10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2007

Or

o 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: 1-1969

ARBITRON INC.

(Exact name of registrant as specified in its charter)

Delaware	52-0278528
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

142 West 57^th Street
New York, New York 10019-3000
(Address of principal executive offices) (Zip Code)
(212) 887-1300
(Registrant’s telephone number, including area code)

     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 þ      No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer þ      Accelerated Filer o      Non-Accelerated Filer o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o      No þ

     The registrant had 29,835,206 shares of common stock, par value $0.50 per share, outstanding as of July 30, 2007.

ARBITRON INC.

INDEX

	Page No.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets – June 30, 2007 and December 31, 2006		4
Consolidated Statements of Income – Three Months Ended June 30, 2007 and 2006		5
Consolidated Statements of Income – Six Months Ended June 30, 2007 and 2006		6
Consolidated Statements of Cash Flows – Six Months Ended June 30, 2007 and 2006		7
Notes to Consolidated Financial Statements – June 30, 2007		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		32
Item 4. Controls and Procedures		32
PART II – OTHER INFORMATION
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 4. Submission of Matters to a Vote of Security Holders		33
Item 5. Other Information		34
Item 6. Exhibits		34
Signature		35

2

          Arbitron owns or has the rights to various trademarks, trade names or service marks used in its radio audience measurement business and subsidiaries, including the following: the Arbitron name and logo, Arbitrends^SM, RetailDirect^®, RADAR^®, Tapscan^®, Tapscan WorldWi de^®, LocalMotion^®, Maximi$er^®, Maximi$er^® Plus, Arbitron PD Advantage^®, SmartPlus^®, Arbitron Portable People Meter^TM, Marketing Resources Plus^®, MRP^SM, PrintPlus^TM, MapMAKER Direct^SM, Media Professional^®, Media Professional Plus^SM, Qualitap^SM, MediaMaster^SM, Prospector^SM, and Schedule-It^SM.

          The trademarks Windows^®, Media Rating Council^® and Homescan^® are the registered trademarks of others.

3

PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

ARBITRON INC.
Consolidated Balance Sheets
(In thousands, except par value data)

	June 30,			December 31,
	2007			2006
	(unaudited)			(audited)
Assets
Current assets
Cash and cash equivalents	$	32,409		$	33,640
Short-term investments		38,850			27,625
Trade accounts receivable, net of allowance for doubtful accounts of $1,784 at June 30, 2007 and $1,419 at December 31, 2006		32,267			33,296
Inventory		2,265			3,793
Prepaid expenses and other current assets		5,270			4,167
Deferred tax assets		2,771			3,024
Total current assets		113,832			105,545
Investment in affiliates		13,908			13,907
Property and equipment, net of accumulated depreciation of $31,725 at June 30, 2007 and $29,120 at December 31, 2006		42,291			41,470
Goodwill, net		40,558			40,558
Other intangibles, net		1,570			2,029
Noncurrent deferred tax assets		5,934			5,913
Other noncurrent assets		766			898
Total assets	$	218,859		$	210,320
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	9,590		$	9,972
Accrued expenses and other current liabilities		17,542			33,258
Deferred revenue		66,495			66,875
Total current liabilities		93,627			110,105
Noncurrent liabilities		11,485			10,959
Total liabilities		105,112			121,064
Stockholders’ equity
Preferred stock, $100.00 par value, 750 shares authorized, no shares issued		—			—
Common stock, $0.50 par value, authorized 500,000 shares, issued 32,338 shares at June 30, 2007 and December 31, 2006		16,169			16,169
Additional paid-in capital		64,333			53,598
Accumulated earnings (net distributions to Ceridian in excess of accumulated earnings) prior to spin-off		(239,042	)		(239,042	)
Retained earnings subsequent to spin-off		280,153			266,905
Common stock held in treasury, 2,326 shares at June 30, 2007 and 2,646 shares on December 31, 2006		(1,163	)		(1,323	)
Accumulated other comprehensive loss		(6,703	)		(7,051	)
Total stockholders’ equity		113,747			89,256
Total liabilities and stockholders’ equity	$	218,859		$	210,320

See accompanying notes to consolidated financial statements.

4

ARBITRON INC.
Consolidated Statements of Income
(In thousands, except per share data)
(unaudited)

	Three Months Ended
	June 30,
	2007		2006
Revenue	$	79,047	$	74,165
Costs and expenses
Cost of revenue		46,468		36,684
Selling, general and administrative		20,461		20,557
Research and development		11,830		10,031
Total costs and expenses		78,759		67,272
Operating income		288		6,893
Equity in net income of affiliates		5,089		5,053
Income before interest and income tax expense		5,377		11,946
Interest income		670		829
Interest expense		96		937
Income before income tax expense		5,951		11,838
Income tax expense		2,163		4,478
Net income	$	3,788	$	7,360
Net income per weighted-average common share
Basic	$	0.13	$	0.25
Diluted	$	0.13	$	0.24
Dividends declared per common share	$	0.10	$	0.10
Weighted-average common shares used in calculations
Basic		29,955		29,945
Potentially dilutive securities		309		125
Diluted		30,264		30,070

See accompanying notes to consolidated financial statements.

5

ARBITRON INC.
Consolidated Statements of Income
(In thousands, except per share data)
(unaudited)

	Six Months Ended
	June 30,
	2007		2006
Revenue	$	170,824	$	159,253
Costs and expenses
Cost of revenue		78,718		60,939
Selling, general and administrative		40,818		40,013
Research and development		22,567		20,012
Total costs and expenses		142,103		120,964
Operating income		28,721		38,289
Equity in net income of affiliates		1,333		2,678
Income before interest and income tax expense		30,054		40,967
Interest income		1,251		1,816
Interest expense		191		1,880
Income before income tax expense		31,114		40,903
Income tax expense		11,831		15,357
Net income	$	19,283	$	25,546
Net income per weighted-average common share
Basic	$	0.65	$	0.84
Diluted	$	0.64	$	0.83
Dividends declared per common share	$	0.20	$	0.20
Weighted-average common shares used in calculations
Basic		29,852		30,500
Potentially dilutive securities		271		152
Diluted		30,123		30,652

See accompanying notes to consolidated financial statements.

6

ARBITRON INC.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)

	Six Months Ended
	June 30
	2007			2006
Cash flows from operating activities
Net income	$	19,283		$	25,546
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization of property and equipment		4,933			3,455
Amortization of intangible assets		459			902
Loss on asset disposals		191			177
Asset impairment charges		—			638
Deferred income taxes		18			663
Equity in net income of affiliates		(1,333	)		(2,678	)
Distributions from affiliates		4,500			3,950
Bad debt expense		505			470
Non-cash share-based compensation		3,473			3,775
Changes in operating assets and liabilities
Trade accounts receivable		448			(965	)
Prepaid expenses and other assets		(863	)		(131	)
Inventory		1,528			(4,074	)
Accounts payable		372			(966	)
Accrued expense and other current liabilities		(15,285	)		(7,269	)
Deferred revenue		542			1,884
Other noncurrent liabilities		976			740
Net cash provided by operating activities		19,747			26,117
Cash flows from investing activities
Additions to property and equipment		(10,314	)		(9,846	)
Investment in affiliates		(954	)		—
Purchases of short-term investments		(140,195	)		(276,565	)
Proceeds from sales of short-term investments		128,970			309,175
Net cash (used in) provided by investing activities		(22,493	)		22,764
Cash flows from financing activities
Proceeds from stock option exercises and stock purchase plan		11,118			5,396
Stock repurchases		(5,175	)		(68,529	)
Tax benefits realized from share-based awards		1,483			722
Dividends paid to stockholders		(5,994	)		(6,208	)
Net cash provided by (used in) financing activities		1,432			(68,619	)
Effect of exchange rate changes on cash and cash equivalents		83			197
Net decrease in cash and cash equivalents		(1,231	)		(19,541	)
Cash and cash equivalents at beginning of year		33,640			40,848
Cash and cash equivalents at end of year	$	32,409		$	21,307

See accompanying notes to consolidated financial statements.

7

ARBITRON INC.
Notes to Consolidated Financial Statements
June 30, 2007
(unaudited)

1. Basis of Presentation and Consolidation

Presentation

          The accompanying unaudited consolidated financial statements of Arbitron Inc. (the “Company” or “Arbitron”) have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included and are of a normal recurring nature. Certain amounts in the financial statements for prior periods have been reclassified to conform to the current period’s presentation. The consolidated balance sheet as of December 31, 2006 was audited at that date, but all of the information and footnotes as of December 31, 2006 required by U.S. generally accepted accounting principles have not been included in this Form 10-Q. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

Consolidation

          The consolidated financial statements of Arbitron reflect the consolidated financial position, results of operations and cash flows of Arbitron Inc. and its subsidiaries: Arbitron Holdings Inc., Audience Research Bureau S.A. de C.V., Ceridian Infotech (India) Private Limited, CSW Research Limited, Euro Fieldwork Limited, and Arbitron International, LLC. All significant intercompany balances have been eliminated in consolidation.

2. New Accounting Pronouncements

          In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation (“FIN”) 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), an interpretation of FASB Statement No. 109, Accounting for Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the financial statements. The Company adopted FIN 48, effective January 1, 2007. The impact of applying FIN 48 to the Company’s consolidated financial statements was immaterial. For further disclosure, see Note 12-Taxes.

          Effective December 31, 2006, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (“SFAS No. 158”). Arbitron currently measures plan assets and benefit obligations as of September 30 each year. In accordance with the provisions of SFAS No. 158, the measurement date will be required to be as of the date of the Company’s fiscal year-end statement of financial position effective for fiscal years ending after December 15, 2008.

          In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”), which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS No. 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The management of the Company is evaluating the impact of SFAS No. 157, but does not currently expect the adoption of SFAS No. 157, effective January 1, 2008, to have a material impact on the Company’s consolidated financial statements.

8

          In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS No. 159”), which permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The management of the Company is evaluating the potential impact of SFAS No. 159 on the Company’s consolidated financial statements.

3. Long-term Debt

          On October 18, 2006, the Company prepaid its outstanding senior-secured notes obligation using $50.0 million of its available cash and short-term investments. Under the original terms of the note agreement, the notes carried a fixed interest rate of 9.96% and a maturity date of January 31, 2008.

          On December 20, 2006, the Company entered into an agreement with a consortium of lenders to provide up to $150.0 million of financing to the Company through a five-year, unsecured revolving credit facility (the “2006 Credit Facility”). The agreement contains an expansion feature for the Company to increase the financing available under the 2006 Credit Facility up to $200.0 million. As of June 30, 2007, no borrowings had been made under the 2006 Credit Facility. As of June 30, 2007, and December 31, 2006, the Company was in compliance with the terms of its 2006 Credit Facility.

          Although the Company had no borrowings under the 2006 Credit Facility as of June 30, 2007, if a default occurs on future borrowings, either because Arbitron is unable to generate sufficient cash flow to service the debt or because Arbitron fails to comply with one or more of the restrictive covenants, the lenders could elect to declare all of the then outstanding borrowings, as well as accrued interest and fees, to be immediately due and payable. In addition, a default could result in the application of higher rates of interest on any amounts due.

          Interest paid during each of the six-month periods ended June 30, 2007, and 2006 was approximately $0.1 million and $1.2 million, respectively. Noncash amortization of deferred financing costs classified as interest expense during the three month periods ended June 30, 2007, and 2006, were each less than $0.1 million. Noncash amortization of deferred financing costs classified as interest expense during the six-month periods ended June 30, 2007 and 2006, was less than $0.1 million and $0.1 million, respectively.

9

4. Stockholders’ Equity

          Changes in stockholders’ equity for the six months ended June 30, 2007, were as follows (in thousands):

												Net Distributions
												to Ceridian			Retained						Total
									Additional			in Excess of			Earnings			Accumulated			Stock-
	Shares			Common		Treasury			Paid-In			Accumulated			Subsequent			Other Compre-			holders
	Outstanding			Stock		Stock			Capital			Earnings			to Spin-off			hensive Loss			Equity
Balance as of December 31, 2006		29,692		$	16,169	$	(1,323	)	$	53,598		$	(239,042	)	$	266,905		$	(7,051	)	$	89,256
Net income		—			—		—			—			—			19,283			—			19,283
Common stock issued		427			—		213			10,901			—			—			—			11,114
Stock repurchased		(107	)		—		(53	)		(5,122	)		—			—			—			(5,175	)
Excess tax benefit from stock option exercises		—			—		—			1,483			—			—			—			1,483
Non-cash compensation		—			—		—			3,473			—			—			—			3,473
Dividends declared		—			—		—			—			—			(6,035	)		—			(6,035	)
Other comprehensive income		—			—		—			—			—			—			348			348
Balance as of June 30, 2007		30,012		$	16,169	$	(1,163	)	$	64,333		$	(239,042	)	$	280,153		$	(6,703	)	$	113,747

          A quarterly cash dividend of $0.10 per common share was paid to stockholders on July 2, 2007.

5. Short-term Investments

          Short-term investments as of June 30, 2007, and December 31, 2006, consisted of $38.9 million and $27.6 million, respectively, in municipal and other government-issued variable-rate demand notes and auction-rate securities recorded by the Company at fair value. All of the Company’s short-term investment assets are classified as available-for-sale securities in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities.

          For the three months ended June 30, 2007 and 2006, gross purchases of available-for-sale securities were $47.0 million and $54.1 million, respectively, and gross proceeds from sales of available-for-sale securities were $47.5 million and $92.6 million for the three months ended June 30, 2007 and 2006, respectively.

          For the six months ended June 30, 2007 and 2006, gross purchases of available-for-sale securities were $140.2 million and $276.6 million, respectively, and gross proceeds from sales of available-for-sale securities were $129.0 million and $309.2 million for the six months ended June 30, 2007 and 2006, respectively.

10

6. Inventory

          Inventory as of June 30, 2007, and December 31, 2006, consisted of $2.3 million and $3.8 million, respectively, of Portable People Meter^TM equipment held for resale to international licensees of the PPM^TM service. The inventory is accounted for on a first-in, first-out (FIFO) basis.

7. Net Income Per Weighted-Average Common Share

          The computations of basic and diluted net income per weighted-average common share for the three and six months ended June 30, 2007 and 2006, are based on Arbitron’s weighted-average shares of common stock and potentially dilutive securities outstanding.

          Potentially dilutive securities are calculated in accordance with the treasury stock method, which assumes that the proceeds from the exercise of all stock options are used to repurchase the Company’s common stock at the average market price for the period. As of June 30, 2007, and 2006, there were options to purchase 1,929,584 and 2,514,252 shares of the Company’s common stock outstanding, of which options to purchase 13,291 and 1,427,187 shares of the Company’s common stock, respectively, were excluded from the computation of diluted net income per weighted-average common share, either because the options’ exercise prices were greater than the average market price of the Company’s common shares or assumed repurchases from proceeds from the options’ exercise were potentially antidilutive. The Company elected to use the short-cut method of determining its initial hypothetical tax benefit windfall pool and, in accordance with provisions under SFAS No. 123R, Share Based Payment, (“SFAS No. 123R”) the assumed proceeds associated with the entire amount of tax benefits for share-based awards granted prior to SFAS No. 123R adoption were used in the diluted shares computation. For share-based awards granted subsequent to the January 1, 2006 SFAS No. 123R adoption date, the assumed proceeds for the related excess tax benefits were used in the diluted shares computation.

          On November 16, 2006, Arbitron announced that its Board of Directors had authorized a program to repurchase up to $100.0 million of its outstanding common stock through either periodic open-market or private transactions at then-prevailing market prices over a period of two years through December 31, 2008. As of June 30, 2007, 106,600 shares of the Company’s common stock were repurchased under this program for $5.2 million.

8. Contingencies

          The Company is involved, from time to time, in litigation and proceedings arising in the ordinary course of business. Legal costs for services rendered in the course of these proceedings are charged to expense as they are incurred.

          During 2005, the Pennsylvania Department of Revenue concluded a sales tax audit of the Company and notified the Company of an assessment of $3.6 million, including outstanding sales tax and accumulated interest since 2001. Since 2005, the assessment has increased due to additional interest to $3.9 million as of June 30, 2007.

          Currently, the Company continues to contest the assessment in its entirety. Consistent with the findings of a previous Pennsylvania sales tax audit of the Company, the Company contends that it continues to provide nontaxable services to its Pennsylvania customers and intends to vigorously defend this position during the appeals process. The Commonwealth of Pennsylvania has denied the Company’s administrative appeals, and the dispute was submitted to the Commonwealth Court of Pennsylvania for consideration. Currently, the Company is discussing settlement options with the Office of Attorney General in an effort to avoid protracted litigation and the related costs and has offered to settle the disputed matter. As of June 30, 2007, the Office of Attorney General has not yet responded to the Company’s offer.

          Given the nature of this uncertainty, and the pending settlement offer, $0.5 million was recognized during the quarter ended June 30, 2007, in accordance with FAS No. 5 “Accounting for Contingencies.”

11

9. Comprehensive Income and Accumulated Other Comprehensive Loss

          The Company’s comprehensive income is comprised of net income, changes in foreign currency translation adjustments, and changes in defined benefit plan liabilities, net of tax (expense) benefits. The components of comprehensive income were as follows (in thousands) :

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2007		2006		2007		2006
Net income	$	3,788	$	7,360	$	19,283	$	25,546
Other comprehensive income:
Change in foreign currency translation adjustment, net of tax expense of $35 and $76 for the three months ended June 30, 2007 and 2006, respectively; and $43 and $89 for the six months ended June 30, 2007 and 2006, respectively		56		123		68		145
Change in defined benefit plan liabilities, net of tax expense of $175 and $171 for the three and six months ended June 30, 2007, respectively		276		—		280		—
Other comprehensive income		332		123		348		145
Comprehensive income	$	4,120	$	7,483	$	19,631	$	25,691

The components of accumulated other comprehensive loss were as follows (in thousands):

	June 30,			December 31,
	2007			2006
Foreign currency translation adjustment	$	408		$	340
Defined benefit plan liabilities		(7,111	)		(7,391	)
Accumulated other comprehensive loss	$	(6,703	)	$	(7,051	)

      Effective December 31, 2006, the Company adopted Statement of Financial Acounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132 (R) (“SFAS No. 158”). The provisions of SFAS No. 158 require that the funded status of the Company’s pension plans and the benefit obligations of the Company’s post-retirement benefit plans be recognized in the Company’s balance sheet. Appropriate adjustments were made to various assets and liabilities as of December 31, 2006, with an offsetting after-tax effect of $7.1 million recorded as a component of other comprehensive income rather than as an adjustment to the ending balance of accumulated other comprehensive income.

