offerings and related
audiences, including changes in the demographic composition of our audience base
and (v) competitive and alternative programs and advertising mediums.

Our ability to specifically  isolate the relative historical aggregate impact of
price and volume is not practical as  commercial  airtime is sold and managed on
an order-by-order  basis. It should be noted,  however, that the Company closely
monitors  advertiser  commitments for the current calendar year, with particular
emphasis  placed on a  prospective  three month  period.  Factors  impacting the
pricing of commercial  airtime  include,  but are not limited to: (i) the dollar
value,  length and  breadth of the order,  (ii) the desired  reach and  audience
demographic,  (iii) the quantity of commercial airtime available for the desired
demographic  requested  by the  advertiser  for sale at the time their  order is
negotiated;  and (iv) the  proximity  of the date of the order  placement to the
desired  broadcast date of the  commercial  airtime.  Our commercial  airtime is
perishable,  and  accordingly,  our revenues are  significantly  impacted by the
commercial  airtime  available at the time we enter into an arrangement  with an
advertiser.

The principal  critical  components of our operating  expenses are  programming,
production  and  distribution  costs  (including   affiliate   compensation  and
broadcast  rights  fees),   selling  expenses   (including  bad  debt  expenses,
commissions  and  promotional  expenses),  depreciation  and  amortization,  and

                                      -11-


corporate,   general  and   administrative   expenses.   Corporate  general  and
administrative  expenses are primarily  comprised of costs  associated  with the
Infinity  Management   Agreement,   personnel  costs  and  other  administrative
expenses, including those associated with corporate governance matters.

We consider the Company's  operating cost structure to be predominantly fixed in
nature,  and as a result, the Company needs at least several months lead-time to
make  modifications  to its cost structure to react to what it believes are more
than  temporary  increases  or decreases in  advertiser  demand.  This factor is
important in predicting  the Company's  performance  in periods when  advertiser
revenues are increasing or decreasing.  In periods where advertiser revenues are
increasing,  the fixed nature of a  substantial  portion of our costs means that
Operating   Income  will  grow  faster  than  the  related  growth  in  revenue.
Conversely,  in a period of declining revenues Operating Income will decrease by
a greater percentage than the decline in revenue because of the lead-time needed
to reduce the Company's  operating cost structure.  Furthermore,  if the Company
perceives a decline in revenue to be temporary,  it may choose not to reduce its
fixed costs, or may even increase its fixed costs, so as to not limit its future
growth potential when the advertising marketplace rebounds.

Revenues

Revenues  presented by type of commercial  advertisements are as follows for the
years ending December 31,:


                                                                                  
                                  2004                         2003                             2002
                                  ----                         ----                             ----
                               $       % of Total          $         % of Total             $       % of Total
                           --------    ----------       --------     ----------          --------   ----------
Local/Regional             $299,307        53%          $283,687        53%              $302,554        55%
National                    262,939        47%           255,539        47%               248,197        45%
                            -------       ----          --------       ----              --------       ----
Total (1)                  $562,246       100%          $539,226       100%              $550,751       100%
                           ========       ====          ========       ====              ========       ====


(1)  As described above, the Company currently  aggregates revenue data based on
     the type of commercial airtime sold. A number of advertisers  purchase both
     local/regional and national  commercial airtime.  Accordingly,  this factor
     should be  considered in evaluating  the relative  revenues  generated on a
     local/regional  versus national  basis.  Our objective is to optimize total
     revenues from those advertisers.

Revenues  for the year ended  December  31,  2004  increased  $23,020,  or 4.3%,
compared  with the year ended  December  31,  2003.  The increase in revenues is
attributable  to  an  increase  in  demand  for  the  Company's   local/regional
commercial  airtime,  coupled with  non-comparable  revenues associated with the
Company's  exclusive  2004  Summer  Olympic  broadcast.  During  the year  ended
December 31, 2004, revenues  aggregated from the sale of local/regional  airtime
increased  approximately  5.5%, or approximately  $15,620,  while national based
revenues increased approximately 2.9%, or $7,400.

The increase in  local/regional  revenues was facilitated by a combination of an
overall increase in demand for our :10 second commercial airtime, an increase in
the  quantity of  commercial  airtime  available  for sale,  improved  inventory
utilization and management  resulting from a centralization  of sales management
functions,  and the  increased  demand  for  information  services  and  data by
terrestrial and non-terrestrial  users.  Further, the increase in demand for our
local/regional  commercial  airtime was greatest in the Western and  Mid-Western
regions.

In 2004, the increase in our aggregated national based revenues was primarily in
the news and sports  programming  categories  as a result of an  estimated  $6.0
million of revenue associated with the Company's  exclusive 2004 Summer Olympics
radio broadcast and a better radio advertising climate.

Revenues  for the year ended  December  31,  2003  decreased  $11,525,  or 2.0%,
compared with the year ended December 31, 2002. The decrease was due principally
to the absence of  approximately  $6,000 of revenues  recorded in the prior year
from the Company's  exclusive 2002 Winter Olympics radio  broadcast,  an overall
reduction in advertiser demand for our commercial  airtime  immediately prior to
and  concurrent  with the  commencement  of the war with Iraq,  weaker  relative
demand in certain local/regional markets,  reduced fee based traffic information
revenues of  approximately  $1,000 due to the  expiration of certain  contracts,
partially offset by approximately $7,000 of incremental revenues attributable to
new programming developed to reach national audiences.

During the year ended December 31, 2003,  revenues  aggregated  from the sale of
local/regional  airtime declined  approximately 6.2%, or approximately  $18,867,
while national  based  revenues  increased  approximately  3.0%, or $7,342.  The
decrease in  local/regional  revenue was  greatest  in the  northeast  and Texas
regions, while revenue in the western region increased.  Despite the decrease in
local/regional  revenues,  the  Company  continued  to invest in new traffic and
information markets.

                                      -12-

In 2003, the increase in our aggregated national based revenues was accomplished
through attaining higher revenues in the news and sports programming  categories
through adding new sports programming and effective management of our commercial
airtime  partially  offset  by the  absence  of  revenues  from the 2002  Winter
Olympics.

We expect  our  revenues  in 2005 to  increase  compared  with  2004,  resulting
primarily  from an  anticipated  overall  increase in demand for our  commercial
airtime  offerings  due to the  implementation  of sales  strategies to optimize
network audience delivery,  new programming,  inventory management  initiatives,
and the development of new distribution alternatives for our content.

Operating Costs

Operating  costs for the years ended  December 31,  2004,  2003 and 2002 were as
follows:


                                                                                      
                                       2004                           2003                       2002
                                       ----                           ----                       ----
                                    $       % of total          $          % of total        $          % of total
                                --------    ----------       --------      ---------      --------      ---------
Programming,
  production and
  distribution expenses         $278,232      75%            $261,754        75%          $254,779          72%
Selling expenses                  53,246      15%              53,264        15%            59,725          17%
Other operating expenses          38,156      10%              35,564        10%            37,881          11%
                                --------     ---              -------       ----          --------         ----
                                $369,634     100%            $350,582       100%          $352,385         100%
                                ========     ====            ========       ====          ========         ====

Operating  costs  increased  5.4% to $369,634 in 2004 from $350,582 in 2003, and
decreased  1.0%  in 2003  from  $352,385  in  2002.  The  increase  in 2004  was
principally  attributable to an estimated $6.0 million of costs  associated with
our  exclusive  broadcast  of  the  2004  Summer  Olympic  games,  increases  in
programming,  production and distribution expenses resulting from the investment
in national audiences as a result of adding station affiliations, expanding into
approximately four new traffic and information  markets,  the development of new
program  offerings and normal recurring  contractual rate increases with respect
to existing  programming.  In addition,  during the year ended December 31, 2003
the Company  received  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 for the year ended December 31, 2003.

The 2003  decrease  was  principally  attributable  to  approximately  $3,200 of
proceeds  from an  insurance  settlement  related to claims  resulting  from the
September 11, 2001 terrorist  attacks  (included in Other operating  expenses in
the table above).  Excluding this item, operating costs increased  approximately
$1,400,  or 0.4% in 2003.  The net  increase is primarily  attributable  to: (i)
increases in programming,  production and distribution  expenses  resulting from
costs  related to the  development  of new or expanded  program  offerings,  new
traffic and information  markets,  higher sports rights fees resulting from both
new programming and contractual  rate increases with respect to existing program
commitments  and  additional  news costs to cover the war with  Iraq,  partially
offset by the absence of costs  associated  with the Company's  broadcast of the
2002 Winter  Olympics,  (ii) lower  Selling  expenses  including  lower bad debt
expense  (approximately  $2,800),  resulting  from the absence of a  significant
customer's bankruptcy in 2002, and lower employee related expenses,  principally
resulting from lower commissions  earned by the Company's sales personnel due to
lower revenues and (iii) lower Other  operating  expenses due principally to the
insurance settlement discussed above.

We currently anticipate that operating costs will increase in 2005 compared with
2004 due to  expenses  resulting  from  planned  additional  investments  in our
national network  audiences and programs and normal  recurring  contractual cost
increases.  In addition,  we expect to make certain continued investments in our
sales support functions to support our planned growth in revenues.

Depreciation and Amortization

Depreciation and amortization increased 60.1% to $18,429 in 2004 from $11,513 in
2003,  and  increased  nominally  to $11,513 in 2003 from  $11,464 in 2002.  The
increase in 2004 was principally  attributable to higher amortization  resulting
from an increase in the fair market value of the warrants  issued to Infinity as
a part of the extension of the Management  Agreement  which was effective in the
second quarter of 2004.

Corporate General and Administrative Expenses

Corporate general and administrative  expenses increased 21.1% to $8,606 in 2004
from $7,106 in 2003,  and decreased  11.2% in 2003 from $8,005 in 2002. The 2004

                                      -13-

increase was principally  attributable  to higher  expenses  associated with our
corporate  governance  activities,  including  fees  incurred  for  professional
services and increased  severance  amounts.  The 2003  decrease was  principally
attributable to lower compensation expense to Infinity as no incentive bonus was
earned,  partially  offset  by higher  expenses  associated  with our  corporate
governance activities, including fees incurred for professional services.

We expect our  corporate  general and  administrative  costs to increase in 2005
compared  with  2004.  We expect to incur  increased  expenses  relating  to our
compliance  and  corporate  governance  activities.  Further,  we note  that our
incentive  bonus  arrangement  with  Infinity is variable,  contingent  upon our
performance.

Operating Income

Operating  income  decreased 2.6% to $165,577 in 2004 from $170,025 in 2003, and
decreased 5.0% in 2003 from $178,897 in 2002. The 2004 decrease was  principally
attributable to higher depreciation and amortization expense and operating costs
partially  offset by increased net revenues.  The 2003 decrease was  principally
attributable to the decline in revenues.

Interest Expense

Interest  expense  was  $11,911,  $10,132  and  $6,955  in 2004,  2003 and 2002,
respectively.  The 2004 increase was attributable to higher outstanding debt and
the accelerated  amortization of previously  capitalized  deferred debt issuance
costs in connection with the refinancing of our bank credit  facility.  The 2003
increase was attributable to higher  outstanding debt in 2003 as a result of the
Company's  issuance  of $200,000 in a  combination  of 7 and 10-year  fixed rate
Senior Unsecured Notes in the fourth quarter of 2002 and higher average interest
rates.  Our average  effective  interest rate for 2004,  2003 and 2002 was 3.1%,
3.1% and 2.9%,  respectively.  The  increase  in the 2004 and 2003  debt  levels
result  from  share  repurchases  pursuant  to the  Company's  stock  repurchase
program, which is further described below.

We expect that our interest expense will increase in 2005 commensurate with our
anticipated higher average debt levels.

Other (Income) Expense

The  Company  owned  450,000  shares of  common  stock in  SportsLine.com,  Inc.
("SportsLine,"  previously  known as SportsLine USA, Inc.). In December of 2004,
SportsLine was acquired by Viacom Inc. and the terms of the acquisition provided
that all public  shareholders'  of SportsLine were entitled to receive cash upon
closing of the  transaction.  Included  in Other  Income  for the period  ending
December  31,  2004,  is a net gain of $787,500  resulting  from the sale of the
Company's interest in SportsLine.