      Excluding the impact of the adoption of SFAS No. 158, total other comprehensive income for the year ended December 31, 2006 was $54.1 million after-tax, compared with the reported other comprehensive income of $47.0 million after-tax. The presentation of other comprehensive income for the year ended December 31, 2006 will be revised to exclude the impact of the adoption of SFAS No. 158 in the Company’s Annual Report on Form 10-K for the year ending December 31, 2007.

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10. Investment in Affiliates

          Investment in affiliates consists of the Company’s 49.5% interest in Scarborough Research (“Scarborough”), a syndicated, qualitative local market research partnership, and the Company’s 50.0% interest in Project Apollo LLC ( “Project Apollo”), a national marketing panel service pilot jointly owned by the Company and Nielsen Media Research. On February 1, 2007, the Company announced the formation of Project Apollo. Project Apollo’s objective is to test a proposed service that would provide multimedia exposure data combined with sales data from a single source to produce a measure of advertising effectiveness. The following table shows the investment activity for each of the Company’s affiliates and in total for 2007: (Note: Scarborough was the only affiliate owned by the Company during 2006.)

Summary of Investment Activity in Affiliates (in thousands)

	Three Months Ended June 30, 2007									Six Months Ended June 30, 2007
				Project									Project
	Scarborough			Apollo			Total			Scarborough			Apollo			Total
Beginning Balance	$	7,929		$	1,086		$	9,015		$	13,907		$	—		$	13,907
Proportionate share of income(loss)		5,763			(674	)		5,089			3,135			(1,802	)		1,333
Distributions from affiliates		(1,150	)		—			(1,150	)		(4,500	)		—			(4,500	)
Non-cash investments in affiliates		—			—			—			—			2,214			2,214
Cash investments in affiliates		—			954			954			—			954			954
Ending Balance at June 30, 2007	$	12,542		$	1,366		$	13,908		$	12,542		$	1,366		$	13,908

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11. Retirement Plans

          Certain of Arbitron’s United States employees participate in a defined-benefit pension plan that closed to new participants effective January 1, 1995. Arbitron subsidizes healthcare benefits for eligible retired employees who participate in the pension plan and were hired before January 1, 1992. Arbitron also sponsors two nonqualified, unfunded supplemental retirement plans.

          In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, (“SFAS No. 158”) which required the Company to recognize the underfunded status of its defined-benefit plans as a liability on the balance sheet as of December 31, 2006, and to recognize any changes in that funded status through comprehensive income. Arbitron currently measures plan assets and benefit obligations as of September 30 each year. Effective for fiscal years ending after December 15, 2008, the measurement date, in accordance with the provisions of SFAS No. 158, will be required to be as of the date of the Company’s fiscal year-end statement of financial position.

          The components of periodic benefit costs for the defined-benefit pension plan and postretirement plan were as follows (in thousands):

	Defined-Benefit						Postretirement				Supplemental
	Pension Plan						Plan				Retirement Plans
	Three Months						Three Months				Three Months
	Ended June 30,						Ended June 30,				Ended June 30,
	2007			2006			2007		2006		2007			2006
Service cost	$	218		$	242		$	9	$	8	$	32		$	7
Interest cost		445			413			21		17		52			40
Expected return on plan assets		(552	)		(494	)		—		—		—			—
Amortization of prior service cost		5			5			—		—		(5	)		(5	)
Amortization of net loss		166			180			11		5		48			30
Net periodic benefit cost	$	282		$	346		$	41	$	30	$	127		$	72

	Defined-Benefit						Postretirement				Supplemental
	Pension Plan						Plan				Retirement Plans
	Six Months						Six Months				Six Months
	Ended June 30,						Ended June 30,				Ended June 30,
	2007			2006			2007		2006		2007			2006
Service cost	$	435		$	483		$	18	$	17	$	65		$	43
Interest cost		890			826			42		33		105			81
Expected return on plan assets		(1,103	)		(988	)		—		—		—			—
Amortization of prior service cost		11			11			—		—		(11	)		(11	)
Amortization of net loss		331			359			23		10		96			64
Net periodic benefit cost	$	564		$	691		$	83	$	60	$	255		$	177

          Arbitron estimates that it will contribute $2.4 million in 2007 to these defined-benefit plans.

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12. Taxes

          On January 1, 2007, Arbitron adopted the provisions of FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes. In applying FIN 48, the Company assessed all material positions taken on income tax returns for years through December 31, 2006, that are still subject to examination by relevant taxing authorities. As of the date of adoption, the Company’s unrecognized tax benefits totaled $0.7 million. If recognized, the $0.7 million would reduce the Company’s effective tax rate in future periods.

          The Company files numerous income tax returns, primarily in the United States, including federal, state, and local jurisdictions, and certain foreign jurisdictions. Tax years ended December 31, 2003 through December 31, 2006, remain open for assessment by the Internal Revenue Service. Generally, the Company is not subject to state, local, or foreign examination for years prior to 2002. However, tax years 1989 through 2001 remain open for assessment for certain state taxing jurisdictions where net operating loss (“NOL”) carryforwards were utilized on the income tax returns since 2002. The Company accrues potential interest and penalties and recognizes income tax expense where, under relevant tax law, interest and penalties would be assessed if the uncertain tax position ultimately were not sustained.

          Management determined it is reasonably possible that certain unrecognized tax benefits as of the date of adoption will decrease during the subsequent 12 months due to the expiration of statutes limitations and due to the settlement of certain state audit examinations. The estimated decrease in these unrecognized federal tax benefits and the estimated decrease in unrecognized tax benefits from various states are both immaterial.

          Income taxes paid for the six months ended June 30, 2007 and 2006, were $12.7 million and $15.0 million, respectively.

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13. Share-Based Compensation

     The following table sets forth information with regard to the income statement recognition of share-based compensation:

	Three Months		Three Months		Six Months		Six Months
	Ended June 30,		Ended June 30,		Ended June 30,		Ended June 30,
	2007		2006		2007		2006
Cost of revenue	$	182	$	182	$	316	$	313
Selling, general and administrative		1,852		2,047		2,941		3,238
Research and development		139		126		216		224
Share-based compensation	$	2,173	$	2,355	$	3,473	$	3,775

     There was no capitalized share-based compensation cost incurred during the three and six-month periods ended June 30, 2007, and 2006.

     In some cases, the vesting of share-based awards is accelerated due to an employee’s retirement. Prior to the adoption of SFAS No. 123R, the amount disclosed for the Company’s pro forma compensation expense did not include an acceleration of expense recognition for retirement eligible employees. For share-based arrangements granted subsequent to the adoption of SFAS No. 123R, the Company accelerates expense recognition if retirement eligibility affects the vesting of the award. If the accelerated pro forma expense recognition had occurred prior to January 1, 2006, the share-based compensation expense for the three and six-month periods ended June 30, 2007, would have been lower by $0.1 million and $0.3 million, respectively, and for the same periods of 2006, would have been lower by $0.3 million and $0.6 million, respectively.

Stock Options

     Stock options awarded to employees under the 1999 and 2001 Stock Incentive Plans (each individual plan referred to herein as a “SIP,” and collectively as the “SIPs”) generally vest annually over a three-year period, have five-year or 10-year terms and have an exercise price not less than the fair market value of the underlying stock at the date of grant. Stock options granted to directors under the 1999 SIP generally vest upon the date of grant, are generally exercisable in six months after the date of grant, have 10-year terms and have an exercise price not less than the fair market value of the underlying stock at the date of grant. Certain option and share awards provide for accelerated vesting if there is a change in control of the Company (as defined in the SIPs).

     The Company uses historical data to estimate option exercises and employee terminations in order to determine the expected term of the option; identified groups of optionholders that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted represents the period of time that such options are expected to be outstanding. The expected term can vary for certain groups of optionholders exhibiting different behavior. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury strip bond yield curve in effect at the time of grant. Expected volatilities are based on the historical volatility of the Company’s common stock.

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     The fair value of each option granted to employees and nonemployee directors during the six months ended June 30, 2007, was estimated on the date of grant using a Black-Scholes option valuation model. Those assumptions along with other data regarding the Company’s stock options for the three and six months ended June 30, 2007, and 2006, are noted in the following table:

Assumptions for options	Three Months	Three Months	Six Months	Six Months
granted to employees and	Ended June 30,	Ended June 30,	Ended June 30,	Ended June 30,
nonemployee directors	2007	2006	2007	2006
Expected volatility	24.95 - 26.24%	27.22 - 27.35%	24.95 - 26.52%	27.22 - 27.35%
Expected dividends	1.00%	1.00%	1.00%	1.00%
Expected term (in years)	5.75 - 6.25	5.25 - 6.00	5.75 - 6.25	5.25 - 6.00
Risk-free rate	4.62 - 4.91%	4.96 - 5.07%	4.56 - 4.91%	4.37 - 5.07%
Weighted-average volatility	25.39%	27.34%	25.45%	27.33%
Weighted-average term (in years)	5.92	5.52	5.91	5.74
Weighted-average risk-free rate	4.62%	4.99%	4.62%	4.70%
Weighted-average grant date fair value	$14.82	$12.73	$14.79	$12.56

	Three Months		Three Months		Six Months		Six Months
	Ended June 30,		Ended June 30,		Ended June 30,		Ended June 30,
Other data	2007		2006		2007		2006
Options granted		151,291		158,522		158,610		299,113
Weighted average exercise price for options granted	$	48.26	$	40.09	$	48.15	$	39.51

     As of June 30, 2007, there was $2.5 million of total unrecognized compensation cost related to options granted under the SIPs. This aggregate unrecognized cost is expected to be recognized over a weighted-average period of 1.9 years. The weighted-average exercise price and weighted-average remaining contractual term for outstanding stock options as of June 30, 2007, was $38.04 and 6.57 years, respectively. The total intrinsic value of options exercised during the three months ended June 30, 2007, and 2006, was $2.7 million and $0.7 million, respectively. The total intrinsic value of options exercised during the six months ended June 30, 2007, and 2006, was $4.1 million and $1.9 million, respectively.

Nonvested Share Awards

     The Company’s nonvested share awards generally vest over four or five years on either a monthly or annual basis. Compensation expense is recognized on a straight-line basis using the market price on the date of grant as the awards vest. For the six months ended June 30, 2007, and 2006, the number of nonvested share awards granted was 113,233 and 79,482 shares, respectively, and the weighted-average grant date fair value was $46.33 and $38.88, respectively. The total fair value of share awards vested during the six months ended June 30, 2007, and 2006, was $0.6 million and $0.1 million, respectively. For the three months ended June 30, 2007, the number of nonvested share awards granted was 10,933 shares and the weighted average grant date fair value was $48.25. There were no nonvested share awards granted during the three months ended June 30, 2006. The total fair value of share awards vested during the three months ended June 30, 2007, and 2006, was $0.1 million and less than $0.1 million, respectively. As of June 30, 2007, there was $7.3 million of total unrecognized compensation cost related to nonvested share awards granted under the SIPs. This aggregate unrecognized cost for nonvested share awards is expected to be recognized over a weighted-average period of 3.1 years.

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Deferred Stock Units

     Deferred stock units granted to employees vest annually over a three-year period and are convertible to shares of common stock, subsequent to their termination of employment. Deferred stock units granted to nonemployee directors vest immediately upon grant and are convertible into shares of common stock subsequent to the directors’ termination of service. For the six months ended June 30, 2007, the number of deferred stock units granted to employee and nonemployee directors was 21,667 and 2,384 shares, respectively. For the six months ended June 30, 2006, the number of deferred stock units granted to employee and nonemployee directors was 18,186 and 3,915 shares, respectively. The total fair value of deferred stock units that vested during the six months ended June 30, 2007, and 2006, was $0.1 million and $0.1 million, respectively. As of June 30, 2007, the total unrecognized compensation cost related to deferred stock units granted under the SIPs was $1.5 million. The aggregate unrecognized cost as of June 30, 2007, is expected to be recognized over a weighted-average period of 2.5 years.

Employee Stock Purchase Plan

     The Company’s compensatory Employee Stock Purchase Plan (“ESPP”) provides for the issuance of up to 600,000 shares of newly issued or treasury common stock of Arbitron. The purchase price of the stock to ESPP participants is 85% of the lesser of the fair market value on either the first day or the last day of the applicable three-month offering period. The total amount of compensation expense recognized for ESPP share-based arrangements was $0.1 million for each of the three-month periods ended June 30, 2007, and 2006, respectively. The number of ESPP shares issued during the three months ended June 30, 2007, and 2006, was 9,095 and 10,268 shares, respectively. The total amount of compensation expense recognized for ESPP share-based arrangements was $0.2 million and $0.1 million for the six-month periods ended June 30, 2007, and 2006, respectively. The number of ESPP shares issued during the six months ended June 30, 2007, and 2006, was 17,377 and 19,746 shares, respectively.

14. Concentration of Credit Risk

     Arbitron’s quantitative radio audience measurement service and related software sales, which are primarily provided to radio broadcasters, accounted for approximately 76% and 78% of the Company’s revenue for the three months ended June 30, 2007, and 2006, and 86% and 87% for the six months ended June 30, 2007 and 2006, respectively. Arbitron had one customer that individually represented 19% of its revenue for the year ended December 31, 2006. Arbitron routinely assesses the financial strength of its customers and has experienced only nominal losses on its trade accounts receivable.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The following discussion should be read in conjunction with Arbitron’s consolidated financial statements and the notes thereto in this Quarterly Report on Form 10-Q.

Forward-Looking Statements

     This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements regarding Arbitron Inc. and its subsidiaries (“we,” “our,” “Arbitron” or the “Company”) in this document that are not historical in nature, particularly those that utilize terminology such as “may,” “will,” “should,” “likely,” “expects,” “anticipates,” “estimates,” “believes,” or “plans” or comparable terminology, are forward-looking statements based on current expectations about future events, which Arbitron has derived from information currently available to it. These forward-looking statements involve known and unknown risks and uncertainties that may cause our results to be materially different from results implied in such forward-looking statements. These risks and uncertainties include, in no particular order, whether we will be able to:

• successfully implement the rollout of our Portable People Meter^TM service;

• renew contracts with large customers as they expire;

• successfully execute our business strategies, including entering into potential acquisition, joint-venture or other material third-party agreements;

• effectively manage the impact of any further ownership shifts in the radio and advertising agency industries;

• respond to rapidly changing technological needs of our customer base, including creating new proprietary software systems and new customer products and services that meet these needs in a timely manner;

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

• successfully manage the impact on costs of data collection due to lower respondent cooperation in surveys, privacy concerns, consumer trends, technology changes and/or government regulations;

• successfully develop and implement technology solutions to measure multi-media and advertising in an increasingly competitive environment; and

• successfully obtain and/or maintain Media Rating Council^® accreditation for our audience measurement services.

     Additional important factors known to Arbitron that could cause actual results to differ materially from our forward-looking statements are identified and discussed from time to time in Arbitron’s filings with the Securities and Exchange Commission, including in particular the risk factors discussed under the caption “ITEM 1A. RISK FACTORS” in Arbitron’s Annual Report on Form 10-K for the year ended December 31, 2006.

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

Overview

     Arbitron is an international media and marketing information services firm primarily serving radio, cable television, advertising agencies, advertisers, out-of-home media, online media and, through its Scarborough Research joint venture with The Nielsen Company, broadcast television and print media.

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     Arbitron currently provides four main services:

• measuring radio audiences in local markets in the United States;

• measuring national radio audiences and the audience size and composition of network radio programs and commercials;

• providing application software used for accessing and analyzing media audience and marketing information data; and

• providing consumer, shopping and media usage information services to radio, cable television, advertising agencies, advertisers, retailers, out-of-home media, online industries and, through its Scarborough Research joint venture with The Nielsen Company, broadcast television and print media.

Known Trends That Management Considers Material

     Significant Concentrations. Historically, the Company’s quantitative radio measurement services and related software have accounted for a substantial majority of its total revenues. Consolidation in the radio broadcasting industry has led to a concentration of ownership of radio stations and, consequently, Arbitron’s dependence on a limited number of key customers for such services and related software has increased. For the year ended December 31, 2006, Clear Channel Communications, Inc. (“Clear Channel”) and CBS Radio Inc. (“CBS Radio”) represented approximately 19 percent and nine percent, respectively, of Arbitron’s total revenue. The Company’s agreements with these customers are not exclusive and do not contain automatic renewal obligations.

     On June 26, 2007 Arbitron entered into a new multi-year agreement with Clear Channel to provide PPM radio ratings and other related services to Clear Channel’s 268 radio stations located in the 46 markets in which Clear Channel operates out of the 50 markets identified in the Company’s previously announced PPM roll-out plan (we refer to the 46 markets in which Clear Channel operates that are included in the PPM roll-out plan, collectively, as the “Clear Channel PPM Markets”). Pursuant to the terms of the agreement, Arbitron will provide Clear Channel with PPM ratings services, as and when the new audience ratings technology is deployed in the Clear Channel PPM Markets. Until such time as the PPM ratings technology is deployed in a particular market, the Company will continue to provide Clear Channel with its diary-based ratings services in that market. As the PPM ratings technology is deployed in a particular market, the diary-based ratings agreement will lapse and the new agreement will become applicable to such market. The new agreement also extends the diary-based ratings agreement in the Clear Channel PPM Markets that do not enter into PPM pre-currency prior to December 31, 2008 until such time as the PPM service is commercialized in those markets, but not later than December 31, 2011. The existing agreement between the Company and Clear Channel for diary-based ratings in markets outside of the Clear Channel PPM Markets is not amended by the new agreement and is currently scheduled to expire December 31, 2008.

     On February 9, 2007, The Media Audit/Ipsos announced that they will receive funding from a number of broadcasters, including Clear Channel, to test their competing electronic ratings system in the Houston market.

     In May 2006, Arbitron announced that it had entered into a license agreement with CBS Radio to provide diary-based services and PPM radio ratings to all of its stations, as the new ratings technology is deployed, through the first quarter of 2014.