Provision for income taxes

The income tax provisions for 2004, 2003 and 2002 are based on annual  effective
tax rates of 38.2%,  37.5% and  36.6%,  respectively,  resulting  in income  tax
expense of $59,124,  $59,906 and $62,937 in 2004,  2003 and 2002,  respectively.
The  Company's  effective  income  tax  rate in  2004  was  higher  than in 2003
principally  as a result  of  higher  state  taxes  resulting  from  recent  tax
developments  in the states in which we operate.  The Company's  effective  rate
increased in 2003 from 2002 as a result of similar state changes.  For the years
ended  December 31, 2004,  2003 and 2002 a portion of the  Company's  income tax
expense  is  non-cash  as a result of tax  deductions  related  to stock  option
exercises  and warrant  purchases of $18,182,  $3,911 and $39,245  respectively,
which are credited directly to additional paid in capital.

Net income

Net income in 2004  decreased 4.5% to $95,490 ($.98 per basic share and $.97 per
diluted  share) from $100,039  ($.99 per basic share and $.97 per diluted share)
in 2003 and  decreased  8.3% in 2003 from  $109,115  ($1.03 per basic  share and
$1.00 per diluted share) in 2002.

Earnings per share

Weighted  averages  shares  outstanding for purposes of computing basic earnings
per share were  97,177,000,  101,243,000 and 105,992,000 in 2004, 2003 and 2002,
respectively.  The decreases in each of the previous two periods were  primarily
attributable to Common Stock  repurchases  under the Company's stock  repurchase
program  partially  offset by  additional  share  issuances as a result of stock
option exercises.  Weighted average shares outstanding for purposes of computing
diluted earnings per share were 98,454,000, 103,625,000 and 109,101,000 in 2004,
2003 and 2002, respectively.  The changes in weighted average diluted shares are
due  principally  to the decrease in basic shares and the effect of the decrease
in the  Company's  share price,  partially  offset by the effect of stock option
grants.

                                      -14-

Liquidity and Capital Resources

The Company continually  projects  anticipated cash requirements,  which include
share  repurchases,   acquisitions,  capital  expenditures,  and  principal  and
interest  payments on its outstanding  indebtedness.  Funding  requirements  are
financed  through  cash flow from  operations  and the  issuance  of  short-term
borrowings and/or long-term debt.

At December 31, 2004, the Company's principal sources of liquidity were its cash
and cash equivalents of $10,932 and available borrowings under its bank facility
which is further described below.

The Company has and continues to expect to generate  significant cash flows from
operating activities.  For the years ended December 31, 2004, 2003 and 2002, net
cash  provided by operating  activities  were  $127,974,  $107,870 and $147,618,
respectively.  For 2004, net cash from operating  activities  increased  $20,104
from 2003.  The increase is primarily  attributable  to a decrease in cash taxes
paid resulting from higher tax benefits from the exercise of stock options.  For
2003,  net cash from  operating  activities  decreased  $39,748  from 2002.  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.  Upon
the  adoption of  Statement  of Financial  Accounting  Standards  123R,  the tax
benefit from the exercise of stock  options  will be  classified  as a financing
activity.

At December 31, 2004, the Company has an unsecured five-year $120,000 term loan,
and a  five-year  $180,000  revolving  credit  facility  (collectively  the "New
Facility"),  both of which  mature in 2009.  This new  facility was entered into
with a  syndicate  of banks led by JP Morgan  Chase  Bank and Bank of America on
March 3, 2004 when the Company refinanced its existing senior loan agreement. In
connection  with the  closing of the  facility,  the Company  borrowed  the full
amount  of the  term  loan,  the  proceeds  of  which  were  used to  repay  the
outstanding  borrowing under the existing facility. As of December 31, 2004, the
Company had available borrowings of $140,000 under its New Facility. Interest on
the New Facility is payable at the prime rate plus an applicable margin of up to
.25% or LIBOR plus an applicable margin of up to 1.25%, at the Company's option.
In addition,  the Company has entered into fixed to floating  interest rate swap
agreements for 50% of the notional amount of its two senior unsecured Notes. The
New Facility  and/or  Notes  contain  covenants  relating to  dividends,  liens,
indebtedness,  capital expenditures,  and interest coverage and leverage ratios.
None of these covenants are expected to have an impact on the Company's  ability
to operate and manage its business.

In conjunction with the Company's objective of enhancing  shareholder value, the
Company's Board of Directors has authorized a stock repurchase program. In 2004,
the Company purchased 8,456,000 shares of the Company's Common Stock for a total
cost of $216,503. In 2003, the Company purchased  approximately 5,534,000 shares
of the  Company's  Common  Stock  for a total  cost  of  $180,412  and in  2002,
purchased  approximately  7,414,000  shares of the  Company's  Common  Stock and
warrants for a total cost of  $239,407.  In 2005  (through  January  2005),  the
Company  repurchased  an additional  635,000 shares of Common Stock at a cost of
$15,893.  The  Company  expects  to  continue  to use its cash  flow and  credit
facilities to  repurchase  its Common  Stock.  At the end of January  2005,  the
Company had  authorization  to repurchase  up to an  additional  $146,245 of its
Common Stock.

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.

Contractual Obligations and Commitments

The  following  table lists the Company's  future  contractual  obligations  and
commitments as of December 31, 2004:


                                                                            
                                                         Payments  due  by Period
                                                         ------------------------
    Contractual Obligations            Total     <1 year     1 - 3 years   3 - 5 years  >5 years
    -----------------------            -----     -------     -----------   -----------  --------

    Long-term Debt (1)                $443,944   $13,931       $27,861       $23,511    $378,641
    Capital Lease Obligations            6,400     $ 960        $1,920        $1,920       1,600
    Operating Leases                    36,465     7,039        12,635        10,387       6,404
    Other Long-term Obligations        241,320    61,534       106,389        59,396      14,001
                                      --------   -------       -------       -------    --------
    Total Contractual Obligations     $728,129   $83,464      $148,805       $95,214    $400,646
                                      ========   =======      ========       =======    ========

(1)  Includes the  estimated  net interest  payments on fixed and variable  rate
     debt and  related  interest  rate  swaps.  Estimated  interest  payments on
     floating rate instruments are computed using the Company's interest rate as
     of December 31, 2004, and borrowings  outstanding  are assumed to remain at
     current levels.

                                      -15-

The Company has long-term  noncancelable  operating lease commitments for office
space and  equipment.  The  Company has also  entered  into  capital  leases for
satellite transponders.

Included in Other  Long-term  Obligations  enumerated  in the table  above,  are
various contractual agreements to pay for talent, broadcast rights, research and
various related party arrangements, including $126,830 of payments due under the
Management and Representation  Agreements.  See Related Parties below and Note 2
to the consolidated financial statements for further discussion.

Related Parties

Infinity  holds a common  equity  position in the Company and  provides  ongoing
management services to the Company under the terms of the Management  Agreement.
In return for receiving  services  under the Management  Agreement,  the Company
compensates   Infinity  via  an  annual  base  fee  and  provides  Infinity  the
opportunity  to earn an incentive  bonus if the Company  exceeds  pre-determined
targeted  cash  flows.  For the year ended  December  31,  2004,  2003 and 2002,
Infinity earned cash compensation of $2,959, $2,793 and $5,012, respectively.

In addition to the base fee and  incentive  compensation  described  above,  the
Company  granted to Infinity  two fully vested and  non-forfeitable  warrants to
purchase  4,000,000  shares  of the  Company's  Common  Stock  in the  aggregate
(comprised of one warrant to purchase  2,000,000  shares at an exercise price of
$10.00 per share and another warrant to purchase 2,000,000 shares at an exercise
price  of  $12.50  per  share)  in  connection  with  extending  the term of the
Management  Agreement  in  March  1999  for an  additional  term of  five  years
commencing  April 1, 1999. Such warrants were only exercisable to the extent the
Company's  Common Stock reached certain market prices,  which have  subsequently
been achieved. In 2002 Infinity sold its $12.50 warrant,  representing 2,000,000
shares of Common Stock,  to the Company for cash  consideration  of $51,070.  In
2001, Infinity sold its $10.00 warrant,  representing 2,000,000 shares of Common
Stock, to the Company for cash  consideration of $41,350.  The repurchase of the
Infinity  warrants for cash  consideration  has been reflected as a reduction to
Additional Paid in Capital during 2002 and 2001.

On May 29,  2002,  the  Company's  shareholders  ratified  an  extension  of the
Management  Agreement for an additional five-year term, which commenced April 1,
2004 and expires on March 31, 2009. In return for receiving  services  under the
Management  Agreement,  the Company will continue to compensate  Infinity via an
annual base fee and an  opportunity to earn an annual  incentive  bonus provided
certain  performance  objectives are met.  Additionally,  the Company granted to
Infinity seven fully vested and  nonforfeitable  warrants to purchase  4,500,000
shares of the  Company's  Common  Stock  (comprised  of two warrants to purchase
1,000,000 Common shares per warrant and five warrants to purchase 500,000 Common
shares per warrant).  For additional information on these warrants see Note 2 to
our consolidated financial statements.

In addition to the Management Agreement described above, the Company also enters
into other  transactions  with Infinity 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
with an affiliate of Infinity - the  "Representation  Agreement") to operate the
CBS  Radio  Networks,  affiliation  agreements  with  many of  Infinity's  radio
stations and the purchase of programming  rights from Infinity and affiliates of
Infinity.  The Management  Agreement provides that all transactions,  other than
the Management  Agreement and Representation  Agreement to operate the CBS Radio
Networks which were ratified by the Company's shareholders,  between the Company
and Infinity 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 Infinity or any of its affiliates  must be approved by the Company's
Board of  Directors.  During 2004,  the Company  incurred  expenses  aggregating
approximately $84,338 for the Representation  Agreement,  affiliation agreements
and the purchase of programming rights from Infinity and affiliates  ($80,659 in
2003 and $77,566 in 2002).

Critical Accounting Policies and Estimates

Westwood One's  financial  statements are prepared in accordance with accounting
principles that are generally  accepted in the United States. The preparation of
these financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue and expenses as
well  as  the  disclosure  of  contingent  assets  and  liabilities.  Management
continually  evaluates its estimates  and judgments  including  those related to
allowances for doubtful accounts,  useful lives of property, plant and equipment
and intangible assets, and other  contingencies.  Management bases its estimates
and judgments on historical experience and other factors that are believed to be
reasonable  under the  circumstances.  Actual  results  may  differ  from  these
estimates  under  different  assumptions or  conditions.  We believe that of our
significant  accounting  policies,  the following may involve a higher degree of
judgment or complexity.

Allowances for doubtful accounts - we maintain  allowances for doubtful accounts
                                      -16-

for  estimated  losses which may result from the  inability of our  customers to
make  required   payments.   We  base  our   allowances  on  the  likelihood  of
recoverability  of  accounts  receivable  by  aging  category,   based  on  past
experience and taking into account current  collection  trends that are expected
to  continue.  If  economic  or  specific  industry  trends  worsen  beyond  our
estimates,  we would  be  required  to  increase  our  allowances  for  doubtful
accounts.  Alternatively,  if trends improve  beyond our estimates,  we would be
required to decrease our  allowance  for doubtful  accounts.  Our  estimates are
reviewed periodically, and adjustments are reflected through bad debt expense in
the period they become known. Our bad debt expense approximated $874, or 0.2% of
revenue,  in 2004,  $3,624, or 0.7% of revenue,  in 2003, and $6,379, or 1.2% of
revenue,  in 2002.  Changes in our bad debt experience can materially affect our
results of  operations.  Our  allowance  for bad debts  requires  us to consider
anticipated  collection  trends  and  requires  a high  degree of  judgment.  In
addition,  as fully described herein,  our results in any reporting period could
be impacted by relatively few significant bad debts.

Estimated useful lives of property, plant and equipment, and intangible assets -
we estimate the useful lives of property,  plant and  equipment  and  intangible
assets in order to determine the amount of depreciation and amortization expense
to be  recorded  during  any  reporting  period.  The  useful  lives,  which are
disclosed in Note 1 of the consolidated  financial statements,  are estimated at
the time the asset is  acquired  and are  based on  historical  experience  with
similar assets as well as taking into account anticipated technological or other
changes. If technological changes were to occur more rapidly than anticipated or
in a different form than anticipated,  the useful lives assigned to these assets
may need to be shortened, resulting in the recognition of increased depreciation
and amortization expense in future periods. During 2002, the Company changed the
useful lives of certain studio and broadcasting  equipment.  Alternately,  these
types of technological  changes could result in the recognition of an impairment
charge to reflect the write-down in value of the asset.

Westwood  evaluates  its  intangible  assets  for  impairment  annually  or more
frequently  if  impairment  indicators  arise in  accordance  with  Statement of
Financial  Accounting  Standards  (SFAS) No. 142,  Goodwill and Other Intangible
Assets.  Westwood's  intangible  asset  balance  is  material  ($988  million at
December 31, 2004),  and the evaluation of intangible  assets  requires that the
Company make important  assumptions and judgments about future operating results
and cash flows as well as discount rates. In estimating future operating results
and cash flows,  the Company  considers  internal  budgets and strategic  plans,
expected long term growth rates,  and the effects of external factors and market
conditions.  If actual  future  operating  results  and cash  flows or  external
conditions  differ  from the  Company's  judgments,  or if  changes  in  assumed
discount  rates are made,  an  impairment  charge may be necessary to reduce the
carrying value of intangible assets, which charge could be material to the
Company's operations.

Valuation of stock options and warrants and barter  transactions -- For purposes
of computing the value of stock options and warrants,  various valuation methods
and  assumptions can be used. The selection of a different  valuation  method or
use of  different  assumptions  may  result  in a value  that  is  significantly
different from that computed by the Company. In certain  circumstances,  usually
depending on the complexity of the calculation,  we may employ the services of a
valuation expert.

Barter  transactions  represent  the exchange of  commercial  announcements  for
merchandise  or  services.  These  transactions  are recorded at the fair market
value of the  commercial  announcements  relinquished,  or the fair value of the
merchandise  and services  received.  A wide range of factors  could  materially
affect the fair market value of commercial  airtime sold in future  periods (See
Section on  "Forward-Looking  Statements and Factors  Affecting  Forward-Looking
Statements" on page 18), which would require the Company to increase or decrease
the amount of assets and liabilities  and related revenue and expenses  recorded
from prospective barter transactions.

Recent Accounting Pronouncements Affecting Future Results

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment" ("SFAS 123R"), which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation,"  ("SFAS 123") and supercedes APB Opinion No. 25,  "Accounting for
Stock  Issued to  Employees."  SFAS 123R  requires all  share-based  payments to
employees,  including grants of employee stock options,  to be recognized in the
financial statements based on their fair values beginning with the first interim
or annual period after June 15, 2005,  with early adoption  encouraged.  The pro
forma  disclosures  previously  permitted  under  SFAS 123 no longer  will be an
alternative to financial statement recognition. The Company is required to adopt
SFAS 123R in the second  quarter of fiscal  2005.  Under SFAS 123R,  the Company
must  determine  the  appropriate  fair  value  model  to be  used  for  valuing
share-based  payments,  the amortization  method for  compensation  cost and the
transition method to be used at date of adoption. The transition methods include
prospective  and retroactive  adoption  options.  Under the retroactive  option,
prior periods may be restated either as of the beginning of the year of adoption
or for all periods presented.  The prospective method requires that compensation
expense be recorded for all unvested stock options and  restricted  stock at the
beginning of the first quarter of adoption of SFAS 123R,  while the  retroactive
methods  would record  compensation  expense for all unvested  stock options and
restricted  stock  beginning  with the first  period  restated.  The  Company is
evaluating the  requirements  of SFAS 123R and expects that the adoption of SFAS

                                      -17-

123R will  have a  material  impact on the  Company's  consolidated  results  of
operations and earnings per share. The Company has not yet determined the method
of adoption or the effect of adopting  SFAS 123R.  The Company  believes the pro
forma  disclosures  in Note 1,  "Significant  Accounting  Policies," on page F-8
under "Stock-Based  Compensation" provide an appropriate short-term indicator of
the level of expense that will be recognized  in accordance  with SFAS No. 123R.
However,  the total  expense  recorded in future  periods will depend on several
variables,  including the number of  shared-based  awards that vest and the fair
value of those vested awards.

In October 2004, the American Jobs Creation Act of 2004 (the "AJCA") was passed.
The AJCA  provides a deduction  for income from  qualified  domestic  production
activities  which will be phased in from 2005 through 2010. In return,  the AJCA
also provides for a two-year phase-out of the existing  extra-territorial income
exclusion   for  foreign  sales  that  was  viewed  to  be   inconsistent   with
international  trade protocols by the European Union. In December 2004, the FASB
issued FASB Staff  Position  ("FSP") No. 109-1,  "Application  of FASB Statement
No.109,  Accounting  for  Income  Taxes,  to  the  Tax  Deduction  on  Qualified
Production  Activities  by the  American  Jobs  Creation Act of 2004." FSP 109-1
treats the  deduction as a "special  deduction"  as described in FAS No. 109. As
such, the special deduction has no effect on deferred tax assets and liabilities
existing at the enactment  date.  Rather,  the impact of this  deduction will be
reported in the same period in which the deduction is claimed in the tax return.
We are  currently  evaluating  the impact  the AJCA will have on our  results of
operations and financial position.

The AJCA also creates a temporary incentive for U.S.  corporations to repatriate
accumulated  income  earned  abroad  by  providing  an  85%  dividends  received
deduction for certain  dividends  from  controlled  foreign  corporations.  This
aspect of the AJCA legislation will not have an impact on the Company's  results
of  operations  and  financial  position  as the Company  does not have  foreign
operations.

In December  2004,  the FASB  issued  SFAS  No.153,  "Exchanges  of  Nonmonetary
Assets--an  Amendment of APB No. 29" (SFAS 153). The amendments made by SFAS 153
are based on the  principle  that  exchanges  of  nonmonetary  assets  should be
measured  based  on  the  fair  value  of the  assets  exchanged.  Further,  the
amendments  eliminate the narrow exception for nonmonetary  exchanges of similar
productive  assets and  replace it with a broader  exception  for  exchanges  of
nonmonetary  assets that do not have  "commercial  substance."  This standard is
effective for  nonmonetary  asset  exchanges  occurring  after July 1, 2005. The
adoption of this standard is not expected to impact the  Company's  Consolidated
Financial Statements.

Forward-Looking Statements and Factors Affecting Forward-Looking Statements

The Private Securities  Litigation Reform Act of 1995 provides a safe harbor for
forward-looking   statements   made  by  or  on  the  behalf  of  the   Company.
Forward-looking  statements  involve known and unknown risks,  uncertainties and
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.  These
statements  are  based on  management's  views and  assumptions  at the time the
statements  are made,  however  no  assurances  can be given  that  management's
expectations will come to pass. The forward-looking  statements included in this
document,  including those related to our revenue,  operating costs, general and
administrative  costs,  interest expense and capital expenditure trend for 2005,
are only made as of the date of this  document and the Company does not have any
obligation  to  publicly  update  any   forward-looking   statement  to  reflect
subsequent events or circumstances.

Factors That May Affect Forward-Looking Statements

A wide  range  of  factors  could  materially  affect  future  developments  and
performance including the following:

--   The  Company  is  managed  by  Infinity  under the terms of the  Management
     Agreement,  which expires in 2009.  In addition,  the Company has extensive
     business  dealings with Infinity and its affiliates in its normal course of
     business.  The Company's  business prospects could be adversely affected by
     its inability to retain Infinity's services under the Management  Agreement
     beyond the contractual term.

--   The  Company  competes  in  a  highly  competitive   business.   Its  radio
     programming  competes for audiences and advertising  revenues directly with
     radio and television stations and other syndicated programming,  as well as
     with such other media as newspapers,  magazines, cable television,  outdoor
     advertising  and direct  mail.  Audience  ratings  and  revenue  shares are
     subject to change and any adverse  change in a particular  geographic  area
     could  have a  material  and  adverse  effect on the  Company's  ability to
     attract not only  advertisers in that region,  but national  advertisers as
     well.  Future  operations  are further  subject to many factors which could
     have an adverse  effect upon the  Company's  financial  performance.  These
     factors include:

                                      -18-

          -    economic   conditions,   both   generally  and  relative  to  the
               broadcasting industry;  
          -    shifts in population and other demographics;
          -    the level of competition for advertising dollars;
          -    fluctuations in programming costs;
          -    technological changes and innovations;
          -    changes in labor conditions; and
          -    changes in  governmental  regulations and policies and actions of
               federal regulatory bodies.

     Although the Company  believes that its radio  programming  will be able to
     compete effectively and will continue to attract audiences and advertisers,
     there can be no  assurance  that the  Company  will be able to  maintain or
     increase the current audience ratings and advertising revenues.

     --   The radio  broadcasting  industry has experienced a significant amount
          of consolidation  in recent years. As a result,  certain major groups,
          including Infinity and Clear Channel Communications ("Clear Channel"),
          have emerged as powerful  forces in the  industry.  Given the size and
          financial  resources  of  these  station  groups,  they may be able to
          develop their own  programming  as a substitute to that offered by the
          Company or, alternatively,  they could seek to obtain programming from
          the Company's competitors.  Any such occurrences, or merely the threat
          of such  occurrences,  could adversely affect the Company's ability to
          negotiate  favorable  terms with its  station  affiliates,  to attract
          audiences  and to attract  advertisers.  In addition,  a major station
          group has  recently  announced  plans to  reduce  overall  amounts  of
          commercial inventory broadcast on their radio stations.  To the extent
          similar  initiatives are adopted by other major station  groups,  this
          could  adversely  impact  the  amount  of  commercial  inventory  made
          available  to the  Company  or  increase  the cost of such  commercial
          inventory at the time of renewal of existing affiliate agreements.

     --   Changes  in  U.S.  financial  and  equity  markets,  including  market
          disruptions and significant  interest rate fluctuations,  could impede
          the Company's  access to, or increase the cost of, external  financing
          for its operations and investments.

     --   The Company  believes  relations  with its employees  and  independent
          contractors are  satisfactory.  However,  the Company may be adversely
          affected by future labor  disputes,  which may lead to increased costs
          or disruption of operations in any of the Company s business units.

This list of factors  that may affect  future  performance  and the  accuracy of
forward-looking  statements  is  illustrative,  but by no means  all  inclusive.
Accordingly,  all  forward-looking  statements  should  be  evaluated  with  the
understanding of their inherent uncertainty.


Item 7A. 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. As of December 31, 2004,  the
Company had $160,000 outstanding under the new facility.

                                      -19-

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 8. Financial Statements and Supplementary Data

The Consolidated  Financial  Statements and the related notes and schedules were
prepared by and are the responsibility of management.  The financial  statements
and related notes were prepared in conformity with generally accepted accounting
principles  and include  amounts  based upon  management's  best  estimates  and
judgments.  All financial  information in this annual report is consistent  with
the consolidated financial statements.

The Company maintains  internal  accounting control systems and related policies
and  procedures  designed  to  provide  reasonable  assurance  that  assets  are
safeguarded,  that  transactions  are executed in accordance  with  management's
authorization and properly  recorded,  and that accounting records may be relied
upon  for  the  preparation  of  consolidated  financial  statements  and  other
financial  information.   The  design,  monitoring,  and  revision  of  internal
accounting control systems involve,  among other things,  management's  judgment
with respect to the  relative  cost and  expected  benefits of specific  control
measures.