     Arbitron’s quantitative radio audience measurement business and related software sales accounted for approximately 76% and 86% of its revenue for the three and six months ended June 30, 2007, respectively. The Company expects that for the year ended December 31, 2007, Arbitron’s quantitative radio audience measurement business and related software sales will account for approximately 85% of its revenue, which is consistent with historic annual trends. Quarterly fluctuations in this percentage are reflective of the seasonal delivery schedule of the Company’s radio audience measurement business.

     Electronic Measurement Initiatives. Arbitron has begun execution of its plan to progressively roll out its PPM ratings service to the top 50 radio markets by the end of 2010. Measurement by the PPM service began in pilot mode in Houston in June 2005. In January 2007, the Houston methodology was accredited by the Media Rating Council (“MRC”). In July 2007, the PPM service replaced the diary-based service in Houston.

     A PPM panel was installed in Philadelphia beginning in August 2006. The Philadelphia PPM radio measurement data have been audited by the MRC. On the basis of the completion of this audit, the sharing of the audit results with the MRC’s audit committee, and the completion of a two-month precurrency period for training and electronic measurement transition, the PPM service in Philadelphia replaced the diary service in April 2007. The Philadelphia PPM data are not yet accredited — the process of obtaining accreditation continues. Commercialization of the remaining top 50 radio markets by the end of 2010 is currently on schedule with Arbitron’s previously announced rollout plan.

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     Currently, approximately 26,000 panelists have been installed worldwide for PPM-supported services, including the PPM radio ratings service, and through the Project Apollo LLC (“Project Apollo”), a jointly owned limited liability company with Nielsen Media Research, Inc. to explore the feasibility of the commercialization of a national marketing service panel.

     Commercialization of the PPM radio rating service and exploration of other strategic applications of the PPM technology, including the national marketing panel service, will require a substantial financial investment. Arbitron believes that during the PPM rollout period its costs and expenses will increase and substantial capital expenditures will be required. In addition, the management of Arbitron expects that, if the decision to commercialize the national market panel service is made, Arbitron’s expenses will increase as a result of continued deployment costs associated with the national marketing panel service and the strategic development of its electronic ratings business.

     Arbitron believes that, while commercialization of the PPM ratings service and other strategic applications of the PPM technology will have a near-term negative impact on its results of operations, which impact likely will be material, its operating margins can be restored through the completion of the PPM transition process in the top 50 radio markets, although there can be no assurance that this will be the case.

     Arbitron announced in April 2007 that broadcasters in Iceland have selected the PPM system as the audience measurement currency system for both radio and television, making Iceland the first country to use the PPM system’s multimedia measurement capabilities. The six-year contract was awarded to the Reykjavik-based research and consulting firm Capacent, supported by TNS Norway, through a competitive request for proposals for electronic audience measurement. Arbitron announced in June 2007 that the radio industry in Denmark selected the PPM system as its electronic audience measurement system. The five-year contract was awarded to TNS Gallup, an international licensee of the PPM technology. Beginning January 2008, a national panel of 750 Danish consumers will be equipped with the PPM device to collect overnight radio-listening data. Danish broadcasters will use the PPM data for commercial sales and program planning.

     One of Arbitron’s key corporate strategy objectives is to expand its information services to a broader range of media types, including broadcast television, cable, out-of-home media, satellite radio and television, Internet broadcasts and mobile media. On July 23, 2007, the MRC accredited the average-quarter-hour, time-period television ratings data produced by the PPM ratings service in Houston. The PPM service in Houston is the first accredited portable meter service, collecting data on radio, local television and cable use from one sample of consumers, at home and away from home.

Response Rates and Sample Proportionality

     Arbitron must achieve response rates sufficient to maintain confidence in its ratings, the support of the industry and accreditation by the Media Rating Council. Consistent with general industry trends, overall response rates have declined over the past several years, and it has become increasingly difficult and more costly for the Company to obtain consent from persons to participate in its surveys.

     Another measure often used by clients to assess quality in Arbitron’s surveys is proportionality, which refers to how well the distribution of the sample for any individual survey matches the distribution of the population in the market. In recent years, Arbitron’s ability to deliver survey samples of young adults that match the percentage of this demographic group in the total population has deteriorated, caused in part by the trend among some households to disconnect their landline phones, effectively removing these households from the Arbitron sample frame. As consumers adopt modes of telecommunication other than telephone landlines, such as mobile phones and cable or Internet calling, it is becoming increasingly difficult for Arbitron to reach and recruit participants. Recruiting mobile phone-only households will lead to increased costs.

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     Arbitron has committed extensive efforts and resources to address the decline of response rates and to maintain sample proportionality, including a comprehensive set of initiatives to bolster response rates and improve sample proportionality among African-American, Hispanic, and young male respondents in Arbitron’s diary-based markets. These initiatives include providing for substantial increases in cash incentives and other survey treatments. The most significant response rate initiatives in 2007 include the completion of the rollout of the 2006 response rate and proportionality action plan and the opening of a third Arbitron owned and operated participant interviewing center during the first quarter of 2007. Arbitron’s experience is that the internal interviewing centers outperform the outsourced calling center vendors that they replace. Management believes that significant additional expenditures will be required in the future with respect to response rates and sample proportionality.

     As the PPM service is rolled out, Arbitron’s management expects to incur similar challenges in the operation of an electronic measurement service, as are faced in the Company’s diary-based service; including those challenges related to response rate and sample proportionality. Arbitron also expects that additional measures to address these challenges will be implemented and require expenditures incremental to those required for its diary-based service.

Pennsylvania Sales Tax Assessment

     During 2005, the Pennsylvania Department of Revenue concluded a sales tax audit of the Company and notified the Company of an assessment of $3.6 million, including outstanding sales tax and accumulated interest since 2001. Since 2005, the assessment has increased due to additional interest to $3.9 million as of June 30, 2007.

     Currently, the Company continues to contest the assessment in its entirety. Consistent with the findings of a previous Pennsylvania sales tax audit of the Company, the Company contends that it continues to provide nontaxable services to its Pennsylvania customers and intends to vigorously defend this position during the appeals process. The Commonwealth of Pennsylvania has denied the Company’s administrative appeals, and the dispute was submitted to the Commonwealth Court of Pennsylvania for consideration. Currently, the Company is discussing settlement options with the Office of Attorney General in an effort to avoid protracted litigation and the related costs and has offered to settle the disputed matter. The Office of Attorney General has not yet responded to the Company’s offer.

     Given the nature of this uncertainty, and the pending settlement offer, $0.5 million was recognized during the quarter ended June 30, 2007, in accordance with FAS No. 5 “Accounting for Contingencies.”

New Accounting Pronouncements

     In July 2006, the FASB issued FASB Interpretation (“FIN”) 48, Accounting for Uncertainty in Income Taxes (“FIN 48"), an interpretation of FASB Statement No. 109, Accounting for Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold that a tax position is required to meet before being recognized in the financial statements. The Company adopted FIN 48, effective January 1, 2007. The impact of applying FIN 48 to the Company’s consolidated financial statements was immaterial.

     Effective December 31, 2006, the Company adopted SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans (“SFAS No. 158”). Arbitron currently measures plan assets and benefit obligations as of September 30 each year. In accordance with the provisions of SFAS No. 158, the measurement date will be required to be as of the date of the Company’s fiscal year-end statement of financial position effective for fiscal years ending after December 15, 2008.

     In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS No. 157”), which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS No. 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The management of the Company is evaluating the impact of SFAS No. 157, but does not currently expect the adoption of SFAS No. 157, effective January 1, 2008, to have a material impact on the Company’s consolidated financial statements.

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     In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS No. 159”), which permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The management of the Company is evaluating the potential impact of SFAS No. 159 on the consolidated financial statements.

Critical Accounting Policies and Estimates

     Critical accounting policies and estimates are those that are both important to the presentation of Arbitron’s financial position and results of operations, and require management’s most difficult, complex or subjective judgments.

     Arbitron capitalizes software development costs with respect to significant internal-use software initiatives or enhancements in accordance with Statement of Position 98-1, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use. The costs are capitalized from the time that the preliminary project stage is completed and management considers it probable that the software will be used to perform the function intended, until the time the software is placed in service for its intended use. Once the software is placed in service, the capitalized costs are amortized over periods of three to five years. Management performs an assessment quarterly to determine if it is probable that all capitalized software will be used to perform its intended function. If an impairment exists, the software cost is written down to estimated fair value. As of June 30, 2007, and December 31, 2006, Arbitron’s capitalized software developed for internal use had carrying amounts of $19.9 million and $19.3 million, respectively, including $9.3 million and $9.0 million, respectively, of software related to the PPM system.

     Arbitron uses the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year and for deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity’s financial statements or tax returns. Management must make assumptions, judgments and estimates to determine the current provision for income taxes and also deferred tax assets and liabilities and any valuation allowance to be recorded against a deferred tax asset. Assumptions, judgments, and estimates relative to the current provision for income taxes take into account current tax laws, interpretations of current tax laws and possible outcomes of current and future audits conducted by domestic and foreign tax authorities. Changes in tax law or interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for income taxes in the consolidated financial statements. Assumptions, judgments and estimates relative to the value of a deferred tax asset take into account forecasts of the amount and nature of future taxable income. Actual operating results and the underlying amount and nature of income in future years could render current assumptions, judgments and estimates of recoverable net deferred taxes inaccurate. Any of the assumptions, judgments and estimates mentioned above could cause actual income tax obligations to differ from estimates, thus impacting Arbitron’s financial position and results of operations.

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Results of Operations

Comparison of the Three Months Ended June 30, 2007 to the Three Months Ended June 30, 2006

     The following table sets forth information with respect to the consolidated statements of income of Arbitron:

Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(unaudited)

	Three Months Ended						Increase						Percentage of
	June 30,						(Decrease)						Revenue
	2007			2006			Dollars			Percent			2007			2006
Revenue	$	79,047		$	74,165		$	4,882			6.6	%		100.0	%		100.0	%
Costs and expenses
Cost of revenue		46,468			36,684			9,784			26.7	%		58.8	%		49.5	%
Selling, general and administrative		20,461			20,557			(96	)		(0.5	%)		25.9	%		27.7	%
Research and development		11,830			10,031			1,799			17.9	%		15.0	%		13.5	%
Total costs and expenses		78,759			67,272			11,487			17.1	%		99.6	%		90.7	%
Operating income		288			6,893			(6,605	)		(95.8	%)		0.4	%		9.3	%
Equity in net income of affiliates		5,089			5,053			36			0.7	%		6.4	%		6.8	%
Income before interest and income tax expense		5,377			11,946			(6,569	)		(55.0	%)		6.8	%		16.1	%
Interest income		670			829			(159	)		(19.2	%)		0.8	%		1.1	%
Interest expense		96			937			(841	)		(89.8	%)		0.1	%		1.3	%
Income before income tax expense		5,951			11,838			(5,887	)		(49.7	%)		7.5	%		16.0	%
Income tax expense		2,163			4,478			(2,315	)		(51.7	%)		2.7	%		6.0	%
Net income	$	3,788		$	7,360		$	(3,572	)		(48.5	%)		4.8	%		10.0	%
Net income per weighted-average common share
Basic	$	0.13		$	0.25		$	(0.12	)		(48.0	%)
Diluted	$	0.13		$	0.24		$	(0.11	)		(45.8	%)
Cash dividends declared per common share	$	0.10		$	0.10		$	—
Other data:
EBIT (1)	$	5,377		$	11,946		$	(6,569	)		(55.0	%)
EBITDA (1)	$	8,094		$	14,215		$	(6,121	)		(43.1	%)
EBIT and EBITDA Reconciliation (1)
Net income	$	3,788		$	7,360		$	(3,572	)
Income tax expense		2,163			4,478			(2,315	)
Interest income		(670	)		(829	)		(159	)
Interest expense		96			937			(841	)
EBIT (1)		5,377			11,946			(6,569	)
Depreciation and amortization		2,717			2,269			448
EBITDA (1)	$	8,094		$	14,215		$	(6,121	)

(1) EBIT (earnings before interest and income taxes) and EBITDA (earnings before interest, income taxes, depreciation and amortization) are non-GAAP financial measures that the management of Arbitron believes are useful to investors in evaluating Arbitron’s results. For further discussion of these non-GAAP financial measures, see paragraph below entitled “EBIT and EBITDA” of this quarterly report.

24

     Revenue. Revenue increased 6.6% for the three months ended June 30, 2007, as compared to the same period in 2006, due primarily to $5.2 million of increases related to the ratings subscriber base, contract renewals, and price escalations in multiyear customer contracts for Arbitron’s quantitative data license revenue, partially offset by a $0.4 million decrease in PPM International revenues.

     Cost of Revenue. Cost of revenue increased by 26.7% for the three months ended June 30, 2007, as compared to the same period in 2006. The increase in cost of revenue was primarily attributable to an $11.6 million increase in Arbitron’s quantitative, qualitative and software application services, which was comprised substantially of a $4.1 million increase in PPM rollout costs largely associated with the management and recruitment of the PPM panels for the Philadelphia, New York, Los Angeles, and Chicago markets; a $2.0 million increase in expenses associated with PPM ratings costs that were classified as research and development in 2006 and as cost of revenue in 2007; a $1.8 million increase in diary data collection and processing costs; a $1.2 million increase associated with response rate initiatives; a $1.4 million increase in royalties, substantially associated with our Scarborough affiliate; and a $0.7 million increase due to operating costs associated with the opening of a third participant interviewing center during the first quarter of 2007. These increases were partially offset by a $1.6 million decrease in Project Apollo costs, which, due to the formation of Project Apollo in February 2007, are now being expensed directly by the affiliate. Arbitron records its share of the net operating results of the affiliate through the equity in net income of affiliates line of the Company’s consolidated income statement. The management of Arbitron expects that Arbitron’s cost of revenue will continue to increase in the future as a result of its efforts to commercialize the PPM ratings service and support the rollout of this service over the next two to three years.

     Selling, General and Administrative. Selling, general and administrative expenses decreased slightly by 0.5% for the three months ended June 30, 2007, as compared to the same period in 2006. The decrease in selling, general and administrative expenses was due primarily to a $1.0 million decrease associated with lower incentive plan expenses and a $0.8 million decrease in sales and marketing costs resulting from cost saving initiatives related to the Company’s sales force, which were substantially offset by a $0.6 million increase in expenses for merger and acquisition advisory services incurred during the three months ended June 30, 2007, a $0.5 million increase related to the accrual of estimated settlement costs associated with a Pennsylvania sales tax assessment, and a $0.3 million increase in expenses and amortization related to the Company’s accounts receivable and contract management system that was implemented during June 2006.

     Research and Development. Research and development expenses increased 17.9% during the three months ended June 30, 2007, as compared to the same period in 2006. The increase in research and development expenses resulted primarily from a $1.5 million increase in expenses associated with Arbitron’s continued development of the next generation of its client software, a $1.1 million increase related to applications and infrastructure to support the PPM service, and a $0.7 million increase in expenses in support of the Company’s diary ratings service, substantially offset by a $2.0 million decrease in expenses associated with PPM ratings costs that were classified as research and development in 2006 and as cost of revenue in 2007.

     Equity in net income of affiliates. Equity in net income of affiliates (relating collectively to Arbitron’s Scarborough joint venture and jointly-owned Project Apollo) remained flat for the three months ended June 30, 2007, as compared to the same period in 2006. The formalization of Project Apollo occurred during February 2007. The purpose of Project Apollo is to complete the development and testing of the Project Apollo marketing research service and the expansion of the pilot panel to a full national service if the test results meet expectations and generate marketplace support. Arbitron’s increase in its share of Scarborough’s net income of $0.7 million was offset by a $0.7 million share of the Project Apollo loss for the three months ended June 30, 2007, as compared to the same period of 2006. Arbitron expects that its equity in net income of affiliates will continue to be adversely impacted due to the costs incurred during the testing of the national marketing research service. If the decision is made to commercialize the national marketing panel service, there will be significant costs incurred to increase the size of the panel to a commercial level. These cost increases will be incurred in advance of receiving expected revenue from the service.

     Interest Income. Interest income decreased 19.2% during the three months ended June 30, 2007, as compared to the same period in 2006 due to lower average cash and short-term investment balances.

25

     Interest Expense. Interest expense decreased 89.8% for the three months ended June 30, 2007, as compared to the same period in 2006, due to Arbitron’s prepayment of its $50.0 million senior-secured notes obligation on October 18, 2006.

     Income Tax Expense. The income tax rate for the three months ended June 30, 2007 was 36.3% as compared to 37.8% for the same period of 2006. The effective tax rate, excluding certain immaterial discrete items, was increased from 37.2% for the six months ended June 30, 2006 to 37.7% for the six months ended June 30, 2007, to reflect the increase in certain nondeductible expenses.

     Net Income. Net income decreased 48.5% for the three months ended June 30, 2007, as compared to the same period in 2006, due primarily to planned expenses required to build Arbitron’s PPM panels for the Philadelphia and New York markets, and to support the strategic development of Arbitron’s PPM ratings business.

     EBIT and EBITDA. Arbitron’s management believes that presenting EBIT and EBITDA, both non-GAAP financial measures, as supplemental information helps investors, analysts, and others, if they so choose, in understanding and evaluating Arbitron’s operating performance in some of the same manners that management does because EBIT and EBITDA exclude certain items that are not directly related to Arbitron’s core operating performance. Arbitron’s management references these non-GAAP financial measures in assessing current performance and making decisions about internal budgets, resource allocation and financial goals. EBIT is calculated by deducting net interest income from net income and adding back income tax expense to net income. EBITDA is calculated by deducting net interest income from net income and adding back income tax expense, and depreciation and amortization to net income. EBIT and EBITDA should not be considered substitutes either for net income, as indicators of Arbitron’s operating performance, or for cash flow, as measures of Arbitron’s liquidity. In addition, because EBIT and EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. EBIT decreased 55.0% and EBITDA decreased 43.1% for the three months ended June 30, 2007, as compared to the same period in 2006, due primarily to planned expenses required to build Arbitron’s PPM panels for the Philadelphia and New York markets, and to support the strategic development of Arbitron’s PPM ratings business.

26

Comparison of the Six Months Ended June 30, 2007 to the Six Months Ended June 30, 2006

     The following table sets forth information with respect to the consolidated statements of income of Arbitron:

Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(unaudited)

	Six Months Ended						Increase						Percentage of
	June 30,						(Decrease)						Revenue
	2007			2006			Dollars			Percent			2007			2006
Revenue	$	170,824		$	159,253		$	11,571			7.3	%		100.0	%		100.0	%
Costs and expenses
Cost of revenue		78,718			60,939			17,779			29.2	%		46.1	%		38.3	%
Selling, general and administrative		40,818			40,013			805			2.0	%		23.9	%		25.1	%
Research and development		22,567			20,012			2,555			12.8	%		13.2	%		12.6	%
Total costs and expenses		142,103			120,964			21,139			17.5	%		83.2	%		76.0	%
Operating income		28,721			38,289			(9,568	)		(25.0	%)		16.8	%		24.0	%
Equity in net income of affiliates		1,333			2,678			(1,345	)		(50.2	%)		0.8	%		1.7	%
Income before interest and income tax expense		30,054			40,967			(10,913	)		(26.6	%)		17.6	%		25.7	%
Interest income		1,251			1,816			(565	)		(31.1	%)		0.7	%		1.1	%
Interest expense		191			1,880			(1,689	)		(89.8	%)		0.1	%		1.2	%
Income before income tax expense		31,114			40,903			(9,789	)		(23.9	%)		18.2	%		25.7	%
Income tax expense		11,831			15,357			(3,526	)		(23.0	%)		6.9	%		9.6	%
Net income	$	19,283		$	25,546		$	(6,263	)		(24.5	%)		11.3	%		16.1	%
Net income per weighted-average common share
Basic	$	0.65		$	0.84		$	(0.19	)		(22.6	%)
Diluted	$	0.64		$	0.83		$	(0.19	)		(22.9	%)
Cash dividends declared per common share	$	0.20		$	0.20		$	—
Other data:
EBIT (1)	$	30,054		$	40,967		$	(10,913	)		(26.6	%)
EBITDA (1)	$	35,447		$	45,324		$	(9,877	)		(21.8	%)
EBIT and EBITDA Reconciliation (1)
Net income	$	19,283		$	25,546		$	(6,263	)
Income tax expense		11,831			15,357			(3,526	)
Interest income		(1,251	)		(1,816	)		(565	)
Interest expense		191			1,880			(1,689	)
EBIT (1)		30,054			40,967			(10,913	)
Depreciation and amortization		5,393			4,357			1,036
EBITDA (1)	$	35,447		$	45,324		$	(9,877	)

(1) EBIT (earnings before interest and income taxes) and EBITDA (earnings before interest, income taxes, depreciation and amortization) are non-GAAP financial measures that the management of Arbitron believes are useful to investors in evaluating Arbitron’s results. For further discussion of these non-GAAP financial measures, see paragraph below entitled “EBIT and EBITDA” of this quarterly report.

27

     Revenue. Revenue increased 7.3% for the six months ended June 30, 2007, as compared to the same period in 2006, due primarily to $10.4 million of increases related to the ratings subscriber base, contract renewals, and price escalations in multiyear customer contracts for Arbitron’s quantitative data license revenue, a $0.9 million increase in Continental Research revenue, and a $0.4 million increase in PPM International revenue.

     Cost of Revenue. Cost of revenue increased by 29.2% for the six months ended June 30, 2007, as compared to the same period in 2006. The increase in cost of revenue was primarily attributable to an $19.3 million increase in Arbitron’s quantitative, qualitative and software application services, which was comprised substantially of a $6.8 million increase in PPM rollout costs largely associated with the management and recruitment of the PPM panels for the Philadelphia, New York, Los Angeles, and Chicago markets; a $3.7 million increase in expenses associated with PPM ratings costs that were classified as research and development in 2006 and as cost of revenue in 2007; a $2.4 million increase in diary data collection and processing costs; a $2.2 million increase associated with response rate initiatives; a $1.5 million increase due to operating costs associated with the opening of a third participant interviewing center during the first quarter of 2007; a $0.9 million increase associated with computer center costs and a $1.3 million increase in royalties, substantially associated with our Scarborough affiliate. These increases were partially offset by a $2.6 million decrease in Project Apollo costs, which, due to the formation of Project Apollo in February 2007, are now being expensed directly by the affiliate. Arbitron records its share of the net operating results of the affiliate through the equity in net income of affiliates line of the Company’s consolidated income statement. The management of Arbitron expects that Arbitron’s cost of revenue will continue to increase in the future as a result of its efforts to commercialize the PPM ratings service and support the rollout of this service over the next two to three years.

     Selling, General and Administrative. Selling, general and administrative expenses increased by 2.0% for the six months ended June 30, 2007, as compared to the same period in 2006. The increase in selling, general and administrative expenses was due primarily to a $1.2 million increase in expenses for merger and acquisition advisory services incurred during the six months ended June 30, 2007; a $0.9 million increase in expenses and amortization related to the Company’s accounts receivable and contract management system that was implemented during June 2006, and a $0.5 million increase related to the accrual of estimated settlement costs associated with a Pennsylvania sales tax assessment; substantially offset by a $1.0 million decrease associated with lower incentive plan expenses and a $0.9 million decrease in sales and marketing costs resulting from cost saving initiatives related to the Company’s sales force.

     Research and Development. Research and development expenses increased 12.8% during the six months ended June 30, 2007, as compared to the same period in 2006. The increase in research and development expenses resulted primarily from a $2.6 million increase in expenses associated with Arbitron’s continued development of the next generation of its client software, a $2.1 million increase related to applications and infrastructure to support the PPM service, and a $1.5 million increase associated with various U.S. Media Service development costs. These increases were substantially offset by a $3.7 million decrease in expenses associated with PPM ratings costs that were classified as research and development in 2006 and as cost of revenue in 2007.

     Equity in net income of affiliates. Equity in net income of affiliates (relating collectively to Arbitron’s Scarborough joint venture and jointly-owned Project Apollo) decreased 50.2% for the six months ended June 30, 2007, as compared to the same period in 2006. The formalization of Project Apollo occurred during February 2007. The purpose of Project Apollo is to complete the development and testing of the Project Apollo marketing research service and the expansion of the pilot panel to a full national service if the test results meet expectations and generate marketplace support. Arbitron’s $1.8 million share of the Project Apollo loss for the six months ended June 30, 2007, is the primary cause of the $1.3 million decrease in the equity in net income of affiliates for the six months ended June 30, 2007, as compared to the same period of 2006. Arbitron expects that its equity in net income of affiliates will continue to be adversely impacted due to the costs incurred during the testing of the national marketing research service. If the decision is made to commercialize the national marketing panel service, there will be significant costs incurred to increase the size of the panel to a commercial level. These cost increases will be incurred in advance of receiving expected revenue from the service.

28

     Interest Income. Interest income decreased 31.1% during the six months ended June 30, 2007, as compared to the same period in 2006 due to lower average cash and short-term investment balances, which were partially offset by higher interest rates.

     Interest Expense. Interest expense decreased 89.8% for the six months ended June 30, 2007, as compared to the same period in 2006, due to Arbitron’s prepayment of its $50.0 million senior-secured notes obligation on October 18, 2006.

     Income Tax Expense. The income tax rate for the six months ended June 30, 2007 was 38.0% as compared to 37.5% for the same period of 2006. The effective tax rate, excluding certain immaterial discrete items, was increased from 37.2% for the six months ended June 30, 2006 to 37.7% for the six months ended June 30, 2007 to reflect the increase in certain nondeductible expenses.

     Net Income. Net income decreased 24.5% for the six months ended June 30, 2007, as compared to the same period in 2006, due primarily to planned expenses required to build Arbitron’s PPM panels for the Philadelphia and New York markets, and to support the strategic development of Arbitron’s PPM ratings business. Incremental expenses incurred in support of Arbitron’s diary ratings service also contributed to the decrease in net income, partially offset by a decrease in interest expense due to Arbitron’s prepayment of its senior-secured notes obligation on October 18, 2006.

     EBIT and EBITDA. Arbitron’s management believes that presenting EBIT and EBITDA, both non-GAAP financial measures, as supplemental information helps investors, analysts, and others, if they so choose, in understanding and evaluating Arbitron’s operating performance in some of the same manners that management does because EBIT and EBITDA exclude certain items that are not directly related to Arbitron’s core operating performance. Arbitron’s management references these non-GAAP financial measures in assessing current performance and making decisions about internal budgets, resource allocation and financial goals. EBIT is calculated by deducting net interest income from net income and adding back income tax expense to net income. EBITDA is calculated by deducting net interest income from net income and adding back income tax expense, and depreciation and amortization to net income. EBIT and EBITDA should not be considered substitutes either for net income, as indicators of Arbitron’s operating performance, or for cash flow, as measures of Arbitron’s liquidity. In addition, because EBIT and EBITDA may not be calculated identically by all companies, the presentation here may not be comparable to other similarly titled measures of other companies. EBIT decreased 26.6% and EBITDA decreased 21.8% for the six months ended June 30, 2007, as compared to the same period in 2006 due primarily to planned expenses required to build Arbitron’s PPM panels for the Philadelphia and New York markets, and to support Arbitron’s diary and PPM ratings services.

29

Liquidity and Capital Resources

     Working capital was $20.2 million and ($4.6) million as of June 30, 2007, and December 31, 2006, respectively. Excluding the deferred revenue liability, which does not require a significant additional cash outlay by Arbitron, working capital was $86.7 million and $62.3 million as of June 30, 2007, and December 31, 2006, respectively. Cash and cash equivalents were $32.4 million and $33.6 million as of June 30, 2007, and December 31, 2006, respectively. In addition, short-term investments were $38.9 million and $27.6 million as of June 30, 2007, and December 31, 2006, respectively. Management expects that Arbitron’s cash position, along with these readily convertible assets, as of June 30, 2007, and cash flow generated from operations and its available revolving credit facility, will be sufficient to support Arbitron’s operations for the foreseeable future.

     Net cash provided by operating activities was $19.7 million and $26.1 million for the six months ended June 30, 2007, and 2006, respectively. The $6.4 million decrease in net cash provided by operating activities was mainly attributable to a $8.0 million decrease in the change in accrued expenses and other current liabilities, and a $6.3 million decrease in net income resulting primarily from planned costs required to build Arbitron’s PPM panels for the commercialization rollout of the PPM service. These decreases in cash were partially offset by a $5.6 million increase due to the prior year increase in purchases of PPM international inventory, a $1.3 million decrease due to the timing of vendor payments and a $1.0 million net increase in depreciation and amortization due to increased capitalization of PPM equipment and related software, as well as software related to the accounts receivable and contract management system implemented during the second quarter of 2006. The decrease in the change in accrued expenses and other current liabilities resulted primarily from the timing of $4.7 million in expenditures for accrued payroll and benefit costs for the six months ended June 30, 2007, as compared to the same period of 2006; a $1.9 million fluctuation associated with the formation of the Project Apollo LLC in the six months ended June 30, 2007; and $1.1 million in lower taxes due to reduced earnings for the six months ended June 30, 2007, as compared to the same period of 2006.

     Net cash used by investing activities was $22.5 million for the six months ended June 30, 2007, and net cash provided by investing activities was $22.8 million for the six months ended June 30, 2006. The $45.3 million fluctuation in investing activities was driven primarily by $43.8 million in increased net purchases of variable-rate demand notes issued by municipal government agencies and auction-rate securities for the six months ended June 30, 2007, as compared to the same period of 2006. More short-term investments were purchased for the six months ended June 30, 2007 due to the excess cash available and on hand. During the same period of 2006, short-term investments were sold on a net basis to support the completion of the stock repurchase program authorized under the Company’s then outstanding $70.0 million stock repurchase program.

     Net cash provided by financing activities was $1.4 million for the six months ended June 30, 2007, and net cash used in financing activities was $68.6 million for the six months ended June 30, 2006. The $70.1 million fluctuation in financing activities was primarily attributable to $63.4 million in decreased repurchases of Arbitron’s outstanding common stock during the six months ended June 30, 2007, as compared to the same period of 2006. A $5.7 million increase in proceeds from stock option exercises was the result of higher average stock prices, as well as higher average exercise prices for the six months ended June 30, 2007, as compared to the same period of 2006.

     On December 20, 2006, Arbitron entered into an agreement with a consortium of lenders to provide up to $150.0 million of financing to Arbitron through a five-year, unsecured revolving credit facility (“2006 Credit Facility”). The agreement contains an expansion feature for Arbitron to increase the financing available under the 2006 Credit Facility up to $200.0 million. Interest on borrowings under the 2006 Credit Facility will be calculated based on a floating rate for a duration of up to six months as selected by Arbitron.

     Arbitron’s 2006 Credit Facility contains financial terms, covenants and operating restrictions that potentially restrict financial flexibility. Under the terms of the 2006 Credit Facility, Arbitron is required to maintain certain leverage and coverage ratios and meet other financial conditions. The agreement contains certain financial covenants and limits, among other things, Arbitron’s ability to sell assets, incur additional indebtedness, and grant or incur liens on its assets. Under the terms of the 2006 Credit Facility, all of Arbitron’s material domestic subsidiaries, if any, guarantee the commitment. Currently, Arbitron does not have any material domestic subsidiaries as defined under the terms of the 2006 Credit Facility. Although the management of Arbitron does not believe that the terms of its 2006 Credit Facility limit the operation of its business in any material respect, the terms of the 2006 Credit Facility may restrict or prohibit Arbitron’s ability to raise additional debt capital when needed or could prevent Arbitron from investing in other growth initiatives. Arbitron has been in compliance with the terms of the 2006 Credit Facility since its inception.

30

     On November 16, 2006, Arbitron announced that its Board of Directors authorized a program to repurchase up to $100.0 million of its outstanding common stock through either periodic open-market or private transactions at then-prevailing market prices through December 31, 2008. As of July 30, 2007, the number of shares of Arbitron’s outstanding common stock repurchased under this program was 293,400 shares for $14.4 million.

     Commercialization of the PPM radio ratings service and exploration of other strategic applications of the PPM technology, including the national marketing panel service, will require a substantial financial investment. Arbitron believes that during the PPM rollout period its costs and expenses will increase and substantial capital expenditures will be required. In addition, the management of Arbitron expects that, if the decision is made to commercialize the national marketing panel service, Arbitron’s expenses will increase as a result of continued deployment costs associated with the strategic development of its electronic ratings business and the national marketing panel service being developed through Project Apollo, which was jointly formed between Arbitron and Nielsen Media Research Inc. in February 2007.

     Arbitron believes that, while commercialization of the PPM ratings service and other strategic applications of the PPM technology, including the possible commercialization of the Project Apollo national marketing panel service, will have a near-term negative impact on its results of operations during the first three to four years of commercialization, which impact likely will be material, its operating margins can be restored through the completion of the PPM transition process in the top 50 radio markets, although there can be no assurance that this will be the case. If a decision is made to commercialize these services, substantial additional expenditures would be incurred during the next few years.

     Arbitron expects to fund the expected commercialization of the PPM radio ratings service, and the Project Apollo pilot program for the national marketing panel service with its existing cash position and short-term investments, future cash from operations or through the most advantageous source of capital at the time, which may include borrowings under its current credit facility, sales of common and preferred stock and/or joint-venture transactions. Arbitron believes that one or more of these sources of capital will be available to fund its PPM-related cash needs, but there can be no assurance that the external sources of capital will be available on favorable terms, if at all.

Seasonality

     Arbitron recognizes revenue for services over the terms of license agreements as services are delivered, and expenses are recognized as incurred. Arbitron gathers radio-listening data in 299 United States local markets. All markets are measured at least twice per year (April-May-June for the “Spring Survey” and October-November-December for the “Fall Survey”). In addition, all major markets are measured two additional times per year (January-February-March for the “Winter Survey” and July-August-September for the “Summer Survey”). Arbitron’s revenue is generally higher in the first and third quarters as a result of the delivery of the Fall Survey and Spring Survey, respectively, to all markets, compared to revenue in the second and fourth quarters, when delivery of the Winter Survey and Summer Survey, respectively, is only provided to major markets. Arbitron’s expenses are generally higher in the second and fourth quarters as the “Spring Survey” and “Fall Survey” are being conducted. The transition from the diary service to the PPM service in the top 50 markets will have an impact on the seasonality of revenue and costs and expenses. Although revenue in the top 50 markets is recognized ratably over the year in both the diary and PPM services, there will be fluctuations in the depth of the seasonality pattern during the periods of transition between the services in each market. The larger impact on the seasonality pattern is related to the costs and expenses to produce the services. PPM costs and expenses will accelerate six to nine months in advance of the commercialization of each market as the panel is built. These increased costs will be recognized as incurred rather than upon the delivery of a particular quarterly survey, and will vary from the cost pattern associated with the delivery of the diary service.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

     The Company holds its cash and cash equivalents in highly liquid securities. The Company also holds short-term investments, which consist of investment grade, highly liquid securities classified as available-for-sale. A hypothetical interest rate change of 1% would have an impact of approximately $0.3 million on interest income over a six-month period.

Foreign Currency Exchange Rate Risk

     Arbitron’s foreign operations are not significant at this time, and, therefore, Arbitron’s exposure to foreign currency risk is minimal.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

     The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s President and Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the most recently completed fiscal quarter. Based upon that evaluation, the Company’s President and Chief Executive Officer and the Company’s Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this Report.

Changes in Internal Control Over Financial Reporting

     There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarterly period ended June 30, 2007, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

32

PART II – OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

     On November 16, 2006, Arbitron announced that its Board of Directors authorized a program to repurchase up to $100.0 million of its outstanding common stock through either periodic open-market or private transactions at then-prevailing market prices over a period of two years through December 31, 2008. The following table outlines the stock repurchase activity during the three months ended June 30, 2007.