Westwood  One's   consolidated   financial   statements  have  been  audited  by
PricewaterhouseCoopers   LLP,  independent  registered  accountants,   who  have
expressed their opinion with respect to the presentation of these statements.

The Audit  Committee of the Board of  Directors,  which is  comprised  solely of
directors  who are not  employees of the Company,  meets  periodically  with the
independent  auditors,  as  well  as  with  management,  to  review  accounting,
auditing,  internal  accounting  controls and financial  reporting matters.  The
Audit Committee,  pursuant to its Charter, is also responsible for retaining the
Company's  independent  accountants.  The independent  accountants have full and
free  access to the Audit  Committee  with and  without  management's  presence.
Further,  as a result of changes in the listing standards for the New York Stock
Exchange and as a result of the Sarbanes-Oxley Act of 2002, members of the Audit
Committee will be required to meet stringent independence standards and at least
one member must have financial  expertise.  The majority of our Audit  Committee
members satisfy the new independence  standards and the Audit Committee also has
at least one member with financial expertise.

The Consolidated Financial Statements and the related notes and schedules of the
Company are indexed on page F-1 of this Report, and attached hereto as pages F-1
through F-18 and by this reference incorporated herein.


Item  9.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures
 
The Company's  management,  under the supervision and with the  participation of
the Company's Chief Executive Officer and Chief Financial  Officer,  carried out
an evaluation of the  effectiveness of the design and operation of the Company's
disclosure  controls and procedures as of December 31, 2004 (the  "Evaluation").
Based upon the  Evaluation,  the  Company's  Chief  Executive  Officer and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures (as defined in Exchange Act Rule 13a-15(e)) are effective in ensuring
that information  required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded,  processed,  summarized and
reported within the time periods specified by the SEC's rules and forms.
 
Management's Report on Internal Control over Financial Reporting
 
The  Company's  management  is  responsible  for  establishing  and  maintaining
adequate  internal  control over  financial  reporting.  The Company's  internal
control over financial  reporting is a process designed under the supervision of
its Chief Executive  Officer and Chief Financial  Officer to provide  reasonable
assurance  regarding the reliability of financial  reporting and the preparation
of the Company's  financial  statements for external purposes in accordance with
accounting  principles  generally  accepted  in the  United  States of  America.

                                      -20-

Management  evaluated the  effectiveness of the Company's  internal control over
financial  reporting using the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal  Control--Integrated
Framework.  Management,  under the supervision and with the participation of the
Company's Chief  Executive  Officer and Chief  Financial  Officer,  assessed the
effectiveness of the Company's  internal control over financial  reporting as of
December 31, 2004 and concluded that it is effective.
 
The    Company's     independent     registered    public    accounting    firm,
PricewaterhouseCoopers  LLP,  has audited  the  effectiveness  of the  Company's
internal  control over financial  reporting and  management's  assessment of the
effectiveness of the Company's  internal control over financial  reporting as of
December 31, 2004, and has expressed  unqualified opinions in their report which
appears on page F-2.
 
Changes in Internal Control over Financial Reporting
 
There was no change in the Company's  internal control over financial  reporting
that  occurred  during  the  Company's  most  recent  fiscal  quarter  that  has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

Item 9B.  Other Information

None.

                                      -21-


                                    PART III

Item 10. Directors and Executive Officers of the Registrant

     This  information is incorporated by reference to the Company's  definitive
proxy  statement to be filed  pursuant to Regulation 14A not later than 120 days
after the end of the Company's fiscal year.

     Additionally,  the Company has submitted to the NYSE a certification by its
Chief  Executive  Officer  that as of  June  1,  2004,  he is not  aware  of any
violation by the Company of the NYSE's Corporate Governance listing standards.


Item 11. Executive Compensation

     This  information is incorporated by reference to the Company's  definitive
proxy  statement to be filed  pursuant to Regulation 14A not later than 120 days
after the end of the Company's fiscal year.


Item 12.  Security  Ownership of Certain  Beneficial  Owners and  Management and
          Related Stockholder Matters

     This  information is incorporated by reference to the Company's  definitive
proxy  statement to be filed  pursuant to Regulation 14A not later than 120 days
after then end of the Company's fiscal year.


Item 13. Certain Relationships and Related Transactions

     This  information is incorporated by reference to the Company's  definitive
proxy  statement to be filed  pursuant to Regulation 14A not later than 120 days
after the end of the Company's fiscal year.


Item 14. Principal Accountant Fees and Services

     This  information is incorporated by reference to the Company's  definitive
proxy  statement to be filed  pursuant to Regulation 14A not later than 120 days
after the end of the Company's fiscal year.

                                      -22-


                                     PART IV

Item 15.   Exhibits, Financial Statement Schedules

(a) Documents filed as part of this Report on Form 10-K

1, 2.Financial  statements  and  schedules to be filed  hereunder are indexed on
     page F-1 hereof.

3.   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 Amendment to Employment  Agreement,  dated  October 27, 2003,  between
          Registrant and Norman J. Pattiz. (16)
     10.3 Form of Indemnification Agreement between Registrant and its Directors
          and Executive Officers. (1)
     10.4 Credit  Agreement,  dated March 2, 2004,  between  Registrant  and The
          Lenders and JPMorgan Chase Bank as Administrative Agent. (16)
     10.5 Purchase  Agreement,  dated as of August 24, 1987,  between Registrant
          and National Broadcasting Company, Inc. (2)
     10.6 Agreement  and Plan of Merger  among  Registrant,  Copter  Acquisition
          Corp. and Metro Networks, Inc. dated of June 1, 1999 (9)
     10.7 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)
     10.8 Management Agreement, dated as of March 30, 1999, and amended on April
          15, 2002 between Registrant and Infinity Broadcasting Corporation. (9)
          (13)
     10.9 Representation  Agreement,   dated  as  of  March  31,  1997,  between
          Registrant and CBS, Inc. (7) (13)
   *10.10 Westwood One Amended 1999 Stock Incentive Plan. (9)
   *10.11 Westwood One, Inc. 1989 Stock Incentive Plan. (3)
   *10.12 Amendments  to the Westwood  One,  Inc.  Amended 1989 Stock  Incentive
          Plan. (4) (5)
    10.13 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)
    10.14 Form  of  Stock  Option  Agreement  under   Registrant's   1999  Stock
          Incentive Plan. (17)
   *10.15 Employment Agreement,  effective January 1, 2004, between Registrant
          and Andrew Zaref.
   *10.16 Employment Agreement,  effective May 1, 2004, between Registrant and
          Peter Kosann.
   *10.17 Employment  Agreement, dated  June 1,  1999,  as  amended  between
          Registrant and Charles I. Bortnick.
    21.   List of Subsidiaries. (16)
    22.   Consent of Independent Registerd Public Accounting Firm.
    31.1  Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002.
    31.2  Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002.
    32.1  Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.
    32.2  Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.

*********************************
*Indicates a management contract or compensatory plan

                                      -23-



(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.
(16) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the year
     ended December 31, 2003 and incorporated herein by reference.
(17) Filed as an  exhibit  to  Registrant's  current  report  on Form 8-K  dated
     October 12, 2004 and incorporated herein by reference.

                                      -24-



                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.

Date:  March 15, 2005                              By  /S/ ANDREW ZAREF
                                                   ------------------
                                                   Andrew Zaref
                                                   Chief Financial Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

   Signature                         Title                           Date


 /S/ SHANE COPPOLA         Director, President and               March 15, 2005
------------------         Chief Executive Officer
Shane Coppola              (Principal Executive Officer)

 /S/ ANDREW ZAREF          Chief Financial Officer               March 15, 2005
-----------------          (Principal Financial Officer and
Andrew Zaref               Chief Accounting Officer)

/S/ NORMAN J. PATTIZ       Chairman of the Board of              March 15, 2005
--------------------       Directors
Norman J. Pattiz

/S/ DAVID L. DENNIS        Director                              March 15, 2005
-------------------
David L. Dennis

/S/  GERALD GREENBERG      Director                              March 15, 2005
---------------------
Gerald Greenberg

/S/ ROBERT K. HERDMAN      Director                              March 15, 2005
---------------------
Robert K. Herdman

/S/  JOEL HOLLANDER        Director                              March 15, 2005
-------------------
Joel Hollander

/S/  DENNIS HOLT           Director                              March 15, 2005
----------------
Dennis Holt

/S/  MARIA D. HUMMER       Director                              March 15, 2005
--------------------
Maria D. Hummer

/S/  STEVEN A. LERMAN      Director                              March 15, 2005
---------------------
Steven A. Lerman

/S/ GEORGE MILES           Director                              March 15, 2005
----------------
George Miles

/S/  LESLIE MOONVES        Director                              March 15, 2005
-------------------
Leslie Moonves

/S/  JOSEPH B. SMITH       Director                              March 15, 2005
--------------------
Joseph B. Smith

/S/ FARID SULEMAN          Director                              March 15, 2005
-----------------
Farid Suleman
                                      -25-

WESTWOOD ONE, INC.
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULE




                                                                                  

1. Consolidated Financial Statements                                             Page
                                                                                 ----

   --Report of Independent Registered Public Accounting Firm                      F-2

   --Consolidated Balance Sheets at December 31, 2004
     and 2003                                                                     F-3

   --Consolidated Statements of Operations for the years
     ended December 31, 2004, 2003 and 2002                                       F-4

   --Consolidated Statements of Shareholders' Equity
     for the years ended December 31, 2004, and 2003                              F-5

   --Consolidated Statements of Cash Flows for the years
     ended December 31, 2004, 2003 and 2002                                       F-6

   --Notes to Consolidated Financial Statements                                   F-7 - F-18




2. Financial Statement Schedule:

   II. -Valuation and Qualifying Accounts                                         F-18


All other  schedules  have been  omitted  because they are not  applicable,  the
required  information is immaterial,  or the required information is included in
the consolidated financial statements or notes thereto.



             Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Westwood One, Inc.:

We have  completed an integrated  audit of Westwood One,  Inc.'s  ("Westwood" or
"the  Company")  2004  consolidated  financial  statements  and of its  internal
control over financial  reporting as of December 31, 2004 and audits of its 2003
and 2002 consolidated  financial  statements in accordance with the standards of
the Public Company  Accounting  Oversight Board (United  States).  Our opinions,
based on our audits, are presented below.

Consolidated financial statements and financial statement schedule

In our opinion, the consolidated financial statements listed in the accompanying
index  present  fairly,  in all material  respects,  the  financial  position of
Westwood One, Inc. and its  subsidiaries  at December 31, 2004 and 2003, and the
results of their  operations and their cash flows for each of the three years in
the period ended  December 31, 2004 in  conformity  with  accounting  principles
generally accepted in the United States of America. In addition, in our opinion,
the financial  statement  schedule  listed in the  accompanying  index  presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.  These financial
statements  and  financial  statement  schedule  are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial  statements and financial  statement  schedule based on our audits. We
conducted our audits of these statements in accordance with the standards of the
Public Company  Accounting  Oversight  Board (United  States).  Those  standards
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial statements are free of material misstatement.  An audit of
financial  statements includes examining,  on a test basis,  evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

Internal control over financial reporting

Also,  in our opinion,  management's  assessment,  included in the  accompanying
Management's Report on Internal Control over Financial Reporting appearing under
Item 9A, that the Company  maintained  effective internal control over financial
reporting  as of December  31, 2004 based on  criteria  established  in Internal
Control  -  Integrated   Framework   issued  by  the   Committee  of  Sponsoring
Organizations  of the  Treadway  Commission  (COSO),  is fairly  stated,  in all
material respects,  based on those criteria.  Furthermore,  in our opinion,  the
Company  maintained,  in all material respects,  effective internal control over
financial  reporting as of December 31, 2004,  based on criteria  established in
Internal  Control -  Integrated  Framework  issued by the  COSO.  The  Company's
management  is  responsible  for  maintaining  effective  internal  control over
financial  reporting  and for its  assessment of the  effectiveness  of internal
control over financial  reporting.  Our responsibility is to express opinions on
management's  assessment  and on the  effectiveness  of the  Company's  internal
control over financial  reporting  based on our audit. We conducted our audit of
internal  control over financial  reporting in accordance  with the standards of
the Public Company Accounting  Oversight Board (United States).  Those standards
require that we plan and perform the audit to obtain reasonable  assurance about
whether  effective  internal control over financial  reporting was maintained in
all material  respects.  An audit of internal  control over financial  reporting
includes   obtaining  an   understanding  of  internal  control  over  financial
reporting, evaluating management's assessment, testing and evaluating the design
and operating  effectiveness  of internal  control,  and  performing  such other
procedures as we consider necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinions.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (i) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions of the assets of the company;  (ii)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company;  and (iii) provide  reasonable  assurance  regarding  prevention or
timely  detection  of  unauthorized  acquisition,  use,  or  disposition  of the
company's assets that could have a material effect on the financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

New York, NY                                /S/ PRICEWATERHOUSECOOPERS LLP
March 15, 2005                              ------------------------------
                                            PricewaterhouseCoopers LLP
 
                                      F-2

                               WESTWOOD ONE, INC.
                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except share amounts)

                                                                                       

                                                                    December 31,         December 31,
                                                                       2004                 2003
                                                                       ----                 ----
             ASSETS
             ------   
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
                                                                   -----------          -----------
        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
                                                                   -----------          -----------
          TOTAL ASSETS                                             $ 1,246,279          $ 1,262,034
                                                                   ===========          ===========
          LIABILITIES AND SHAREHOLDERS' EQUITY
          ------------------------------------

CURRENT LIABILITIES:
  Accounts payable                                                      13,135               13,136
  Amounts payable to related parties                                    20,274               18,680
  Deferred revenues                                                     14,258               12,215
  Income taxes payable                                                   5,211                7,949
  Accrued expenses and other liabilities                                28,463               32,082
                                                                   -----------          -----------
        Total Current Liabilities                                       81,341               84,062
LONG-TERM DEBT                                                         359,439              300,366
DEFERRED INCOME TAXES                                                   12,541               32,713
OTHER LIABILITIES                                                        8,465                8,943
                                                                   -----------          -----------
          TOTAL LIABILITIES                                            461,786              426,084
                                                                   -----------          -----------
COMMITMENT AND CONTINGENCIES
SHAREHOLDERS' EQUITY
  Preferred stock: authorized 10,000,000 shares, none outstanding         -                    -
  Common stock, $.01 par value: authorized,  254,832,450 shares;
    issued and outstanding, 94,353,675 (2004) and 99,056,659 (2003)        944                  991
  Class B stock, $.01 par value: authorized,  3,000,000 shares:
    issued and outstanding, 291,796 (2004) and 703,466 (2003)                3                    7
  Additional paid-in capital                                           369,036              517,132
  Accumulated earnings                                                 414,510              319,020
                                                                   -----------         ------------
                                                                       784,493              837,150
  Less treasury stock, at cost;  0 (2004) and 35,000 (2003) shares        -                  (1,200)
                                                                   -----------         ------------
          TOTAL SHAREHOLDERS' EQUITY                                   784,493              835,950
                                                                   -----------         ------------
          TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY               $ 1,246,279          $ 1,262,034
                                                                   ===========          ===========


          See accompanying notes to consolidated financial statements.
                                      F - 3

                              

                               WESTWOOD ONE, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)


                                                                                       
                    
                                                                       Year Ended December 31,
                                                              ---------------------------------------
                                                                 2004           2003           2002
                                                                 ----           ----           ----
REVENUES                                                      $ 562,246      $ 539,226      $ 550,751
                                                              ---------      ---------      ---------
Operating Costs (includes related party expenses
  of $84,338, $80,659, and $77,566, respectively)               369,634        350,582        352,385
Depreciation and Amortization (includes related
  party warrant amortization of $7,618, $1,352 and
  $1,352, respectively)                                          18,429         11,513         11,464
Corporate General and Administrative Expenses
  (includes related party expenses of $2,959, $2,793
  and $5,012 respectively)                                        8,606          7,106          8,005
                                                              ---------      ---------      ---------
                                                                396,669        369,201        371,854
                                                              ---------      ---------      ---------
OPERATING INCOME                                                165,577        170,025        178,897
Interest Expense                                                 11,911         10,132          6,955
Other (Income) Expense                                             (948)           (52)          (110)
                                                              ---------      ---------      ---------
INCOME BEFORE TAXES                                             154,614        159,945        172,052
INCOME TAXES                                                     59,124         59,906         62,937
                                                              ---------      ---------      ---------
NET INCOME                                                     $ 95,490      $ 100,039      $ 109,115
                                                              =========      =========      =========
INCOME PER SHARE:
   Basic                                                         $ 0.98         $ 0.99         $ 1.03
   Diluted                                                       $ 0.97         $ 0.97         $ 1.00

WEIGHTED AVERAGE SHARES OUTSTANDING:
   Basic                                                         97,117        101,243        105,992
   Diluted                                                       98,454        103,625        109,101




          See accompanying notes to consolidated financial statements.
                                      F - 4


                                WESTWOOD ONE, INC
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                 (In thousands)


                                                                                            
                                                                                                                
                                       Common Stock       Class B Stock     Additional                 Treasury Stock     Total
                                     ---------------     ---------------      Paid-in     Retained     --------------  Shareholders'
                                     Shares    Amount    Shares    Amount     Capital     Earnings    Shares   Amount     Equity
                                     ----------------    ------    ------    --------     --------    ------   ------     ------
BALANCE AT DECEMBER 31, 2002         103,989  $ 1,040     704      $ 7     $ 684,311    $ 218,981      (35)  $ (1,299)   $ 903,040
 Net income for 2003                    -         -        -         -          -         100,039       -         -        100,039

 Issuance of common stock under
   stock option plans                    602        6      -         -        13,277         -          -         -         13,283
 Purchase of treasury stock             -         -        -         -          -            -      (5,534)  (180,412)    (180,412)
 Retirement of treasury stock         (5,534)     (55)     -         -      (180,456)        -       5,534    180,511          -
                                      ------    -----     ---      ---     ---------    ---------   ------   --------     --------

BALANCE AT DECEMBER 31, 2003          99,057    $ 991     704      $ 7     $ 517,132    $ 319,020      (35)  $ (1,200)   $ 835,950
 Net income for 2004                    -         -        -         -          -          95,490       -         -         95,490
 Issuance of common stock under
   stock option plans                  3,788       38    (412)      (4)       69,522         -          -         -         69,556
 Purchase of treasury stock             -         -        -         -          -            -      (8,456)  (216,503)    (216,503)
 Retirement of treasury stock         (8,491)     (85)     -         -      (217,618)        -       8,491    217,703          -
                                     -------   ------    ----    -----     ---------    ---------   ------    -------    ---------
                                     

BALANCE AT DECEMBER 31, 2004          94,354    $ 944     292      $ 3     $ 369,036    $ 414,510       -       $ -      $ 784,493
                                     =======   =======   ====    =====     =========    =========   =======   ========   =========




          See accompanying notes to consolidated financial statements.
                                      F - 5


                         WESTWOOD ONE, INC.
               CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (In thousands)


                                                                                                 

                                                                                       December 31,
                                                                         ---------------------------------------

                                                                           2004           2003           2002
                                                                           ----           ----           ----
CASH FLOW FROM OPERATING ACTIVITIES:

  Net income                                                              $ 95,490      $ 100,039      $ 109,115
  Adjustments to reconcile net income to net cash provided by
     operating activities:
           Depreciation and amortization                                    18,429         11,513         11,464
           Deferred taxes                                                      642          5,331          6,355
           Non-cash stock compensation                                         391              -              -
           Amortization of deferred financing costs                            709            635            562
                                                                          --------      ---------      ---------
                                                                           115,661        117,518        127,496
        Changes in assets and liabilities:
           Accounts receivable                                              (7,082)        (4,044)        (7,943)
           Prepaid and other assets                                          1,929         (1,186)          (839)
           Deferred revenue                                                  2,043           (525)          (968)
           Income taxes payable                                             17,324          2,822         45,098
           Accounts payable and accrued expenses
             and other liabilities                                          (3,495)        (8,348)        (5,958)
           Amounts payable to related parties                                1,594          1,633         (9,268)
                                                                           -------      ---------      ---------
             Net Cash Provided By Operating Activities                     127,974        107,870        147,618
                                                                           -------      ---------      ---------
CASH FLOW FROM INVESTING ACTIVITIES:
           Capital expenditures                                             (5,920)        (4,370)        (4,252)
           Acquisition of companies and other                                    6           (602)          (808)
                                                                           -------      ---------      ---------
             Net Cash Used in Investing Activities                          (5,914)        (4,972)        (5,060)
                                                                           -------      ---------      ---------
                                                                                     
CASH FLOW FROM FINANCING ACTIVITIES:
           Issuance of common stock                                         38,595          9,372         30,186
           Borrowings under bank and other long-term obligations           195,000         70,000        200,000
           Debt repayments and payments of capital lease obligations      (135,602)          (564)      (129,883)
           Repurchase of common stock                                     (216,503)      (180,412)      (188,337)
           Repurchase of warrants from related party                             -              -        (51,070)
           Deferred financing costs                                         (1,283)             -           (592)
                                                                          --------      ---------      ---------
             Net Cash Used in Financing Activities                        (119,793)      (101,604)      (139,696)
                                                                          --------      ---------      ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                    2,267          1,294          2,862

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                             8,665          7,371          4,509
                                                                          --------      ---------      ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                $ 10,932        $ 8,665        $ 7,371
                                                                          ========      =========      =========




          See accompanying notes to consolidated financial statements.
                                      F - 6


                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)

NOTE 1 - Summary of Significant Accounting Policies:

Nature of Business
Westwood  One,  Inc.  and  subsidiaries  (the  "Company")   supplies  radio  and
television  station affiliates with a broad range of programming and information
services.  The Company is the  largest  domestic  outsource  provider of traffic
reporting  services  and the  nation's  largest  radio  network,  producing  and
distributing  national news, sports, talk, music and special event programs,  in
addition  to local  news,  sports,  weather,  video  news and other  information
programming.

Westwood One is managed by Infinity  Broadcasting  Corporation  ("Infinity"),  a
wholly-owned  subsidiary  of Viacom  Inc,  pursuant  to a  management  agreement
between  the  Company  and  Infinity  which  expires  on  March  31,  2009  (the
"Agreement" or "Management Agreement").

Principles of Consolidation
The consolidated  financial  statements include the accounts of all majority and
wholly-owned subsidiaries.

Revenue Recognition
Revenue is recognized when earned which is at the time commercial advertisements
are broadcast.  Payments  received in advance are deferred until earned and such
amounts  are  included as a component  of Deferred  Revenue in the  accompanying
Balance Sheet.

Barter  transactions  represent  the exchange of  commercial  announcements  for
merchandise  or  services.  These  transactions  are recorded at the fair market
value of the  commercial  announcements  relinquished,  or the fair value of the
merchandise and services received.  Revenue is recognized on barter transactions
when  the  advertisements   are  broadcast.   Expenses  are  recorded  when  the
merchandise  or service is  utilized.  Barter  revenue of  $22,083,  $22,441 and
$19,595 has been  recognized  for the years ended  December 31,  2004,  2003 and
2002, respectively and barter expenses of $20,808, $20,885 and $18,886 have been
recognized for the years ended December 31, 2004, 2003 and 2002, respectively.

Program Rights
Program rights are stated at the lower of cost, less  accumulated  amortization,
or net realizable value. Program rights and the related liabilities are recorded
when the license  period  begins and the program is  available  for use, and are
charged to expense when the event is broadcast.