					Total Number		Maximum Dollar Value
					of Shares Purchased		of Shares That May
	Total Number of		Average Price		as Part of		Yet Be Purchased
	Shares		Paid		Publicly		Under the
Period	Purchased		Per Share		Announced Program		Program
April 1-30		62,000	$	48.15		62,000	$	97,014,395
May 1-31		37,100		48.96		37,100		95,198,046
June 1-30		7,500		49.80		7,500		94,824,516
Total		106,600	$	48.55		106,600	$	94,824,516

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Arbitron’s annual meeting of stockholders was held on May 15, 2007. There were 29,926,654 shares of Arbitron common stock outstanding and entitled to vote at the annual meeting. Of the 29,926,654 shares of Arbitron common stock entitled to vote at the annual meeting, a total of 26,855,891 shares were present in person or by proxy at the annual meeting. The following people designated by Arbitron’s Board of Directors as nominees for director were elected at the annual meeting, with the voting as follows:

Nominee	Votes For		Votes Withheld
Shellye L. Archambeau		26,328,529		527,362
Philip Guarascio		26,725,710		130,181
William T. Kerr		26,687,498		168,393
Larry E. Kittelberger		26,328,979		526,912
Stephen B. Morris		26,816,750		39,141
Luis G. Nogales		26,684,894		170,999
Richard A. Post		22,900,618		3,955,273

     The Amendment to the Arbitron Inc. 1999 Stock Incentive Plan was approved at the annual meeting, with the voting as follows:

Total Votes For	Total Votes Against		Total Votes Abstain
23,746,704		588,886		21,206

     No additional items were on the agenda of the annual meeting of stockholders and no other items were brought to a vote during the meeting .

33

ITEM 5. OTHER INFORMATION

     On May 15, 2007, the stockholders of Arbitron approved an amendment to the Company’s 1999 Stock Incentive Plan (the “Plan”), that increased the number of shares of common stock with respect to which awards may be granted under the Plan by 400,000 shares to a total of 4,604,009 shares.

     The foregoing description of the amendment to the Plan is qualified in its entirety by reference to the full text of the amended Plan, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.

ITEM 6. EXHIBITS

Exhibit No.	Description
Exhibit 10.1	Form of Radio Station License Agreement to Receive and Use Arbitron PPM Data and Estimates by and between Arbitron and Clear Channel Broadcasting, Inc. dated June 26, 2007*
Exhibit 10.2	Arbitron Inc. 1999 Stock Incentive Plan (as amended May 15, 2007)
Exhibit 31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* A request for confidential treatment has been submitted with respect to this exhibit. The copy filed as an exhibit omits the information subject to the request for confidential treatment.

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SIGNATURE

     Pursuant to the requirements 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.

ARBITRON INC.
By:	/s/ SEAN R. CREAMER
	Sean R. Creamer
	Executive Vice President of Finance and Planning and Chief Financial Officer (on behalf of the registrant and as the registrant’s principal financial and principal accounting officer)
Date: August 3, 2007

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EX-10.1

Exhibit 10.1

Portions of this exhibit have been omitted and filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Omissions are designated as [*****]

Radio Station License Agreement to Receive and
Use Arbitron PPM^TM Data and Estimates

Date of Proposal: June 12, 2007

THIS AGREEMENT is between Arbitron Inc., a Delaware corporation (“Arbitron”), and the undersigned radio broadcaster (“Station”), a Nevada corporation. Arbitron hereby grants to Station, for the radio station(s) listed below, a personal, nontransferable, nonexclusive, limited license to receive and use Arbitron data and audience estimates (“Arbitron Data” or “Data” or “PPM Data”) contained in Arbitron’s reports for the survey(s) and for the geographic area (“Market”) described in Section 1. Such Arbitron Data may be furnished to Station in printed, electronic or other form (“Reports”), at Arbitron’s option, but title thereto shall remain with Arbitron at all times. Arbitron hereby grants to Station, for the radio station(s) listed below, a personal, nontransferable, nonexclusive, limited license to receive and use the computer programs designated on the Agreement Attachments (“Systems”). Such Agreement Attachments are hereby incorporated by reference as if fully set forth herein. Title to the Systems shall remain with Arbitron, or its third party application provider, as the case may be, at all times. Collectively the Data, Reports, and/or Systems may be referred to as “Services”. As further consideration for the use of the Data and/or Systems, Licensee agrees to encode its audio-based and/or audio/video-based media content as set forth in a separate encoding agreement.

1. Services Provided; Term: This Agreement shall become effective when countersigned by Arbitron’s Contract Manager and shall be for a period of * years * months beginning and ending on the dates described below (the “Term”). This Agreement will continue without regard to Station’s ownership of the radio station(s) licensed hereunder absent a valid Assignment pursuant to Section 11 of this Agreement.

Broadcaster (“Station”): Clear Channel Broadcasting, Inc

For use only by radio station(s): *See “Schedule A” Attachment

Arbitron Radio Geographic Area (“Market”): *See “Schedule A” Attachment

Term begins * ; ends * .

Number of surveys currently provided during first Term year: * .

Reports currently licensed hereunder: þ January    þ February    þ March    þ April    þ May    þ June    þ July    þ August    þ September    þ October    þ November    þ December    þ Holiday Survey

First Report: *See “Schedule A” Attachment

All representations in this Section regarding number of surveys and Report titles are subject to qualifications set forth in Section 6(a) herein.

2. Annual Rate:

A License Charge in the form of a Net Annual Rate for each year of the Term, which may be subject to adjustments and discounts pursuant to Sections 3, 4, 6 and 11 of this Agreement, shall be paid by Station, with the first of * payments (the “Periodic Charge” or “Charge”) due on *.

The Gross Annual Rate for the first Term year is $ *See SchedA.

For each succeeding Term year, the Gross Annual Rate shall be the Gross Annual Rate for the previous Term year increased by a factor of * percent. Any applicable discounts or other adjustments will be applied thereafter to the Gross Annual Rate so derived.

3. Discounts:

(a) Continuous Service Discount: A discount of ten percent (10%) in calculating the Periodic Charge shall be allowed for each month in excess of twelve (12) consecutive months that Station is continuously licensed to use the Arbitron Data for this Market, provided that such discount shall no longer apply if Station fails to sign and return this Agreement to Arbitron within forty-five (45) days after termination of a prior “Station License Agreement to Receive and Use Arbitron Listening Estimates”, or individual market(s) licensed under such prior agreement, or this Agreement.

(b) Group Discount: If Station owns two or more radio stations located in different markets and such radio stations are under common ownership as defined by Arbitron, Station may be entitled to a Group Discount based on the number of subscribing radio stations owned at the time this Agreement is executed, which discount may vary and be adjusted during the Term of this Agreement in accordance with Arbitron’s Group Discount Schedule should the number of subscribing commonly owned radio stations change.

(c) Long-Term Discount: A discount of

[*****] in months 1-12,	[*****] in months 13-24,
[*****] in months 25-36,	[*****] in months 37-48,
[*****] in months 49-60.

shall be allowed in calculating the Net Annual Rate charged during the applicable months.

4. Periodic Charge; Taxes: The Periodic Charge, due and payable by Station on the first day of each billing period, shall be: (a) the Gross Annual Rate plus any adjustments; (b) less any applicable Continuous Service Discount; (c) less, from the amount thereby derived, any applicable Group Discount; (d) less, from the amount thereby derived any applicable Long-Term Discount; (e) with such amount prorated equally between the number of payments for the Term year.

In addition to and together with the above payments, Station shall pay to Arbitron any sales, excise, gross-receipts, service, use or other taxes, however designated, now or hereafter imposed upon or required to be collected by Arbitron by any authority having jurisdiction over the Market being surveyed or over any location to which Station directs Arbitron to deliver Data, or by any other taxing jurisdiction.

5. Late Payment Charge and Right to Suspend Report Delivery or Terminate License:

(a) A late payment charge of one and one-half percent (1.5%) per month will be charged on all Periodic Charges, as adjusted, which are not paid within 60 days after due hereunder, but in no event will the applicable per-month late payment charge exceed one-twelfth of the maximum annual percentage allowed to be charged by applicable state usury law. Any failure to impose a late payment charge shall not prejudice Arbitron’s right to do so should the default continue or should a subsequent payment not be made when due.

(b) In the event Station is in default in its payment obligations hereunder, and in addition to Arbitron’s right to impose a late payment charge, Arbitron may, with respect to this Agreement and/or any other agreement for Station’s use of services licensed by Arbitron in this Market or an adjacent market, and without terminating, breaching or committing a default under this Agreement or such other agreements: (i) accelerate or modify in any way the payment schedule of Periodic Charges for the duration of this Agreement or such other agreement(s)

^© 2007 Arbitron Inc.
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to a number of installments to be determined by Arbitron in its discretion; and/or (ii) suspend delivery to Station of any Data or Report(s), in any form, which are due until such time as Station is current in its payments of all sums due; and/or (iii) send Station written notice that Station’s license hereunder is suspended, in which case Station further expressly agrees that it thereafter shall not use Data and/or Reports and/or Systems previously received by Station until such time as Station becomes current in its payments of all sums due for services licensed by Arbitron. Acceleration by Arbitron under this provision shall not be deemed or considered a penalty but rather represents a good faith effort to quantify the harm that is reasonably related at the time of execution of the contract to Station’s failure to pay the License Charges for the entire term, as due under this Agreement.

(c) In the event Station is in default in its payment obligations under this Agreement or under any other agreement for Station’s use of services licensed by Arbitron in this Market or an adjacent market, then Arbitron may exercise any or all of its rights set forth in Section 5(b) of this Section 5 with respect to any such agreement entered into with Arbitron by Station or any of Station’s affiliated, subsidiary or related corporations or entities regardless of whether such other agreements are in default. For purposes of this Section 5(c), a corporation or entity shall be deemed to be affiliated with or related to Station if (i) such corporation or entity owns or controls more than a fifty percent (50%) interest in Station and/or it enters or has entered into any management agreement, joint operating agreement or other business relationship with Station; or (ii) Station owns or controls more than a fifty percent (50%) interest in such corporation or entity and/or it enters or has entered into any management agreement, joint operating agreement or other business relationship with such corporation or entity; or (iii) a third party owns or controls more than a fifty percent (50%) interest in, and/or enters or has entered into, any management agreement, joint operating agreement or other business relationship with both Station and such corporation or entity.

(d) Arbitron’s suspension hereunder of delivery of Data and/or Reports to Station, and of this License, shall not relieve Station of any of its obligations hereunder. Station further agrees to reimburse Arbitron for all collection costs and expenses (including reasonable attorneys’ fees) incurred hereunder. This license may be terminated immediately by Arbitron should Station or its station(s) default in payment of any sum due or should Station or its station(s) default in any other condition or obligation of this Agreement and/or any other agreement for Station’s use of services licensed by Arbitron.

6. Changes in Service; Modification of Rates:

(a) Arbitron reserves the right to change at any time the geographical territory comprising any Market, its policies and procedures, survey dates, survey length, survey frequency, sampling procedures, delivery schedules, methodology, method of Data or Report collection or delivery, provision of printed or electronic copies of Reports, Report content, Report titles, Report format, or any other aspect of the Data, Reports, and/or Systems provided hereunder, and to cancel surveys and the preparation of Arbitron Data and Reports or any other aspect of the Data services provided.

Arbitron reserves the right not to publish any Data or Reports whenever, in its judgment, insufficient data are available to meet its minimum research standards or any event has jeopardized the reliability of the data. In the event that Data and/or Reports are not published, Station shall receive a credit reflecting the pro rata value of the Net Annual Rate for said Data and/or Report(s). Without limiting the foregoing, Station expressly understands and agrees that Arbitron may, at any time during the Term of this Agreement, reduce the number of surveys conducted and/or Reports published for any Market and consequently reduce the number of Reports provided to Station and that, in the event such reduction occurs, Station is not relieved of any of its obligations under this Agreement.

(b) In the event that any cause(s) prevents Arbitron from conducting any survey in accordance with its methodology, schedules or other publications, Arbitron reserves the right to publish abbreviated Report(s). Station hereby consents to publication of such abbreviated Report(s) under such circumstances. In the event that such an abbreviated Report covers a substantially decreased geographic area, or deletes twenty-five percent (25%) or more of the survey days from the aggregate number of days scheduled, Station shall be entitled to either a proportionate credit for the abbreviated Report, or, upon written certification provided to Arbitron within ten (10) days of receipt of such report, that all copies of such abbreviated report have been destroyed and that Station will not use such abbreviated report, a full credit for the abbreviated Report, at Station’s option, provided however, that if Station elects to destroy an abbreviated Report and receive full credit, Station shall no longer be licensed to use that Report during the remainder of the Term of this Agreement. Further, Arbitron reserves the right in its sole discretion to augment available data by means of expanded or extended samples and Station agrees it shall not be entitled to any credit in such event.

(c) Arbitron may increase the Gross Annual Rate hereunder at any time. If Arbitron increases the Rate for a reason other than as permitted elsewhere in this Agreement, it shall give prior written notice to Station. Station may, within a 30-day period following such notice, cancel the unexpired Term of the Agreement for only the Data and/or Reports and/or Services and Market for which Arbitron has increased its Rate pursuant to such notice, by written notice pursuant to Section 15(a), without cancellation charge or other cost, effective on the date the new Gross Annual Rate would have become effective. In the absence of such timely cancellation, this Agreement shall continue and the new Gross Annual Rate shall become payable as stated in Arbitron’s notice and thereafter.

7. Permitted Uses and Confidentiality: Subject to the restrictions stated herein and to the permitted uses set forth in Arbitron’s publication entitled Working with Arbitron’s Copyrighted Estimates available to all Arbitron licensees and posted on Arbitron’s Web site at www.arbitron.com, Station agrees to limit its uses of the Arbitron Data and Report(s) to its programming and media selling and for the purposes of internal business analysis. Station understands and agrees that this use is limited exclusively to the radio station(s) specified in Section 1 of this Agreement and only for the Term of this Agreement. In this connection, Station agrees that the Arbitron Data and/or Report(s) will only be disclosed:

(a) directly or through its Station representatives to advertisers, prospective advertisers and their agencies for the purpose of obtaining and retaining advertising accounts; and

(b) through advertising or other promotional literature as permitted hereunder.

All such disclosures shall identify the Data as PPM data and identify Arbitron as the source of the disclosed Arbitron PPM audience Data and/or Report(s) and should identify the Market, survey period and type of audience estimate, daypart and survey area and shall state that the Arbitron Data and/or Report(s) quoted therein are copyrighted by Arbitron and are subject to all limitations and qualifications disclosed in the Data and/or Report(s) (“Sourcing”).^* At all times during the Term of this Agreement and thereafter, Station agrees to keep the Arbitron Data and/or Report(s) and/or Services confidential and not to disclose the same except as permitted by this Agreement. Station agrees to use its best efforts to prevent the unauthorized disclosure of Arbitron Data and/or Report(s) and/or Services by Station’s employees and/or its radio station(s)’s employees and agents, by its radio station(s)’s representatives, by its advertisers and their advertising agencies, by data processing firms, and by all other persons who obtain the Arbitron Data and/or Reports and/or Services from Station or its radio station(s)’s employees or agents. For Station or its radio station(s) to divulge any Arbitron Data and/or Report(s) and/or Services to a nonsubscribing station or to lend and/or give an original copy or any reproduction of any part of any Data and/or Report(s) and/or Services or any Arbitron Data and/or Reports and/or Services to any person or entity not

^* Station(s) should refer to current regulations and guidelines of the federal government for further requirements concerning the manner of quoting audience estimates.

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authorized by this Agreement constitutes a breach of this Agreement and an infringement of Arbitron’s and/or its third party data and/or service provider’s copyright.

Station acknowledges that all logos, trade names, trademarks or service marks and other such intellectual property, are the sole and exclusive property of Arbitron and, where indicated, of other entities. Station agrees it shall not use any such intellectual property without the express written consent of its owner.

In the event that a Report listed in Section 1 of this Agreement is delivered after the expiration of the Term of this Agreement, Station’s license to use that Report shall continue under the terms and conditions of this Agreement until the earlier of: (i) the release of the next survey Report in the applicable licensed Market, or (ii) six (6) months after release of the Report.

Station may authorize a third party to process the Data licensed hereunder on Station’s behalf, provided: (1) that said third party is a then current Arbitron licensee in good standing who is authorized to process the Data and (2) that all restrictions concerning the use of the Data provided under this Agreement shall apply with full force and effect to any data, estimates, reports or other output, in any form, containing or derived from the Data, produced by said third party for Station.

8. Confidentiality of Arbitron Survey Participants: Station agrees that it will not try either before, during or after a survey, or in connection with any litigation, to determine or discover the identity or location of any Arbitron survey participant. Station will under no circumstances directly or indirectly attempt to contact any such persons. Station agrees to promptly report to Arbitron any evidence or indication that has come to Station’s attention regarding the identity or location of any such persons. Station agrees to abide by Minimum Standard A9 (or any successor provision concerning confidentiality of survey respondents) of the Media Rating Council and shall abide by any determination of the Media Rating Council concerning survey participant confidentiality. Station further agrees that Arbitron may enjoin any breach of the above-stated obligations and shall have the right to damages or other remedies (including costs, expenses and reasonable attorneys’ fees) available to it at law or hereunder.

9. Methodology: ARBITRON MAKES NO WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS, CONCERNING THE SERVICES PROVIDED HEREUNDER, INCLUDING BUT NOT LIMITED TO:

(A) DATA GATHERED OR OBTAINED BY ARBITRON FROM ANY SOURCE;

(B) THE PRESENT OR FUTURE METHODOLOGY EMPLOYED BY ARBITRON IN PRODUCING ARBITRON DATA AND/OR REPORT(S) AND/OR SERVICES; OR

(C) THE ARBITRON DATA AND/OR REPORT(S) AND/OR SERVICES LICENSED HEREUNDER.

ALL ARBITRON DATA AND/OR REPORT(S) REPRESENT ONLY THE OPINION OF ARBITRON. RELIANCE THEREON AND USE THEREOF BY STATION IS AT STATION’S OWN RISK.

THE SYSTEMS PROVIDED HEREUNDER ARE PROVIDED TO STATION “AS IS – WHERE IS” AND RELIANCE THEREON AND USE THEREOF BY STATION IS AT STATION’S OWN RISK.

IN NO EVENT SHALL ARBITRON BE LIABLE FOR THE FAILURE OF ANY THIRD PARTY TO PROVIDE ANY DATA OR SERVICES FOR USE IN CONNECTION WITH THE DATA, REPORTS, SYSTEMS AND/OR SERVICES LICENSED HEREUNDER.