Use of Estimates
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue and expenses as well
as the disclosure of contingent assets and liabilities.  Management  continually
evaluates its estimates and judgments  including those related to allowances for
doubtful accounts,  useful lives of property, plant and equipment and intangible
assets, income taxes and other contingencies. Management bases its estimates and
judgments on  historical  experience  and other  factors that are believed to be
reasonable in the circumstances.  Actual results may differ from those estimates
under different assumptions or conditions.

Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity of
less than  three  months to be cash  equivalents.  The  carrying  amount of cash
equivalents  approximates  fair  value  because of the short  maturity  of these
instruments.

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. Derivative contracts are
entered into with major creditworthy institutions to minimize the risk of credit
loss and are structured to be 100% effective.

                                      F-7

                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)

Depreciation
Depreciation  is computed  using the  straight  line  method over the  estimated
useful lives of the assets, as follows:

      Buildings and improvements                   40 years 
      Recording, broadcasting and studio equipment 5 - 10 years 
      Furniture, and equipment and other           3 - 10 years

Goodwill and Intangible Assets
Effective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards  No.  141,  "Business  Combinations"  ("SFAS  141") and  Statement  of
Financial  Accounting  Standards  No.  142  ("SFAS  142")  "Goodwill  and  Other
Intangible  Assets".  The  Statements  require all business  combinations  to be
accounted  for under the  purchase  method and  prohibits  the  amortization  of
goodwill and  indefinite-lived  intangible  assets,  requires  that goodwill and
indefinite-lived  intangible  assets be tested  annually for impairment  (and in
interim  periods if events occur  indicating that the carrying value of goodwill
and/or  indefinite-lived  intangible  assets  may be  impaired),  requires  that
reporting  units be  identified  for the purpose of assessing  potential  future
impairments  of  goodwill,   and  removes  the  forty-year   limitation  on  the
amortization period of intangible assets that have finite lives.

Goodwill  represents  the  excess  of cost  over  fair  value of net  assets  of
businesses acquired. In accordance with SFAS 142, the value assigned to goodwill
and indefinite lived intangible  assets is not amortized to expense,  but rather
the fair value of the  reporting  unit is compared to its carrying  amount on an
annual basis to determine if there is a potential impairment.  If the fair value
of the reporting  unit is less than its carrying  value,  an impairment  loss is
recorded to the extent that the fair value of the goodwill and intangible assets
is less than their carrying  value,  determined  based on discounted cash flows,
market multiples or appraised values as appropriate.  The Company has determined
that there was no  impairment  of goodwill or  intangible  assets as a result of
completing impairment reviews.

Intangible  assets  subject to  amortization  primarily  consist of  affiliation
agreements  that were acquired in prior years.  Such affiliate  contracts,  when
aggregated,  create a nationwide audience that is sold to national  advertisers.
The  intangible  asset  values  assigned to the  affiliate  agreements  for each
acquisition  were determined based upon the expected  discounted  aggregate cash
flows to be derived over the life of the affiliate  relationship.  The method of
amortizing  the  intangible  asset  values  reflects,  based upon the  Company's
historical  experience,  an accelerated  rate of attrition in the affiliate base
over the expected life of the affiliate relationships.  Accordingly, the Company
amortizes the value  assigned to affiliate  agreements on an  accelerated  basis
(periods ranging from 4 to 20 years with a weighted-average  amortization period
of  approximately  8 years)  consistent with the pattern of cash flows which are
expected to be derived.

Stock-Based Compensation
Statement of Financial  Accounting  Standards No. 123 ("SFAS 123"),  "Accounting
for Stock-Based  Compensation,"  encourages,  but does not require, companies to
record  compensation cost for stock-based  employee  compensation  plans at fair
value.   The  Company  has  chosen  to  continue  to  account  for   stock-based
compensation   using  the  intrinsic  value  method   prescribed  in  Accounting
Principles  Board  Opinion No. 25 ("APB 25"),  "Accounting  for Stock  Issued to
Employees," and related Interpretations.

No compensation  expense has been recognized for stock option grants as all such
grants had an exercise  price not less than the fair market value on the date of
grant,  except for a non-cash stock compensation  charge recorded of $391,000 in
connection  with the  modification  of the  terms of  previously  granted  stock
options  coinciding  with the change in status of an employee to an  independent
contractor.  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 to the pro forma amounts indicated below:

                                      F-8

                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)



                                                                          

                                                          2004         2003         2002
                                                          ----         ----         ----
    Net Income as Reported                               $95,490     $100,039     $109,115
    Deduct:  Total stock based
     compensation expense determined under fair-
     value based method,  net of tax                       9,588        8,809        8,444
                                                         -------     --------     --------
    Pro Forma Net Income                                 $85,902      $91,230     $100,671
                                                         =======      =======     ========
    Net Income Per Share:
     Basic - As Reported                                    $.98         $.99        $1.03
                                                            ====         ====        =====
     Basic - Pro Forma                                      $.88         $.90         $.95
                                                            ====         ====         ====

     Diluted - As Reported                                  $.97         $.97        $1.00
                                                            ====         ====        =====
     Diluted - Pro Forma                                    $.87         $.88         $.92
                                                            ====         ====         ====


Income Taxes
The Company  uses the asset and  liability  method of financial  accounting  and
reporting  for income  taxes  required  by  Statement  of  Financial  Accounting
Standards No. 109 ("SFAS 109"),  "Accounting for Income Taxes".  Under SFAS 109,
deferred  income taxes reflect the tax impact of temporary  differences  between
the amount of assets and liabilities recognized for financial reporting purposes
and the amounts recognized for tax purposes.

Earnings per Share
Basic  earnings per share  excludes all  dilution  and is  calculated  using the
weighted  average  number of common shares  outstanding  in the period.  Diluted
earnings per share amounts are based upon the weighted  average number of common
and common  equivalent  shares  outstanding  during the year.  Common equivalent
shares are related to warrants and stock options. The following number of common
equivalent  shares were added to the basic weighted  average shares  outstanding
for each period:

                         2004            2003                2002
                         ----            ----                ----
      Options         1,337,000        2,382,000           2,967,000
      Warrants            -                -                 142,000

Common   equivalent   shares  are   excluded   in  periods  in  which  they  are
anti-dilutive.  The  following  options were excluded  from the  calculation  of
diluted  earnings  per share  because the  exercise  price was greater  than the
average market price of the Company's Common Stock for the years presented:

                         2004            2003                 2002
                         ----            ----                 ----
      Options         3,779,700        1,904,382              390,000

The per share  exercise  prices of the options  excluded were  $26.96-$38.34  in
2004,  $32.90-38.34 in 2003, and  $37.00-$38.34  in 2002. Also excluded from the
weighted average share computation were 4,500,000 warrants issued in May 2002 in
conjunction with extending the terms of the Company's  management agreement with
a related party. See Note 2 for a further discussion of the warrant terms.

Recent Accounting Pronouncements

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment" ("SFAS 123R"), which replaces SFAS No. 123, "Accounting for Stock-Based
Compensation,"  ("SFAS 123") and supercedes APB Opinion No. 25,  "Accounting for
Stock  Issued to  Employees."  SFAS 123R  requires all  share-based  payments to
employees,  including grants of employee stock options,  to be recognized in the
financial statements based on their fair values beginning with the first interim
or annual period after June 15, 2005,  with early adoption  encouraged.  The pro
forma  disclosures  previously  permitted  under  SFAS 123 no longer  will be an
alternative to financial statement recognition. The Company is required to adopt
SFAS 123R in the second  quarter of fiscal  2005.  Under SFAS 123R,  the Company
must  determine  the  appropriate  fair  value  model  to be  used  for  valuing
share-based  payments,  the amortization  method for  compensation  cost and the
transition method to be used at date of adoption. The transition methods include
prospective  and retroactive  adoption  options.  Under the retroactive  option,

                                      F-9

prior periods may be restated either as of the beginning of the year of adoption
or for all periods presented.  The prospective method requires that compensation
expense be recorded for all unvested stock options and  restricted  stock at the
beginning of the first quarter of adoption of SFAS 123R,  while the  retroactive
methods  would record  compensation  expense for all unvested  stock options and
restricted  stock  beginning  with the first  period  restated.  The  Company is
evaluating the  requirements  of SFAS 123R and expects that the adoption of SFAS
123R will  have a  material  impact on the  Company's  consolidated  results  of
operations and earnings per share. The Company has not yet determined the method
of adoption or the effect of adopting  SFAS 123R.  The Company  believes the pro
forma  disclosures  in Note 1,  "Significant  Accounting  Policies," on page F-8
under "Stock-Based  Compensation" provide an appropriate short-term indicator of
the level of expense that will be recognized  in accordance  with SFAS No. 123R.
However,  the total  expense  recorded in future  periods will depend on several
variables,  including the number of  shared-based  awards that vest and the fair
value of those vested awards.

In October 2004, the American Jobs Creation Act of 2004 (the "AJCA") was passed.
The AJCA  provides a deduction  for income from  qualified  domestic  production
activities  which will be phased in from 2005 through 2010. In return,  the AJCA
also provides for a two-year phase-out of the existing  extra-territorial income
exclusion   for  foreign  sales  that  was  viewed  to  be   inconsistent   with
international  trade protocols by the European Union. In December 2004, the FASB
issued FASB Staff  Position  ("FSP") No. 109-1,  "Application  of FASB Statement
No.109,  Accounting  for  Income  Taxes,  to  the  Tax  Deduction  on  Qualified
Production  Activities  by the  American  Jobs  Creation Act of 2004." FSP 109-1
treats the  deduction as a "special  deduction"  as described in FAS No. 109. As
such, the special deduction has no effect on deferred tax assets and liabilities
existing at the enactment  date.  Rather,  the impact of this  deduction will be
reported in the same period in which the deduction is claimed in the tax return.
We are  currently  evaluating  the impact  the AJCA will have on our  results of
operations and financial position.

The AJCA also creates a temporary incentive for U.S.  corporations to repatriate
accumulated  income  earned  abroad  by  providing  an  85%  dividends  received
deduction for certain  dividends  from  controlled  foreign  corporations.  This
aspect of the AJCA legislation will not have an impact on the Company's  results
of  operations  and  financial  position  as the Company  does not have  foreign
operations.

In December  2004,  the FASB  issued  SFAS  No.153,  "Exchanges  of  Nonmonetary
Assets--an  Amendment of APB No. 29" (SFAS 153). The amendments made by SFAS 153
are based on the  principle  that  exchanges  of  nonmonetary  assets  should be
measured  based  on  the  fair  value  of the  assets  exchanged.  Further,  the
amendments  eliminate the narrow exception for nonmonetary  exchanges of similar
productive  assets and  replace it with a broader  exception  for  exchanges  of
nonmonetary  assets that do not have  "commercial  substance."  This standard is
effective for  nonmonetary  asset  exchanges  occurring  after July 1, 2005. The
adoption of this standard is not expected to impact the  Company's  Consolidated
Financial Statements.

Reclassification
Certain amounts reported in prior years have been reclassified to conform to the
current year presentation.

NOTE 2 - Related Party Transactions:

In return for receiving  services  under the Management  Agreement,  the Company
compensates   Infinity  via  an  annual  base  fee  and  provides  Infinity  the
opportunity  to earn an incentive  bonus if the Company  exceeds  pre-determined
targeted  cash  flows.  For the year ended  December  31,  2004,  2003 and 2002,
Infinity earned cash  compensation of $2,959,  $2,793 and $5,012,  respectively,
pursuant to this Management Agreement.

In addition to the base fee and  incentive  compensation  described  above,  the
Company  granted to Infinity  two fully vested and  non-forfeitable  warrants to
purchase  4,000,000  shares  of the  Company's  Common  Stock  in the  aggregate
(comprised of one warrant to purchase  2,000,000  shares at an exercise price of
$10.00 per share and another warrant to purchase 2,000,000 shares at an exercise
price  of  $12.50  per  share)  in  connection  with  extending  the term of the
Management  Agreement  in  March  1999  for an  additional  term of  five  years
commencing  April 1, 1999. Such warrants were only exercisable to the extent the
Company's  Common Stock reached certain market prices,  which have  subsequently
been achieved. In 2002 Infinity sold its $12.50 warrant,  representing 2,000,000
shares of Common Stock,  to the Company for cash  consideration  of $51,070.  In
2001, Infinity sold its $10.00 warrant,  representing 2,000,000 shares of Common
Stock, to the Company for cash  consideration of $41,350.  The repurchase of the
Infinity  warrants for cash  consideration  has been reflected as a reduction to
Additional Paid in Capital during 2002 and 2001.

                                      F-10

                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)

On May 29,  2002,  the  Company's  shareholders  ratified  an  extension  of the
Management  Agreement for an additional  five-year term which commences April 1,
2004 and expires on March 31, 2009. In return for receiving  services  under the
Management  Agreement,  the Company will continue to compensate  Infinity via an
annual base fee and an  opportunity to earn an annual  incentive  bonus provided
certain  performance  objectives are met.  Additionally,  the Company granted to
Infinity seven fully vested and  non-forfeitable  warrants to purchase 4,500,000
shares of the Company's Common Stock in the aggregate (comprised of two warrants
to purchase  1,000,000  Common  shares per warrant and five warrants to purchase
500,000  Common shares per warrant) to purchase  Company  Common  Stock.  Of the
seven warrants issued, the two one million share warrants have an exercise price
of $43.11 and $48.36, respectively,  and become exercisable if the average price
of  the   Company's   Common  Stock  reaches  a  price  of  $64.67  and  $77.38,
respectively,  for at least 20 out of 30 consecutive trading days for any period
throughout the ten year term of the warrants.

The exercise prices for the five remaining warrants is equal to $38.87,  $44.70,
$51.40, $59.11 and $67.98,  respectively.  These warrants each have a term of 10
years, commencing on the date they become exercisable, and become exercisable on
January 2, 2005, 2006, 2007, 2008, and 2009, respectively,  subject to a trading
price condition. The trading price condition specifies that the average price of
the Company's Common Stock for each of the 15 trading days prior to January 2 of
the  applicable  year  (commencing  on January 2, 2005 with respect to the first
500,000  warrant tranche and each January 2 thereafter for each of the remaining
four  warrants) must be at least equal to both the exercise price of the warrant
and 120% of the corresponding  prior year 15 day trading average. In the case of
the $38.87 warrants,  the Company's  average stock price for the 15 trading days
prior to January 2, 2005 must equal or exceed  $40.56 for the warrants to become
exercisable. The Company's stock price did not equal or exceed $40.56 for the 15
trading days prior to January 2, 2005 and therefore, the warrants did not become
exercisable.

In connection  with the May 2002 issuance of warrants to Infinity for management
services to be provided  to the  Company in the future,  the Company  originally
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. At December 31, 2003, the unamortized  value of the
May 2002  warrants was  $48,350,  of which $7,200 was included as a component of
Prepaid and Other  current  assets and $41,330  was  included as a component  of
Other Assets in the accompanying  consolidated  balance sheet. Upon commencement
of the term of the service period to which the warrants  relate (April 1, 2004),
the Company  commenced  amortizing the cost of the warrants  issued ratably over
the five-year service period. At December 31, 2004, the unamortized value of the
May 2002  warrants was  $41,250,  of which $9,706 was included as a component of
Prepaid and Other assets and $31,544 was included as a component of Other Assets
in the accompanying consolidated balance sheet.

In addition to the Management Agreement described above, the Company also enters
into other  transactions  with Infinity 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
with an affiliate of Infinity - the  "Representation  Agreement") to operate the
CBS  Radio  Networks,  affiliation  agreements  with  many of  Infinity's  radio
stations and the purchase of programming  rights from Infinity and affiliates of
Infinity.  The Management  Agreement provides that all transactions,  other than
the Management  Agreement and Representation  Agreement to operate the CBS Radio
Networks which were ratified by the Company's shareholders,  between the Company
and Infinity or its affiliates  must be on a basis that is at least as favorable
to the Company as if the  transactions  were  entered  into with an  independent
third  party.  In  addition,  subject to specified  exceptions,  all  agreements
between the Company and  Infinity or any of its  affiliates  must be approved by
the Company's Board of Directors.

The Company  incurred  the  following  expenses  relating to  transactions  with
Infinity or its affiliates for the following years:

   Nature
   ------
                                          2004           2003              2002
                                          ----           ----              ----

   Representation Agreement             $25,093        $24,575           $23,309
   Programming and Affiliations          59,245         56,084            54,257
   Management Agreement
    (excluding warrant amortization)      2,959          2,793             5,012
                                                                  
   Warrant Amortization                   7,618          1,352             1,352
                                         ------         ------            ------
                                        $94,915        $84,804           $83,930
                                        =======        =======           =======

Expenses incurred for the Representation Agreement and programming and affiliate
arrangements  are included as a component of Operating Costs in the accompanying
Consolidated  Statement of  Operations.  Expenses  incurred  for the  Management

                                      F-11

Agreement  (excluding  warrant  amortization)  and  amortization of the warrants
granted to Infinity under the  Management  Agreement are included as a component
of  Corporate   General  and   Administrative   expenses  and  Depreciation  and
Amortization,  respectively,  in  the  accompanying  Consolidated  Statement  of
Operations.

NOTE 3 - Property and Equipment:

Property and equipment is recorded at cost and is summarized as follows at:




                                                                                   
                                                                         December 31,
                                                                         ------------
                                                                     2004            2003
                                                                     ----            ----
    Land, buildings and improvements.....................          $14,208         $14,088
    Recording, broadcasting and studio equipment.........           68,405          64,234
    Furniture and equipment and other....................           12,105          15,567
                                                                   -------          ------
                                                                    94,718          93,889
    Less:  Accumulated depreciation and amortization.....           47,321          43,327
                                                                   -------          ------
            Property and equipment, net..................          $47,397         $50,562
                                                                   =======         ======= 

Depreciation expense was $9,085 in 2004, $7,898 in 2003, and $7,711 in 2002. The
Company  has  entered  into  one  capital  lease  totaling  $6,723.  Accumulated
amortization  related  to for the  capital  lease was  $2,241  and  $1,569 as of
December 31, 2004 and 2003, respectively.

NOTE 4 - Goodwill and Intangible Assets:

The changes in the carrying  amount of goodwill for the years ended December 31,
2004 and 2003 follows:


                                                                                   
                                                                  2004             2003
                                                                  ----             ----

    Balance at January 1,                                       $990,472          $990,192
    Goodwill acquired during the period                             -                  280
                                                                                             
    Pre-acquisition contingencies related to income taxes
      and other                                                   (8,503)              -
                                                                --------          --------

                                                                $981,969          $990,472
                                                                =========         ========

At December 31, 2004,  the gross value of the Company's  amortizable  intangible
assets was approximately $28,780 with accumulated  amortization of approximately
$22,603.  As of December 31, 2003, the gross value of the Company's  amortizable
intangible  assets was  approximately  $28,780 with accumulated  amortization of
approximately  $21,154.  Amortization expense was $1,449, $2,263 and $2,401, for
the year ended  December 31, 2004,  2003 and 2002,  respectively.  The Company's
estimated aggregate  amortization  expense for intangibles for fiscal year 2005,
2006, 2007, 2008 and 2009 are $1,169, $783, $783, $783 and $783, respectively.

NOTE 5 - Debt:

Long-term debt consists of the following at:


                                                                      

                                                                     December 31,
                                                               ----------------------
                                                                  2004          2003
                                                                  ----          ----
     Revolving Credit Facility/Term Loan........               $160,000      $100,000
     4.64% Senior Unsecured Notes
      due on November 30, 2009..................                 50,000        50,000
     5.26% Senior Unsecured Notes
      due on November 30, 2012..................                150,000       150,000
     Fair market value of Swap..................                   (561)          366
                                                               --------      --------
                                                               $359,439      $300,366
                                                               ========      ========

On March 3, 2004, the Company refinanced its existing senior loan agreement with
a syndicate  of banks led by JP Morgan  Chase Bank and Bank of America.  The new
facility is  comprised  of a five-year  $120,000  term and a five-year  $180,000

                                      F-12

                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)

revolving credit facility (collectively the "New Facility").  In connection with
the closing of the  facility,  the Company  borrowed the full amount of the term
loan, the proceeds of which were used to repay the outstanding  borrowings under
the existing Facility. Interest on the New Facility is payable at the prime rate
plus an applicable margin of up to .25% or LIBOR plus an applicable margin of up
to 1.25%, at the Company's option.  The New Facility contains covenants relating
to dividends, liens, indebtedness capital expenditures and interest coverage and
leverage ratios.

At  December  31,  2004,  the  Company had  available  borrowings  under the New
Facility of $140,000.  As of December 31, 2004, the applicable  margin was LIBOR
plus  .625%.  Additionally,  at December  31,  2004,  the  Company had  borrowed
$160,000  under the New  Facility at a  weighted-average  interest  rate of 2.2%
(including  the  applicable  margin).  As of December 31, 2003,  the Company had
borrowed   $100,000  under  the  previous   revolving   credit   facility  at  a
weighted-average interest rate of 1.8% (including applicable margin).

On December 3, 2002, the Company issued,  through a private placement,  $150,000
of  ten-year  Senior  Unsecured  Notes  due  November  30,  2012 and $ 50,000 of
seven-year  Senior  Unsecured  Notes due  November  30, 2009  (collectively  the
"Notes").  Interest on the Notes is payable  semi-annually  in May and November.
The Notes,  which are unsecured,  contain covenants relating to indebtedness and
interest  coverage ratios that are identical to those contained in the Company's
New  Facility.  The Notes may be  prepaid  at the  option  of the  Company  upon
providing proper notice and by paying  principal,  interest and an early payment
penalty.

The  aggregate  maturities  of debt  for the next  five  years  and  thereafter,
pursuant to the Company's debt agreements as in effect at December 31, 2004, are
as follows (excludes market value adjustments):
                           
         Year
         ----
         2005......................      $   -
         2006......................          -
         2007......................          -
         2008......................          -
         2009......................       210,000
         2010 and thereafter.....         150,000
                                         --------
                                         $360,000

NOTE 6 - Financial Instruments:

Interest  Rate Risk  Management  In order to  achieve a  desired  proportion  of
variable  and fixed  rate  debt,  the  Company  entered  into  fixed-to-floating
interest rate swap agreements  covering  one-half of the notional amounts of the
Notes.  These swap  transactions  allow the Company to benefit  from  short-term
declines in interest  rates while having the  long-term  stability of fairly low
fixed 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 hedged
instrument,  the hedge 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 hedge risk.

At December 31, 2004, the Company had the following interest rate swaps:


                                                                                      
                                                                      Interest Rate
                                                                 ----------------------
Maturity Dates                  Notional Principal Amount        Paid (1)       Received       Variable Rate Index
--------------                  -------------------------        --------       --------       -------------------
November 2009                            $25,000                   2.4%          3.907%           3 Month LIBOR
November 2012                            $25,000                   2.4%          4.410%           3 Month LIBOR
November 2012                            $50,000                   2.4%          4.535%           3 Month LIBOR


(1) The interest rate paid at December 31, 2003 was 1.173%.

The estimated  fair value of the  Company's  interest rate swaps at December 31,
2004 and 2003 were ($561) and $366, respectively.

                                      F-13

                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)

Fair Value of Financial Instruments 
The  Company's   financial   instruments   included  cash,   cash   equivalents,
receivables,  accounts  payable,  borrowings  and interest  rate  contracts.  At
December  31,  2003 and  2002,  the fair  values  of cash and cash  equivalents,
receivables  and accounts  payable  approximated  carrying values because of the
short-term  nature of these  instruments.  The  estimated  fair  values of other
financial  instruments  subject to fair value  disclosures,  determined based on
broker quotes or quoted market prices or rates for the same or similar
instruments, and the related carrying amounts are as follows:



                                                                                      
                                                 December 31, 2004                 December 31, 2003
                                                 -----------------                 -----------------
                                               Carrying        Fair               Carrying      Fair
                                                Amount        Value                Amount      Value
                                                ------        -----                ------      -----
Borrowings (Short and Long Term)              $ 360,000    $ 358,878             $ 300,000    $300,732
Risk management contracts:
  Interest rate swaps                              (561)        (561)                  366         366


Credit Concentrations
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 at December 31, 2004,  due to the wide variety of customers  and markets in
which the Company operates.