10. Liabilities and Limitations of Remedies: THE SOLE AND EXCLUSIVE REMEDY, AT LAW OR IN EQUITY, FOR ARBITRON’S AND/OR ANY THIRD PARTY DATA AND/OR SERVICE PROVIDER’S BREACH OF ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS, AND THE SOLE AND EXCLUSIVE REMEDY FOR ARBITRON’S AND/OR ANY THIRD PARTY DATA AND/OR SERVICE PROVIDER’S LIABILITY OF ANY KIND, INCLUDING WITHOUT LIMITATION LIABILITY FOR NEGLIGENCE OR DELAY WITH RESPECT TO THE ARBITRON DATA AND/OR REPORTS AND/OR SERVICES AND ALL PERFORMANCE PURSUANT TO THIS AGREEMENT, SHALL BE LIMITED TO A CREDIT TO STATION OF AN AMOUNT EQUAL TO, AT THE MAXIMUM AMOUNT, THE LICENSE CHARGE PAID BY STATION WHICH IS ATTRIBUTABLE TO THE MATERIALLY AFFECTED DATA OR REPORT OR SERVICES. IN NO EVENT SHALL ARBITRON AND/OR ANY THIRD PARTY DATA AND/OR SERVICE PROVIDER BE LIABLE FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, NOR SHALL THEY BE SUBJECT TO INJUNCTIVE RELIEF WITH RESPECT TO THE PUBLICATION OF ANY DATA AND/OR REPORT AND/OR SERVICE. STATION UNDERSTANDS THAT THE DATA AND/OR REPORTS AND/OR SERVICE EITHER WOULD NOT BE PREPARED OR WOULD BE AVAILABLE ONLY AT A SUBSTANTIALLY INCREASED LICENSE CHARGE WERE IT NOT FOR THE LIMITATIONS OF LIABILITIES AND REMEDIES AS SET FORTH IN THIS SECTION.

Station agrees that it will notify Arbitron in writing of any alleged defect in any Data and/or Report and/or System within thirty (30) days after Station learns of said alleged defect. In the event that Station does not timely notify Arbitron, then Station waives all rights with regard to said alleged defect. Station further agrees that any action to be brought by it concerning any Data and/or Report and/or System shall be brought not more than one (1) year after such Data or Report was originally published by Arbitron.

In the event that either party commences litigation against the other party and fails to ultimately prevail on the merits of such litigation, the commencing party shall reimburse and indemnify the other party from any and all costs and expenses incurred with respect to such litigation, including reasonable attorneys’ fees, provided, however, that this sentence shall not apply where Arbitron commences litigation pursuant to Sections 5, 7 or 8 of this Agreement. This provision shall survive the termination of this Agreement.

11. Assignments and Changes in Station Status: Station may not assign either its rights or obligations under this Agreement without the prior written consent of Arbitron. Subject to Arbitron’s consent, a successor-in-interest by merger, operation of law, assignment, purchase or otherwise of the entire business of Station shall acquire all rights and be subject to all obligations of Station hereunder. In the event that Arbitron consents to the assignment of this Agreement, Arbitron reserves the right to redetermine the rate to be charged to the assignee in accordance with the terms of this Agreement. Arbitron shall be entitled to assign any of its rights or obligations under this Agreement, including the right to receive License Charges payable hereunder.

Station acknowledges and agrees that the License Charge due and the adjustments and discounts applied hereunder are based on Station’s group ownership status and/or any joint operating agreement with one or more other radio stations and/or Station’s ownership of radio stations in this Market or other Markets. In the event Station conveys any one of its radio stations, Station remains fully obligated for the License Charge specified for any radio station covered by the terms of this Agreement. Station may only be released from such obligations upon valid assignment of this Agreement and subject to the terms thereof. Station agrees that if at any time it changes or has changed its ownership, operating or sales policy (including, but not limited to, the use of digital subchannels and Internet streaming), frequency, broadcasting arrangements, group or business relationships of the station(s) licensed under this Agreement, or if it enters or has entered into any management or other business relationship with another radio station in any Market and/or its adjacent Market(s), or if it enters or has entered into any joint operating agreement with one or more other radio stations, or if it is or was purchased or controlled by an entity owning or otherwise controlling other radio stations in any Market and/or its adjacent Market(s), or if it purchases, or an entity which is in any manner controlled by it purchases, at any time, another radio station in any Market or its adjacent Market(s), Station and its radio station(s) will report the change and the effective date thereof to Arbitron within

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twenty (20) days of such change. In the event of such occurrence, Station agrees that such station(s) shall be licensed under this Agreement and that Arbitron may redetermine the Gross Annual Rate for the Data, Reports, and/or Services pursuant to the then current Arbitron rate card in order to license such additional station(s), effective the first month following the date of the occurrence. Notwithstanding Station’s failure to notify Arbitron, pursuant to the provisions of this Section 11, Arbitron may redetermine Station’s Gross Annual Rate for all Data, Reports, and/or Services, based on the foregoing, effective the first month following the date of the occurrence.

Station further agrees that if the parent company or other controlling entity of Station, or any entity in any manner related to Station, purchases or otherwise acquires a controlling interest in a radio station in Station’s Market that is not licensed by Arbitron for the same Data, Reports and/or Services, then Arbitron may redetermine Station’s Gross Annual Rate based on such occurrence as described in this Section 11.

In the event Arbitron increases Station’s Gross Annual Rate as a result of an occurrence as described in this Section, then Arbitron shall amend this Agreement to permit use of the Data, Reports and/or Services by the additional radio station(s) prompting the increase.

12. Other Arbitron Services and Reports: If, during the Term of this Agreement, Station orders any Arbitron services or report(s) not licensed through any other Arbitron agreement, Station hereby agrees that this Agreement shall be applicable with respect to all such services and/or reports with the same force and effect as if printed out at length in a separate agreement executed by Station.

13. Ratings Distortion Activity:

(a) Station agrees that it shall not engage in any activities which are determined by Arbitron to be ratings distortion. Such prohibited activities may include, but are not limited to, activities which could:

(i) cause any survey participant to misrepresent to Arbitron demographic composition of any member of the household in which he or she resides; or

(ii) cause any survey participant to surrender control of his or her PPM meter to any party determined by Arbitron to be media-affiliated; or

(iii) constitute use of Arbitron’s encoded signal for purposes unauthorized by Arbitron; or

(iv) cause the identity of a PPM panelist to become known other than to Arbitron; or

(v) could cause participation in the survey by a media-affiliated individual

(b) Station further agrees that Arbitron may delete all estimates of listening to Station and/or its radio station(s) from any Data, Reports, computer media and/or other Arbitron service or method of delivery where, in its judgment it has deemed that Station or its radio station(s) has engaged in such activities. Arbitron shall:

(i) first give Station and its radio station(s) notice setting forth what activities it deems Station and its radio station(s) have engaged in which allegedly could cause or have caused ratings distortion;

(ii) present evidence to substantiate the allegations set forth in (i) above; and

(iii) give Station and its radio station(s) reasonable opportunity (in light of Arbitron’s publication schedule for any Report) to present its position both in writing and orally.

In the event that Station or its radio station(s) is notified by Arbitron that allegations of ratings distortion have been made against Station or its radio station(s), then Station or its radio station(s) shall submit a written response to Arbitron’s inquiry concerning the allegations within seven (7) days from the receipt of Arbitron’s notice, which time may be shortened by Arbitron for reasons relating to the Report publication schedule. Arbitron shall then advise Station or its radio station(s) of its decision following its receipt of Station’s or its radio station(s)’ written response or oral presentation. All such writings shall be addressed and sent to the respective party by facsimile, overnight courier service, or certified mail with return receipt requested. In the event that estimates of listening to Station and/or its radio station(s) are deleted from a Report(s) (and/or other Arbitron services) following the procedure set forth above, Station and its radio station(s) agree that the only remedy for such deletion shall be a credit of the License Charge paid by Station for such Report(s) or other affected services and that in no event shall Arbitron be liable for special, incidental, consequential or punitive damages or be subject to injunctive relief with respect to any such deletion of estimates of listening to Station and/or its radio station(s). In the event that estimates of listening to Station and/or its radio stations are deleted from a Report pursuant to this Section, Arbitron agrees that it will give Station and its radio station(s) an opportunity to submit to Arbitron a written statement (not exceeding 200 words) of Station’s and/or its radio station(s)’s views concerning its alleged activities, with such written statement to be published in the Report subject to such reasonable editing deemed necessary by Arbitron. In addition, Station and its radio station(s) agree to abide by the Arbitron policies and procedures governing various special station activities, including, but not limited to, rating bias.

14. Information to be Provided by Station and Its Radio Station(s): Station and its radio station(s) agree to provide to Arbitron, within ten (10) days of receipt of Arbitron’s request, such information which Arbitron deems necessary for the publication of a Report, including, but not limited to, accurate descriptions of the following information for Station and its radio station(s): (a) facilities; (b) broadcast station names; (c) broadcast hours; (d) simulcast hours; (e) simulcast partners; (f) radio frequency; (g) operating power; (h) format; (i) height of antenna above average terrain; (j) broadcasts by digital subchannels; (k) Internet streaming; and (l) programming information. Station and its radio station(s) further understand and agree to notify Arbitron of any changes to the above-referenced information. Station and its radio station(s) hereby hold Arbitron harmless and agree to indemnify Arbitron from and against any and all loss, cost or expense (including reasonable attorneys’ fees) arising out of any omission or error in information provided, or the failure to provide such information to Arbitron by Station and its radio station(s) pursuant to this Section.

15. General:

(a) All notices to either party shall be in writing and shall be directed to the addresses stated hereafter unless written notice of an address change has been provided.

(b) This Agreement shall be deemed to be an agreement made under, and to be construed and governed by, the laws of the State of New York, exclusive of its choice of law rules. The parties expressly agree that any and all disputes arising out of or concerning this Agreement or the Arbitron Data or Reports licensed hereunder shall be litigated and adjudicated exclusively in State and/or Federal Courts located in either the State of New York or the State of Maryland, at Arbitron’s option, and each party consents to and submits to both such jurisdictions.

(c) This Agreement, together with any Agreement Attachments, constitutes the entire agreement between the parties concerning the subject matter hereof, notwithstanding any previous discussions and understandings; and shall not be deemed to have been modified in whole or in part except by written instruments signed hereafter by officers of the parties or other persons to whom the parties have delegated such authority.

(d) Any litigated question regarding the legality, enforceability or validity of any section or part hereof shall not affect any other section, and if any section or part hereof is ultimately determined illegal, invalid, unconstitutional or unenforceable, that section or part hereof shall be severed from this Agreement and the balance of the Agreement shall thereafter remain in full force and effect for the remainder of the Term.

(e) Arbitron may terminate this Agreement on written notice to Station, effective immediately, in the event that, for any reason, the Services

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contemplated hereunder are not produced by Arbitron or if Arbitron ceases to produce such Services, without penalty and without liability of any kind to Station. In the event of a termination by Arbitron as provided in this paragraph, Station shall receive a pro-rata refund of any License Charges paid and for which the corresponding Services were not delivered.

(f) In addition to the rights of termination stated elsewhere in this Agreement, this Agreement, and the license provided hereunder, may be terminated by Arbitron for any or all of the Data, Reports and/or services in any or all of the Markets in which they are licensed, for any reason, on thirty (30) days’ written notice to Station. Station agrees that this Agreement shall continue for the markets and services not named in such notice.

(g) The provisions governing payment of taxes, confidentiality of the Data, Reports, and Systems, limitation of liabilities, applicable law, waiver of jury trial, and confidentiality of survey participants shall survive the termination of this Agreement.

(h) The failure of Arbitron to enforce any of the provisions of this Agreement shall not be construed to be a waiver of such provisions unless evidenced by an instrument in writing duly executed by Arbitron.

(i) Waiver of Jury Trial: EACH PARTY, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUES, DEMANDS, ACTIONS, CAUSES OF ACTION, CONTROVERSIES, CLAIMS OR DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER MATTER INVOLVING THE PARTIES HERETO.

(j) This Agreement supersedes Station’s “Master Station License to Receive and Use Arbitron Data and Radio Audience Estimates” for the relevant market(s) under such previous agreement which are replaced by the market(s) set forth in Section 1 of this Agreement. Station hereby agrees to cease using, upon publication of the PPM Data and/or Reports provided under this Agreement, any data and/or reports provided under such previous agreement for such affected market(s). Station acknowledges that such previous agreement remains in effect for all other markets other than the affected market(s) under such previous agreement. For all market(s) in which Station currently subscribes to an Arbitron service, Station agrees to subscribe to PPM Data and/or Reports in those market(s) upon the publication of the PPM Data and/or Reports in such market(s) at the then current Arbitron rate card.

In the event that Arbitron produces pre-currency/transition PPM reports in market(s) prior to releasing the official PPM currency report in such PPM market(s), such pre-currency/transition reports will be licensed at the then current diary-based rates applicable to Station for each such market(s) for the relevant survey periods. Station agrees to license such pre-currency/transition PPM reports at the then-current diary-based rates applicable to Station in such market(s) for the relevant survey periods. Further, Station agrees to use such pre-currency/transition PPM reports solely for internal business analysis and expressly not in connection with any commercial media buying and selling transaction process.

(k) Station hereby expressly consents to: (i) Arbitron sending to Station information advertising the various services that Arbitron provides, whether or not such services are provided under this Agreement, via electronic messaging to include, but not limited to, e-mail, facsimile and text messages, and (ii) use of Station’s name and/or call letters in Arbitron customer lists, promotional materials and/or press releases.

AGREED TO:
Clear Channel Broadcasting, Inc.
BROADCASTER (“STATION”)
*See “Schedule A” Attachment
FOR USE ONLY BY STATION(S)
200 E Basse Road
ADDRESS
San Antonio	TX		78209
CITY	STATE	ZIP
/S/ JOHN HOGAN
BY (AUTHORIZED SIGNATURE)
John Hogan
NAME (TYPE OR PRINT NAME OF PERSON SIGNING ABOVE)
President, CEO
TITLE	DATE

ACCEPTED BY:

/S/ GREG STEPHAN

CONTRACT MANAGER

6/26/07

DATE

Arbitron Inc.

9705 Patuxent Woods Drive

Columbia, Maryland 21046-1572

Arbitron RSS — PPM Radio Station License Agreement 4/07 Initials here

5

Exhibit 10.1

Exhibit 10.1

Portions of this exhibit have been omitted and filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Omissions are designated as [*****]

Attachment to Radio Station License Agreement to Receive and Use Arbitron PPMTM Data and Estimates Date Prepared:June 12, 2007This is an Attachment to the Radio Station License Agreement to Receive and Use Arbitron PPMTM Data and Estimates (the “Basic License Agreement”) datedJune 12, 2007 between Arbitron Inc., a Delaware corporation (“Arbitron”) andClear Channel Broadcstg.(“Station”), and is for the term and Services specified below. The license granted for the Services specified herein is expressly subject to the Basic License Agreement, and any terms and conditions stated below, or on the next page hereof. Station agrees to license the following Services from Arbitron and to pay License Charges as set forth herein and in the Basic License Agreement. For use only by: See “Schedule A” Attachment (Pre currency attachment: Net Rates only apply, all discounts included) Ship to Address(es): *See “Schedule A” AttachmentBill to Address: *See “Schedule A” AttachmentData Services Ordered Data LicensedNew, Renew, Replace-mentLicense Start/ End DatesRate Yr 1Rate Yr 2Rate Yr 3Rate Yr 4Rate Yr 5Rate Yr 6Rate Yr 7% of Annual License ChargeArbitron PPMTM DataPPM ArbitrendsSM DataProcessor(s) is/are MultiMedia DataProcessor(s) is/are Corporate Roll-UpSM with Arbitron PPMTM DataEthnic Data: Hispanic Black New New National Regional Database (NRD) with Arbitron PPMTM DataOther: PreCur NetNew*See ScheduleA*Other: Calculation of License Charges: Individual Station Gross Annual Rate:Percent:Station:*See Schedule A $*See SchedA*Station: $Station: $Station: $Station: $Station: $Station: $Station: $Station: $

First Term Year Gross Annual Rate (Combined): $*See SchedALESS DISCOUNTS FOR Arbitron PPMTM Data (Per Section 3): Continuous Service (10%): $*See SchedA Group (at beginning of Term) 10% 7.5% 5% 2.5% $*See SchedA Long-Term Discount: % in months $*See SchedAFIRST TERM YEAR NET ANNUAL RATE: $*See SchedAStation further understands and agrees that the Net Annual Rate payable during any Term year subsequent to the first Term year will vary in accordance with an applicable Group Discount, any other applicable discount, or any adjustment as specified in Sections 2, 3, 4, 6 and 11 of the Basic License Agreement. Software Services Ordered Software LicensedNew, Renew, Replace-mentLicense Start/ End DatesRate Yr 1Rate Yr 2Rate Yr 3Rate Yr 4Rate Yr 5Rate Yr 6Rate Yr 7% of Annual License ChargeTapscan^® Systems:Includes: Tapscan MediaMaster Qualitap PrintScan MStreet ScheduleIt RSP PPM Analysis ToolSMOther: Other: Data Delivery: Arbitron Downloader Software Delivery: Arbitron DownloaderTRAINING/CONSULTING: Total Training/Consulting Days:*@ $*/ day or*@ $*/ half day =*Billing Options Billing Options Billing Dates First Invoice Due Service OrderedSurveys/Releases Included (First/Last) Annually            Monthly Quarterly *See Schedule A*See Schedule A*See Schedule A*See Schedule A Annually            Monthly Quarterly Annually            Monthly Quarterly Annually             Monthly Quarterly Annually            Monthly Quarterly

RSS — PPM RADIO ATTACH. 3/07

7

Terms and Conditions

Any use of a computer system that processes Arbitron Data and/or Reports requires a valid license for such Data and/or Reports.

Incorporation of Basic License Agreement:

(a) All terms and conditions of the Basic License Agreement are hereby incorporated herein by reference with the same force and effect as if printed at length herein and are applicable to any Service(s) provided hereunder.

(b) In order to receive a license to and access to any Service, Station must be licensed pursuant to the Basic License Agreement.

In the event the Basic License Agreement terminates, expires or becomes suspended for any reason, this Agreement and License(s) shall terminate, expire or become suspended concurrently therewith.

Mode of Use:

Where use of a computer is necessary to access, receive and use any Services licensed under this Agreement, Station will obtain, from a vendor of its choice, computer equipment and an operating system conforming to the minimum specifications. Station acknowledges that if such conforming equipment and systems are not obtained, the Services may not operate properly.

Interruptions:

Station agrees that Arbitron is not responsible for computer, Internet and/or telephonic communications interrupted by any Services system failure, telephonic disruptions, weather, acts of God, force majeure or acts of third persons not connected with or controlled by Arbitron; nor for any additional expenses incurred by Station for subsequent and/or additional computer runs necessitated by such disruptions or interruptions.

Restrictions on Station’s Use:

(a) Station agrees that it will not provide, loan, lease, sublicense or sell in whole or in part the Arbitron Data and/or Reports and/or Systems, or computer software programs or data included with such Data and/or Reports and/or Systems, to any other party or entity in any form. This restriction extends to, but is not limited to, any and all organizations selling or buying time to or from Station and any and all organizations providing data processing, software or computer services to Station.

(b) Station agrees that it will not use the Arbitron Data and/or Reports under the control of computer programs written by its employees, agents or others except as permitted by the Basic License Agreement. Arbitron makes no commitment to disclose to others the structure, format, access keys or other technical particulars of the Arbitron Data and/or Reports and/or Systems.

Special Terms or Instructions: *See “Schedule A” Attachment

Account Manager:

Account #:

AGREED TO:
*SEE “SCHEDULE A” ATTACHMENT
STATION
200 E Basse Road
ADDRESS
San Antonio	TX		78209
CITY	STATE	ZIP
/S/ JOHN HOGAN
BY (AUTHORIZED SIGNATURE)
John Hogan
NAME (TYPE OR PRINT NAME OF PERSON SIGNING ABOVE)
President, CEO
TITLE	DATE

ACCEPTED BY:

/S/ GREG STEPHAN

CONTRACT MANAGER

6/26/07

DATE

Arbitron Inc.

9705 Patuxent Woods Drive

Columbia, Maryland 21046-1572

                                        
Initials here

2

Exhibit 10.1

Exhibit 10.1 Portions of this exhibit have been omitted and filed separately pursuant to an application for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Omissions are designated as [*****] Attachment to Radio Station License Agreement to Receive and Use Arbitron PPMTM Data and Estimates Date Prepared:June 12, 2007This is an Attachment to the Radio Station License Agreement to Receive and Use Arbitron PPMTM Data and Estimates (the “Basic License Agreement”) datedJune 12, 2007 between Arbitron Inc., a Delaware corporation (“Arbitron”) andClear Channel Broadcstg.(“Station”), and is for the term and Services specified below. The license granted for the Services specified herein is expressly subject to the Basic License Agreement, and any terms and conditions stated below, or on the next page hereof. Station agrees to license the following Services from Arbitron and to pay License Charges as set forth herein and in the Basic License Agreement. For use only by: See “Schedule A” Attachment (Currency attachment: Gross annual rate = 10 month term (1st 10 mo currency)) Ship to Address(es): *See “Schedule A” AttachmentBill to Address: *See “Schedule A” AttachmentData Services Ordered Data LicensedNew, Renew, Replace-mentLicense Start/ End DatesRate Yr 1Rate Yr 2Rate Yr 3Rate Yr 4Rate Yr 5Rate Yr 6Rate Yr 7% of Annual License ChargeArbitron PPMTM DataNew*See ScheduleAPPM ArbitrendsSM DataNew*See ScheduleAProcessor(s) is/are *See ScheduleA MultiMedia DataProcessor(s) is/are Corporate Roll-UpSM with Arbitron PPMTM DataNew*See ScheduleAEthnic Data: Hispanic Black New New National Regional Database (NRD) with Arbitron PPMTM DataNew*See ScheduleA Other: PreCur NetNew*See ScheduleA*Other: Calculation of License Charges: Individual Station Gross Annual Rate:Percent:Station:*See Schedule A $*See SchedA*Station: $Station: $Station: $Station: $Station: $Station: $Station: $Station: $ First Term Year Gross Annual Rate (Combined): $*See SchedALESS DISCOUNTS FOR Arbitron PPMTM Data (Per Section 3): Continuous Service (10%): $*See SchedA Group (at beginning of Term) [*****] 7.5% 5% 2.5% $*See SchedA Long-Term Discount: [*****]% in months 2-12 $*See SchedAFIRST TERM YEAR NET ANNUAL RATE: $*See SchedA

Station further understands and agrees that the Net Annual Rate payable during any Term year subsequent to the first Term year will vary in accordance with an applicable Group Discount, any other applicable discount, or any adjustment as specified in Sections 2, 3, 4, 6 and 11 of the Basic License Agreement. Software Services Ordered Software LicensedNew, Renew, Replace-mentLicense Start/ End DatesRate Yr 1Rate Yr 2Rate Yr 3Rate Yr 4Rate Yr 5Rate Yr 6Rate Yr 7% of Annual License ChargeTapscan^® Systems:Renew*SeeSchedA*****Includes: Tapscan MediaMaster Qualitap PrintScan MStreet ScheduleIt RSP PPM Analysis ToolSMNew*SeeSchedA*****Other: New*SeeSchedA*****Other: Data Delivery: Arbitron Downloader Software Delivery: Arbitron DownloaderTRAINING/CONSULTING: Total Training/Consulting Days:*@ $*/ day or*@ $*/ half day =*Billing Options Billing Options Billing Dates First Invoice Due Service OrderedSurveys/Releases Included (First/Last) Annually            Monthly Quarterly *See Schedule A*See Schedule A*See Schedule A*See Schedule A Annually            Monthly Quarterly Annually            Monthly Quarterly Annually             Monthly Quarterly Annually            Monthly Quarterly

                                        
Initials here

2

Terms and Conditions

Any use of a computer system that processes Arbitron Data and/or Reports requires a valid license for such Data and/or Reports.

Incorporation of Basic License Agreement:

(c) All terms and conditions of the Basic License Agreement are hereby incorporated herein by reference with the same force and effect as if printed at length herein and are applicable to any Service(s) provided hereunder.

(d) In order to receive a license to and access to any Service, Station must be licensed pursuant to the Basic License Agreement.

In the event the Basic License Agreement terminates, expires or becomes suspended for any reason, this Agreement and License(s) shall terminate, expire or become suspended concurrently therewith.

Mode of Use:

Where use of a computer is necessary to access, receive and use any Services licensed under this Agreement, Station will obtain, from a vendor of its choice, computer equipment and an operating system conforming to the minimum specifications. Station acknowledges that if such conforming equipment and systems are not obtained, the Services may not operate properly.

Interruptions:

Station agrees that Arbitron is not responsible for computer, Internet and/or telephonic communications interrupted by any Services system failure, telephonic disruptions, weather, acts of God, force majeure or acts of third persons not connected with or controlled by Arbitron; nor for any additional expenses incurred by Station for subsequent and/or additional computer runs necessitated by such disruptions or interruptions.

Restrictions on Station’s Use:

(a) Station agrees that it will not provide, loan, lease, sublicense or sell in whole or in part the Arbitron Data and/or Reports and/or Systems, or computer software programs or data included with such Data and/or Reports and/or Systems, to any other party or entity in any form. This restriction extends to, but is not limited to, any and all organizations selling or buying time to or from Station and any and all organizations providing data processing, software or computer services to Station.

(b) Station agrees that it will not use the Arbitron Data and/or Reports under the control of computer programs written by its employees, agents or others except as permitted by the Basic License Agreement. Arbitron makes no commitment to disclose to others the structure, format, access keys or other technical particulars of the Arbitron Data and/or Reports and/or Systems.

Special Terms or Instructions: *See “Schedule A” Attachment

Account Manager:

Account #:

AGREED TO:
*SEE “SCHEDULE A” ATTACHMENT
STATION
200 E Basse Road
ADDRESS
San Antonio	TX		78209
CITY	STATE	ZIP
/S/ JOHN HOGAN
BY (AUTHORIZED SIGNATURE)
John Hogan
NAME (TYPE OR PRINT NAME OF PERSON SIGNING ABOVE)
President, CEO
TITLE	DATE

ACCEPTED BY:

/S/ GREG STEPHAN

CONTRACT MANAGER

6/26/07

DATE

Arbitron Inc.

9705 Patuxent Woods Drive

Columbia, Maryland 21046-1572

                                        
Initials here

3

AMENDMENT

          This Amendment is to the “Radio Station License Agreement to Receive and Use Arbitron PPM Data and Estimates” (the “PPM Master Agreement”) dated June 12, 2007, between Clear Channel Broadcasting Inc. (“Station” or “Clear Channel”) and Arbitron Inc. (“Arbitron”) for the radio stations set forth on Schedule A attached to the PPM Master Agreement and for a Term commencing January 1, 2007 and ending December 31, 2011.

          The parties agree as follows:

1.

Clear Channel Other Audio. The licenses granted hereunder shall include the use by Clear Channel of such services with other audio-based media content which is ancillary to a Clear Channel radio station’s broadcast (e.g. HD Channels, Sub-Channels, and Internet Streaming) which is licensed under the PPM Master Agreement at no additional charge by Arbitron, provided that such use is in accordance with the terms and conditions of the PPM Master Agreement.

2.

PPM Encoding Matters:

a.

Encoding Agreements. The parties agree that the term of the previously executed Encoding Agreement dated March 2, 2007 between Arbitron and Clear Channel is hereby amended such that its term would run contemporaneously with the PPM Master Agreement, including any extensions, if any, to the PPM Master Agreement. Further, Clear Channel agrees to execute Encoding Agreements for each Clear Channel owned and/or operated radio station located in each of the markets described on the attached Appendix B (the “PPM Markets”) on or before the commercialization of such PPM market with terms which run contemporaneously with the PPM Master Agreement, including any extensions, if any, to the PPM Master Agreement.

b.

PPM Codes and Hardware. The parties hereby agree that Clear Channel shall be entitled, without charge by Arbitron, to [ ***** ] unique PPM codes, and the corresponding requisite PPM encoding hardware, per terrestrial radio station owned by Clear Channel which is home to a PPM Market metro, such codes and encoders to be used only by the radio station which such no-charge allotment is assigned and applicable (e.g. if Clear Channel has 4 radio stations in a PPM Market, Arbitron shall provide Clear Channel with a total of [ ***** ]unique PPM codes, and the corresponding requisite PPM encoding hardware, at no-charge for the use of up to [ *** ] no-charge unique PPM codes at each of the 4 radio station). Clear Channel hereby agrees to pay Arbitron a per unique PPM code annual fee (the “Code Fee”) equal to $[ ***** ]/year per each unique PPM code utilized by Clear Channel in such PPM Market beyond such no-charge [ ***** ] unique PPM code allotment described above. Clear Channel shall be granted a onetime credit (i.e. this amount is not reset at anytime during the term of the PPM Master Agreement or any extension thereto) for Code Fees equal to [ ***** ] (the “Onetime Code Credit”) from which all Code Fee charges would be deducted prior to Arbitron sending

Clear Channel any invoices for such Code Fee charges. Any unused Onetime Code Credit shall expire on December 31, 2011 and any unique PPM codes and corresponding requisite PPM encoding hardware not relinquished/returned above the no-charge [ ***** ] unique PPM code allotment described above will begin incurring Code Fee charges starting January 1, 2012. Code Fee charges shall begin with the first month in which currency PPM Data is released in the applicable PPM Market and shall be charged on an annual basis. Clear Channel shall provide at least 120 days prior written notice on all unique PPM code requests above the [ ***** ] no-charge unique PPM code allotted in this Subsection.

3.	Extension of Diary contract in PPM markets entering into PPM pre-currency on or after January 2009. The parties agree that, unless otherwise extended in its entirety, the “Station License Agreement to Receive and Use Arbitron Radio Listening Estimates” dated December 27, 2004 shall be extended on the terms set forth in this Amendment for all of Clear Channel’s radio stations located in the current and planned PPM rollout Markets as such are listed on Appendix B attached hereto until such time as the relevant markets become PPM Markets and the terms of the PPM Master Agreement govern such market.
4.	PPM Master Agreement Supersedes Philadelphia, PA PPM Agreement. The parties agree that the PPM Master Agreement shall supersede and replace the “Radio Station License Agreement to Receive and Use Arbitron PPM Data and Estimates” dated March 2, 2007, between Clear Channel and Arbitron for radio stations WDAS-AM, WDAS-FM, WIOQ-FM, WISX-FM, WUBA-FM and WUSL-FM for a Term commencing January 1, 2007 and ending December 31, 2009.
5.	Cancellation Fund for Diary based Services. Clear Channel shall have the right to cancel certain Arbitron services licensed pursuant to the “Station License Agreement to Receive and Use Arbitron Radio Listening Estimates” dated December 27, 2004 (the “Current Diary Agreement”) as follows:

a.	The total value of all cancelled services licensed from Arbitron shall not exceed $125,000 in the 2007 calendar year. Any unused cancellation fund amounts from the 2007 calendar year will not carry into the 2008 calendar year and shall expire. The following subsection shall apply to the 2008 calendar year.
b.	The total value of all cancelled services licensed from Arbitron shall not exceed $125,000 in the 2008 calendar year or exceed $125,000 in the aggregate for calendar years 2008, 2009 and 2010 if the following sentence shall apply. Any unused cancellation fund amounts from the 2008 calendar year may be used in the 2009 and 2010 calendar years for services licensed (except for [ ***** ] services) pursuant to any extension of the Current Diary Agreement.
c.	Clear Channel must provide Arbitron with at least 120 days written notice of cancellation requests prior to the effective date of such cancellation. Clear Channel must pay for all services received prior to the effective date of cancellation.

Page 2 of 12

d. Notwithstanding Subsections a., b. & c. of this Section above, Clear Channel shall not be permitted to cancel any of the following services: Local Market Report, Maximi$er and/or Arbitrends unless the cancellation for such services is for a Clear Channel owned or managed radio station which has less than a 1.5 total Persons 12+ AQH Share points based on an average for the prior two Diary Reports in such market or, in the event it is a two book market, then based on the reported average number.

6. [ ***** ]/Annual Multi-service Volume Discounts.

a.	[ ***** ]. Provided Clear Channel provides written notice on or before [ ***** ] and Clear Channel is not in default under the terms of the PPM Master Agreement, Clear Channel shall be permitted on a market by market basis to terminate one or more of the following PPM related services effective as of [ ***** ].
b.	Onetime Special Clear Chanel Rebate. The parties have agreed that in the event that Clear Channel is not in default under the terms of the PPM Master Agreement and has elected not to terminate any PPM services pursuant to Subsection a. of this Section above, Clear Channel shall be entitled to $[ ***** ] onetime special rebate, such rebate to be applied in three installments during the Term of the PPM Master Agreement as follows: $[ ***** ] in calendar year [ ***** ]; $[ ***** ] in calendar year [ ***** ]; and $[ ***** ] in calendar year [ ***** ]. However, to the extent that Clear Channel elects to cancel any services pursuant to Subsection a. above, such multi-service/volume rebate shall also be reduced in a proportional manner (e.g. if 20% of the license value of the PPM services set forth in Subsection a. above are terminated, such onetime special rebate shall be reduced by 20% during each of the years it is to be applicable). By way of Example, assuming that the license fees applicable to: [ ***** ] during [ ***** ] equaled $[ ***** ] and Clear Channel elected to terminate services with license fees totaling $[ ***** ] effective as of [ ***** ] pursuant to Subsection a., then the rebates for the following years would be as follows: $[ ***** ] in calendar year [ ***** ]; $[ ***** ] in calendar year [ ***** ]; and $[ ***** ] in calendar year [ ***** ]. The parties agree that the onetime special Clear Chanel rebate provided in this Section does not extend to any extensions or future license agreements between Arbitron and Clear Channel.
c.	[ ***** ] Service Rebate for Calendar Year 2008. The parties have agreed that in the event that Clear Channel is not in default under the terms of the PPM Master Agreement at the time of each such payment, Arbitron shall provide Clear Channel with a calendar Year 2008 special rebate in the total amount equal to $[ ***** ], such rebate to be paid in two equal installments as follows: $[ ***** ] to be paid on or before [ ***** ] and $[ ***** ] to be paid on or before [ ***** ], each such payment to be in the form of a check made payable to Clear Channel. The parties agree that the onetime special rebate provided in this Section does not extend to any extensions or future license agreements between Arbitron and Clear Channel.

Page 3 of 12

7. Escalators on Extension Contracts.

a.

Current Diary Agreement: Arbitron agrees to extend the Current Diary Agreement, but only to permit it to coincide with the term of the PPM Master Agreement, for either a one, two, three, four or five year period (i.e. the maximum extension term shall be to an ending date of December 31, 2013) at an annual escalator equal to [ ***** ]% above expiring license fee rates (the Scarborough escalator would be [ ***** ]% above expiring rates) provided that (i) at least the same level of services (i.e. all peripheral and ancillary services as are licensed at the time of expiration of the Current Diary Agreement) are licensed under the extension of the Current Diary Agreement, and (ii) Clear Channel provides written notice of its commitment to enter into such extension on or before September 1, 2008.

b.

Extension of PPM Master Agreement for PPM Data Services: Arbitron agrees to extend the PPM Master Agreement for the current PPM markets at an annual escalator equal to [ ***** ]% above expiring license fee rates for either a one year extension or a two year extension provided the following terms and conditions are met:

i.	Clear Channel extends the Current Diary Agreement for a minimum of four years from the current expatriation (i.e. December 31, 2012) (the “Diary Renewal”), to coincide with the term of the PPM Master Agreement.
ii.	The Diary Renewal is for at least the same level of services that are licensed under the Current Dairy Agreement and related license agreements (including Scarborough services)(i.e. Radio Market Report, Respondent Level Data, Maximi$er, Scarborough, Retail Direct, and Arbitrends — optional software services in diary markets (Tapscan, MapMaker, and. PDA) would not be required)
iii.	All PPM peripheral services originally contracted for in the PPM Master Agreement must remain in effect for the five year original term of the agreement as well as the extension of the PPM Master Agreement.
iv.	Clear Channel must provide written notice to Arbitron on or before September 1, 2009 that it has elected to extend the PPM Master Agreement until either December 31, 2012 or December 31, 2013.
v.	Clear Channel must be current with all payments under the PPM Master Agreement and not in default thereunder.