NOTE 7 - Shareholders' Equity:

The authorized  capital stock of the Company  consists of Common Stock,  Class B
Stock and Preferred Stock.  Common Stock is entitled to one vote per share while
Class B Stock is entitled to 50 votes per share. Class B Stock is convertible to
Common Stock on a share-for-share basis.

As further discussed in Note 2, in conjunction with the renewal and extension of
the  Company's  Management  Agreement  with  Infinity  in May 2002,  the Company
granted to Infinity fully vested and  nonforfeitable  warrants to purchase up to
4,500,000  shares of Company  Common  Stock.  The Company has reflected the fair
value of the  warrants  issued of $48,530 as a component of  additional  paid in
capital.

During  2002,  Infinity  sold their  $12.50  warrants  to the  Company  for cash
consideration of $51,070.  The purchase of the warrants  resulted in a reduction
to additional  paid in capital equal to the amount of cash  consideration  paid.
The  aforementioned  warrants  were granted to Infinity in  connection  with the
extension of the Management Agreement in March 1999 (see Note 2).

The Company's  Board of Directors has approved  plans to purchase  shares of the
Company's  Common  Stock to enhance  shareholder  value.  The Company  purchased
8,456,000 shares in 2004 for  approximately  $216,503,  5,534,000 shares in 2003
for  approximately  $180,412,  and  5,414,000  shares in 2002 for  approximately
$188,337.

On September 27, 2004 a shareholder  converted  411,670  shares of Class B Stock
into an equal number of shares of Common Stock.

NOTE 8 - Stock Options:

The Company  established stock option plans in 1989 and 1999  (collectively "the
Plan") which provide for the granting of options to directors,  officers and key
employees  to  purchase  stock at its market  value on the date the  options are
granted.  Under the 1989 Plan, 12,600,000 shares were reserved for grant through
March 1999. This plan expired, but certain previous grants remain outstanding at
December  31,  2004.  On  September  22,  1999,  the  stockholders  ratified the
Company's  1999  stock  incentive  plan  which  authorized  the  grant  of up to
8,000,000 shares of Common Stock.  Options granted generally become  exercisable
after one year in 20%  increments  per year and expire within ten years from the
date of grant.

                                      F-14

                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)

The weighted average fair value of the options granted in 2004, 2003 and 2002 is
estimated  at $6.77,  $10.09 and $11.46,  respectively,  measured on the date of
grant using the Black-Scholes  option pricing model with the following  weighted
average assumptions:  
                                                       2004    2003    2002 
                                                       ----    ----    ---- 
        Risk Free Interest Rate...............          3.5%    3.3%    3.4%  
        Expected  Life (In  Years)............          5       5       5 
        Expected Volatility...................         28.3%   29.6%   29.0% 
        Expected Dividend Yield...............           -       -       -

Information concerning options outstanding under the Plan is as follows for:


                                                                                                   
                                                       2004                            2003                 2002
                                                       ----                            ----                 ----
                                                                                                     
                                                                Weighted                   Weighted                   Weighted
                                                                 Average                    Average                   Average
                                                                Exercise                   Exercise                   Exercise
                                               Shares            Price         Shares        Price        Shares       Price
                                               ------            -----         ------        -----        ------       -----
Outstanding at beginning
  of period...........................       10,319,549          $21.27       9,442,330       $19.40    11,089,934     $16.01
Granted during the period.............        1,472,000          $21.38       1,568,500       $31.32     1,272,500     $35.79
Exercised during the period...........       (3,376,786)         $11.43        (602,381)      $15.56    (2,505,674)    $12.21
Forfeited during the period...........         (418,745)         $31.19         (88,900)      $36.79      (414,430)    $23.43
                                             ----------                       ---------                 ----------
Outstanding at end of period..........        7,996,018          $24.90      10,319,549       $21.27     9,442,330     $19.40
                                             ==========                      ==========                 =========-
Available for stock option issuance
  at end of period....................          600,345                       1,653,600                  3,133,200
                                             ==========                       =========                 ==========

                                                                   
At December 31, 2004,  options to purchase 4,089,918 shares of Common Stock were
currently exercisable at a weighted average exercise price of $22.57.

The following table contains  additional  information with respect to options at
December 31, 2004:


                                                                                              
                                                                                                      Remaining
                                                                                      Weighted        Weighted
                                                                                       Average         Average
                                                                        Number of     Exercise       Contractual
                                                                         Options        Price      Life (In Years)
                                                                         -------        -----      --------------
Options Outstanding at Exercise Price Ranges of:
    $5.34-$19.29......................................                 1,497,658       $11.89             3.2
    $20.25-26.96......................................                 2,818,660       $21.31             7.8
    $30.19-$38.34.....................................                 3,679,700       $32.94             7.3
                                                                       ---------
                                                                       7,996,018       $24.90             6.7
                                                                       =========

NOTE 9 - Income Taxes:

The components of the provision for income taxes follows:


                                                                           
                                                                                                     
                                                         Year Ended December 31,
                                                  ------------------------------------
        Current                                     2004         2003             2002
                                                    ----         ----             ----
         Federal.........................         $51,205       $49,138         $52,982
         State...........................           7,277         5,437           3,600
                                                  -------       -------         -------
                                                   58,482        54,575          56,582                                    
                                                  -------       -------         -------
        Deferred
         Federal.........................             483         4,842           5,705
         State...........................             159           489             650
                                                  -------       -------         -------
                                                      642         5,331           6,355
                                                  -------       -------         -------
        Income Tax.......................         $59,124       $59,906         $62,937
                                                  =======       =======         =======


                                      F-15

                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)


Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying amounts of assets and liabilities on the Company's  balance
sheet and the amounts used for income tax  purposes.  Significant  components of
the Company's deferred tax assets and liabilities follow:

                                                                December 31,
                                                         ----------------------
                                                          2004           2003
                                                          ----           ----
 Deferred tax liabilities:
  Goodwill, intangibles and other............            $9,174         $28,566
  Property and equipment.....................             7,758           4,783
  Other......................................               188             126
                                                        -------         -------
     Total deferred tax liabilities..........            17,120          33,475
                                                        -------         -------
 Deferred tax assets:
     Allowance for doubtful accounts.........               978           1,394
     Deferred Compensation...................             4,060           1,013
     Accrued expenses and other..............               519               0
                                                        -------         -------
     Total deferred tax assets...............             5,557           2,407
                                                        -------         -------
 Net deferred tax liabilities................            11,563          31,068
                                                        -------         -------
 Net deferred tax asset - current............               978           1,645
                                                        -------         -------
 Net deferred tax liability - long-term......           $12,541         $32,713
                                                        =======         =======

The  reconciliation  of the federal  statutory  income tax rate to the Company's
effective income tax rate follows:

                                                  Year Ended December 31,
                                                  -----------------------
                                                  2004     2003      2002
                                                  ----     ----      ----

         Federal statutory rate...............   35.0%    35.0%     35.0%
         State taxes net of federal benefit...    3.2      2.5       1.6
                                                 ----     ----      ----

         Effective tax rate...................   38.2%    37.5%     36.6%
                                                 =====    =====     =====

In 2004, 2003 and 2002, $18,182, $3,911 and $39,245 respectively,  of income tax
benefits  attributable to employee stock and warrant transactions were allocated
to shareholders' equity.

NOTE 10 - Commitments and Contingencies:

The Company has various  non-cancelable,  long-term  operating leases for office
space and  equipment.  In  addition,  the  Company is  committed  under  various
contractual  agreements to pay for talent,  broadcast rights,  research, the CBS
Representation  Agreement  and  the  Management  Agreement  with  Infinity.  The
approximate aggregate future minimum obligations under such operating leases and
contractual   agreements  for  the  five  years  after  December  31,  2004  and
thereafter, are set forth below:


                                                                                    

                                  Leases
                       -------------------------------
Year                   Capital               Operating             Other                       Total
----                   -------               ---------             -----                       -----
2005...........         $960                   $7,039              $61,534                   $ 69,533
2006...........          960                    6,724               58,772                     66,456
2007...........          960                    5,911               47,618                     54,489
2008...........          960                    5,158               44,746                     50,864
2009...........          960                    5,229               14,649                     20,838
Thereafter.....        1,600                    6,404               14,001                     22,005
                       -----                    -----               ------                     ------
                      $6,400                  $36,465             $241,320                   $284,185
                      ======                  =======             ========                   ========


The present value of net minimum  payments  under  capital  leases was $5,182 at
December 31, 2004.

Rent expense charged to operations for 2004,  2003, and 2002 was $8,485,  $8,597
and $9,193, respectively.

                                      F-16

                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)


Included in Other in the table above is  $162,955 of  commitments  due to Viacom
and its affiliates pursuant to various agreements as described in Note 2.

NOTE 11 - Supplemental Cash Flow and Other Information:

Supplemental information on cash flows, is summarized as follows:

                                                   Year Ended December 31,
                                              -------------------------------
                                                2004        2003         2002
                                                ----        ----         ----
Cash paid for:
   Interest.............................      $13,564     $12,047      $5,687
   Income taxes.........................       41,158      51,755       8,561

The Company had certain cash  investing and financing  activities.  During 2002,
the Company  issued  warrants to purchase up to  4,500,000  shares of its Common
Stock to Infinity with a value of $48,530.

Insurance Claim
The Company has insurance policies that cover business  interruption  related to
September 11, 2001 terrorist attacks.  For the year ended December 31, 2003, the
Company  recorded $3,200 as a reduction to operating  costs in the  accompanying
Consolidated Statements of Operations, reflecting the settlement of its business
interruption insurance claim.

NOTE 12 - Quarterly Results of Operations (unaudited):

The following is a tabulation of the unaudited  quarterly results of operations.
The quarterly  results are  presented for the years ended  December 31, 2004 and
2003.

(In thousands, except per share data)


                                                                                                
                                                          First      Second         Third      Fourth       For the
                                                         Quarter     Quarter       Quarter     Quarter       Year
                                                         -------     -------       -------     -------      -------
     2004
     ----
  Net revenues...................................        $129,608    $139,585     $141,422    $151,632      $562,246
  Operating income...............................          30,988      43,062       40,419      51,108       165,577
  Net income  ...................................          17,547      25,106       23,236      29,601        95,490
  Net income per share:
       Basic ....................................            $.18        $.26         $.24        $.31          $.98
       Diluted ..................................            $.18        $.26         $.24        $.31          $.97
                                                                                                                
     2003
     ----
  Net revenues...................................        $125,795    $132,675     $134,680    $146,076      $539,226
  Operating income...............................          29,219      41,664       46,782      52,360       170,025
  Net income  ...................................          16,914      24,336       27,710      31,079       100,039
  Net income  per share:
       Basic ....................................            $.16        $.24         $.28        $.31          $.99
       Diluted ..................................            $.16        $.23         $.27        $.31          $.97


                                      F-17

                               WESTWOOD ONE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
           (Dollars in thousands, except share and per share amounts)

                 Schedule II - Valuation and Qualifying Accounts
                 -----------------------------------------------

Allowance for Doubtful Accounts


                                                                                     
                                           Additions                       Deductions       
                              -------------------------------------     ----------------
               Balance at                                                                        Balance at
              Beginning of    Charged to Costs        Charged to          Write-offs and           End of
                 Period         And Expenses        Other Accounts      Other Adjustments          Period
              ------------    ----------------      --------------      -----------------        ----------

2004             $4,334             $874                  -                  ($2,642)              $2,566

2003             11,757            3,624                  -                  (11,047)               4,334

2002              9,282            6,379                  -                   (3,904)              11,757


                                      F-18