8. New PPM Markets (beyond current rollout schedule). In the event Arbitron creates additional PPM market(s) beyond what is currently on the rollout schedule attached hereto as Appendix B (each a “Beyond Rollout PPM Market”), Arbitron will extend to Clear Channel the following options related to such additional market(s):

a.	Clear Channel may elect to [ ***** ], or
b.	Clear Channel may license similar services as those licensed under the PPM Master Agreement for the Beyond Rollout PPM Market with license fee rates (including escalators) that correspond to those contained in the PPM Master Agreement.

Page 4 of 12

c.

The parties understand and agree that the Arbitron PPM Market Rollout Schedule attached hereto as Appendix B, including currency and pre-currency rollout dates, has been created by Arbitron based on the best information available at the time of the execution of the PPM Master Agreement and it therefore may change as new information becomes known to Arbitron. Therefore, the parties understand and agree that the timing of the commercialization of various PPM Markets may shift (but not change as to the base license fees due for such market) and therefore the corresponding PPM Data license fees will also shift in a corresponding manner as such is appropriate. By way of example only, assuming that commercialization of the Chicago Market is delayed from the anticipated date of March 2008 to April 2008, the PPM Data license fees for such market would not start until April 2008 and the applicable license fees due under the Current Diary Agreement would continue to apply to the Chicago Market for March 2008.

d.

National Services. In the event that one or more of the services licensed pursuant to the PPM Master Agreement is for a national service and a Clear Channel radio station is not licensed to Arbitron’s PPM Data for the Market which it is home to, no Clear Channel radio station (or any Clear Channel affiliate, including, but not limited to, KMG Consolidated Radio, Premier Radio Networks, and/or Clear Channel Traffic) may use the data contained in any Arbitron national service to promote or otherwise benefit such non-licensed radio station unless such data is presented in a combined format containing at least one locally licensed Arbitron Market and such data is only displayed in a cumulative manner so that the non-licensed Arbitron Market’s data (which would include the data for such non-licensed Clear Channel radio station) is not separately presented. For the purpose of clarity, the specific radio station not licensed to at least its home Market’s PPM Data may not use any Arbitron data, including any data in any Arbitron national services.

9.

Evolution of New Arbitron Services. Upon the release of a new Arbitron service released by Arbitron during 2007-2011 in any Arbitron PPM market, upon written request, Clear Channel shall be provided with a no-charge [ ***** ] month license for up to [ ***** ] Clear Channel markets to permit Clear Channel to evaluate such new service, provided the term of any such no-charge license does not extend beyond the first twelve (12) month period after release of such new service.

10.

RLD Data Services. Clear Channel (or an entity designated by Clear Channel provided such other entity i) is not a competitor of Arbitron, such determination to be at Arbitron’s sole and absolute discretion, and/or, ii) does not have a poor reputation in the ratings industry based on the same criteria Arbitron would apply to other third-party entities requesting to participate in the rollout of the RLD Data) shall have the option to participate in Arbitron’s rollout of its Respondent Level Data (“RLD Data”) provided Clear Channel (or such other designated entity) enters into Arbitron’s Third Party License Agreement to Use the Arbitron Tally Engine/API Software Modules (the “Tally License Agreement”). Prior to making a determination as to whether to enter into the Tally License Agreement, Clear Channel (or such other designated entity) shall have the option to enter into a license for the purpose of evaluating the RLD Data (the “Evaluation License”), as more specifically described in Appendix A. The cost of such Evaluation License shall be $10,000.00, and shall be for a term of not less than six (6) months.

Page 5 of 12

In the event that Clear Channel (or such other designated entity) determines to enter into the Tally License Agreement, Clear Channel (or such other designated entity) shall pay an annual license fee of $50,000.00 (with credit for the $10,000 paid for the Evaluation License), plus an annual per-station fee as follows:

i.	Markets 1-10	$1,300 per station per year
ii.	Markets 11-25	$1,000 per station per year
iii.	Markets 26-75	$   750 per station per year
iv.	Markets 76-100	$   500 per station per year
v.	Markets 101+	$   200 per station per year

	The general terms and conditions of the Tally License Agreement at set forth on the Summary of Proposed Terms and Conditions for Licensing Arbitron’s Tally Engine/API Software Module for use with Arbitron’s Respondent Level Data and Enhanced Data Services are attached hereto as Appendix A.
	The Arbitron Tally Engine Software Development Kit License Agreement, the form of which has been provided to Clear Channel, sets forth the terms and conditions of any evaluation and test license for the RLD Data engine.
11.	Clear Channel Requested Special Reports. Until such time as one or more publicly available software applications (such applications may require a license fee to be paid by Clear Channel) are developed which would permit Clear Channel to create the below listed reports, and beginning on the first calendar month after execution of this Agreement, but in no event subsequent to delivery of the July 2007 Monthly PPM data set, Arbitron shall deliver such special Clear Channel report(s) to Clear Channel (in electronic form) within 5 business days of the release of each monthly PPM report in the relevant PPM Market(s) (e.g. if such software application will permit Clear Channel to create three of the six reports, Arbitron shall continue to deliver the three reports which cannot be developed by such software application until such time as there is a program which can create them). In the event that Arbitron fails to deliver such report(s) within the above allotted timeframe, Clear Channel shall receive a reduction equal to [ ***** ] charges applicable to the PPM Analysis Tool software in the PPM Market where such report(s) are delivered late for each day (24 hour period) such report(s) are delivered late.

1)[*****]	4)[*****]
2)[*****]	5)[*****]
3)[*****]	6)[*****]

Page 6 of 12

12.

Licensing of Unlicensed Clear Channel Acquisitions. The parties agree that any radio stations which are purchased and/or in a management or business relationship with Clear Channel during the Term of the PPM Master Agreement and which qualify for at least two (2) consecutive months (license fee billing shall begin as of the first day of such first qualifying month) to be reported in the PPM Data shall be required under Section 11 of the PPM Master Agreement to license the PPM Data, RLD Data, and to the extent not previously terminated by Clear Channel, the Analysis Tool. If another Clear Channel owned or operated radio station in the market subscribes to any of the Tapscan, Scarborough and/or other Arbitron services, such recently purchased and/or managed station/stations shall also be required to subscribe to at least the same service(s) as those to which the existing station is licensed. As used in this Amendment, the terms “managed”, “manages”, and “management” in reference to Clear Channel radio stations mean any joint operating agreement, management or control agreement, or other business relationship, including but not limited to a joint sales agreement or local marketing agreement. The reference is meant to include any radio station required to be licensed by Clear Channel under Section 11 of the PPM Master Agreement.

13.

Calculation of Rate for Unlicensed Stations. In the event that Clear Channel acquires and/or manages a radio station(s) that is not an Arbitron subscriber, Clear Channel agrees to the use of the following methods for calculating the license fees for the PPM Data, RLD Data, and the Analysis Tool services:

a.

Licensed Environment, Unlicensed Acquisitions. For stations purchased and/or managed by Clear Channel after the execution date of the PPM Master Agreement, which at the time of such purchase and/or management by Clear Channel are not Arbitron subscribers and are located in markets where Clear Channel already owns and/or manages stations, the services required to be licensed shall be priced on a cost per share point basis, based on the cost per share point being paid by Clear Channel’s existing radio stations in that PPM market. The cost per share point will be calculated by averaging the PPM Data Persons 6+ AQH Share points for the then-currently licensed Clear Channel owned radio stations in the market.

The cost per share point shall be calculated by summing the total PPM Data Persons 6+ AQH Share points for the then-currently licensed Clear Channel owned radio station(s) in the market using the latest available months of PPM Data (up to a prior twelve month average). The current year combined annual PPM Data, RLD Data and PPM Analysis Tool rates (including sample surcharges, if applicable) for the then-currently licensed Clear Channel owned radio station(s) in the PPM Market is then divided by the sum total of the share points to determine a cost per share point. That cost per share point is then multiplied by the average PPM Data Persons 6+ AQH Share points using the latest available months of PPM Data (up to a prior twelve month average) of the radio station(s) to be licensed, however, the share point will be taken from the then-current monthly report only in the event that the station(s) has just signed on-the-air or undergone a format change or had not qualified for reporting prior surveys such that a zero would be averaged into the calculation to determine the first term year license fee rate for the PPM Data, RLD Data and PPM Analysis Tool for the newly-licensed station. Notwithstanding the results obtained from the calculations performed pursuant to this Section, the parties understand and agree that the minimum License Charge for each survey shall not be less than $[ ***** ].

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	The license fee rates for peripherals services (including Scarborough, Tapscan, Analysis tool, Training, 800 support rate) are to be calculated based on the per station rates being charged to Clear Channel’s current licensees in the market.
b.	Unlicensed Environment, Licensed Acquisition. For radio stations purchased and/or managed by Clear Channel after the execution of the PPM Master Agreement, which at the time of such purchase and/or management agreement by Clear Channel are not Arbitron subscribers and are located in Arbitron markets where Clear Channel does not own and/or manage other radio stations, any services required to be licensed as set forth in the PPM Master Agreement and/or in this Amendment shall be priced based on the average Clear Channel cost per share point (see calculation above) for the Clear Channel radio stations owned and/or managed in its next three (if there are not three, then based on the number of available markets to do such comparison) higher-ranked subscribing markets and its next three (if there are not three, then based on the number of available markets to do such comparison) lower-ranked subscribing markets.
c.	Licensed Environment, Licensed Acquisitions – services not in parity. If a radio station which is purchased and/or managed by Clear Channel during the Term of the PPM Master Agreement is licensed to utilize any of the following: 1-800 support, Weeklies, Training, Tapscan, Qualitap, The Analyisis tool, , Mapmaker and/or PD Advantage and/or Scarborough and/or RetailDirect and/or Maximi$er Qualitative Interface;, and the existing Clear Channel’s radio stations in the same market are not licensed to one or more of these services, the existing Clear Channel’s radio stations will not be required to license such service(s). However, those radio stations in the market that are not licensed to these services shall not be permitted to use such services in any manner. Arbitron also reserves the right to cancel the acquired services stated above that are not commonly licensed across all station-owned stations in the market.

14. Delivery of PPM Data in Electronic Form/Timing of Delivery of Data. Arbitron hereby agrees that it will supply the PPM Data in at least electronic form and such delivery will be on the date such data is scheduled to be delivered to Arbitron’s radio station licensees.

Page 8 of 12

15.	The use of an “*” (asterisk) on the PPM Master Agreement and Attachment to Radio Station License Agreement to Receive and Use Arbitron PPM Data and Audience Estimates (the “Attachment”) shall refer to the Schedule A Attachment, attached to the PPM Master Agreement and made a part thereof.
16.	Attachment, first sentence, is amended by deleting “This is an Attachment to the Radio Station License Agreement to Receive and Use Arbitron PPM Data and Audience Estimates (the “Basic License Agreement”)” and replacing it with “This is an Attachment to the Radio Station License Agreement to Receive and Use Arbitron PPM Data and Estimates”.
17.	Section 3(a) is deleted in its entity.
18.	Section 5(a), insert the following new sentence before the first sentence of the Subsection: “Arbitron shall invoice Station for any payments due hereunder, and payment shall be due and payable no later than thirty (30) days after the date of such invoice.”
19.	Section 5(c), line 6, insert “that have been issued broadcast licenses by the FCC (this does not apply to parent corporation Clear Channel),” after “Station or any of Station’s affiliated, subsidiary or related corporations or entities” and before “regardless of whether...”.
20.	Section 5(d), line 6, delete “or its station(s)” and replace it with “or those entities described in 5(c) above”.
21.	Section 6(a), insert the following new sentence at the end of the first paragraph: “However, in the event that one or more of the aforementioned changes results in the cessation of a PPM Market from being measured by a form of electronic measurement, Clear Channel shall have the right to terminate this Agreement as to such Market.”
22.	Section 6(b), line 10, replace “ten (10) days” with “ten (10) business days”.
23.	Section 6(c) is deleted and replaced with the following new language:

“In the event of a force majeure occurrence, and to the extent beyond the reasonable control of Arbitron, including, but not limited to, civil disturbance, war, or other casualty, government regulations or acts or acts of God, and/or postal interruptions, Arbitron may increase the Gross Annual Rate hereunder, if such force majeure event results in a cost increase to Arbitron which Arbitron explains in writing to Clear Channel and such increase is applied to the majority of Arbitron’s customers who license similar services as licensed hereunder (nothing in this passage shall not entitle Clear Channel to audit the business books and/or records of Arbitron). If Arbitron increases the license rates charged for one or more of the aforementioned reasons, it shall give prior written notice to Clear Channel. Clear Channel may, within a 30-day period following such notice, cancel the unexpired Term of the Agreement for only the Data and/or Reports and/or Services and Market for which Arbitron has increased its Rate pursuant to such notice (all other terms and conditions of the Agreement in the unaffected Markets shall remain in full force and effect), by written notice pursuant to Section 15(a), without cancellation charge or other cost, effective on the date the new Gross Annual Rate would have become effective. In the absence of such timely cancellation, this Agreement shall continue and the new Gross Annual Rate shall become payable as stated in Arbitron’s notice and thereafter.”

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24.	Section 7, third paragraph, add the following sentence after the last sentence of the paragraph: “Arbitron hereby agrees that Clear Channel may use the Arbitron logos, tradenames, and/or service marks contained in the services licensed hereunder provided such use is consistent with the normal course of business (e.g. sales presentation) for radio station licensee’s of such services and further that such use does not disparage Arbitron or otherwise involve any action which one would consider an act of moral turpitude.”
25.	Section 10, last paragraph starting with “In the event” is hereby deleted in its entirety.
26.	Section 11, first paragraph, delete the second sentence and replace it with the following new sentences:

“Notwithstanding the foregoing sentence, in the event that Clear Channel sells all or substantially all of Clear Channel’s assets of one or more of its radio stations licensed hereunder, Clear Channel may assign its rights and obligations applicable to such sold radio station(s) without Arbitron’s consent, provided: (i) Clear Channel provides written notice to Arbitron as soon as such notice would not violate any SEC rules and/or regulation, but in no event not less than thirty (30) days prior to the effective date of any assignment, (ii) the entity acquiring the radio station enters into Arbitron’s standard form license agreement(s) for the relevant services being assign (this Amendment or any other amendment created for Clear Channel shall not pass to the acquiring station), (iii) Clear Channel shall be permitted to assign the applicable License Charges for the services licensed for such sold radio stations(s) but excluding any Clear Channel specific discounts or other general Arbitron discounts which the acquiring station would not otherwise be entitled. Further, the rates applicable to the assignment are at all times subject to Arbitron’s right to redetermine the rate to be charged to the assignee if such assignment results in an expanded use of the Data or Reports. However, in the event that Arbitron determines that such assignee is a competitor of Arbitron, such determination to be in the sole and absolute discretion of Arbitron, Arbitron shall have the right to reject the assignment, however, in the event of such rejection the services and applicable license fees for such sold radio station shall be terminated.”

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27.	Section 11, second paragraph, second sentence, insert “covered by this Agreement” after “. . . one of its radio stations” and before “, Clear Channel remains fully . . .”.
28.	Section 11, third paragraph, the following new language is added to the end of to the penultimate sentence starting with “In the event”: “(such redetermined additional license fee is to reflect the expanded use of the services licensed hereunder by the new user and shall not effect the rates applicable to existing Clear Channel licensed radio stations).”
29.	Section 13(b), line 4, insert “reasonable” before “judgment” and after “in its”.
30.	Section 15(e), beginning with “Arbitron may . . .” is deleted in its entirety.
31.	Section 15(f), line 4, delete “for any reason” and replace it with “in the event Arbitron ceases to produce such service”.
32.	Section 15(j), last sentence beginning with “For all markets . . .” is deleted.
33.	PPM Master Agreement and this Amendment Not Assignable Except as a Whole. The PPM Master Agreement and this Amendment may not be assigned by Clear Channel to any other party. Any attempt to assign the PPM Master Agreement and this Amendment will be deemed and considered null and void. Clear Channel agrees to keep the terms and conditions of the PPM Master Agreement and this Amendment confidential. Inasmuch as the terms of the PPM Master Agreement and this Amendment are not assignable and/or transferable by Clear Channel, Clear Channel expressly agrees that it will not provide the PPM Master Agreement and this Amendment or any information contained in this Amendment to any buyer(s) and/or potential buyer(s) of any of Clear Channel’s stations. Notwithstanding the foregoing, Arbitron acknowledges and agrees that the proposed acquisition of Clear Channel Communications, Inc. by a private equity group co-led by Bain Capital Partners, LLC and Thomas H. Lee Partners, L.P. shall in no way alter or effect the terms of, or otherwise constitute an assignment of this PPM Master Agreement and/or Amendment. In such event, the rights and obligations of the PPM Master Agreement and this Amendment shall bind and benefit any such successor or assign of Clear Channel.
34.	In the event of a miscalculation, mathematical error and/or typographical error on any attachment to the PPM Master Agreement, each party hereby agrees to correct such error to reflect the intent of the parties to correct such miscalculation, mathematical error and/or typographical error.

          In the event of a conflict between the terms of this Amendment and the PPM Master Agreement, the terms of this Amendment shall control. All other terms and conditions of the PPM Master Agreement and the Attachment shall remain in full force and effect.

AGREED TO:	ACCEPTED BY:
CLEAR CHANNEL BROADCASTING, INC.

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200 East Basse Road
San Antonio, TX 78205
By:	/s/ John Hogan	By:	/s/ Greg Stephan
	John Hogan	Date:	6/26/07
	(print or type above signature)
Title:	President, CEO	ARBITRON INC.
		9705 Patuxent Woods Drive
		Columbia, Maryland 21046
Date:

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EX-10.2

Exhibit 10.2

ARBITRON INC.
1999 STOCK INCENTIVE PLAN
(Amended as of May 15, 2007)

1. Purpose of Plan.

     The purpose of the Arbitron Inc. 1999 Stock Incentive Plan (the “Plan”) is to advance the interests of Arbitron Inc. (the “Company”) and its stockholders by enabling the Company and its Subsidiaries to attract and retain persons of ability to perform services for the Company and its Subsidiaries by providing an incentive to such individuals through equity participation in the Company and by rewarding such individuals who contribute to the achievement by the Company of its economic objectives.

2. Definitions.

     The following terms will have the meanings set forth below, unless the context clearly otherwise requires:

     2.1 “Board” means the Board of Directors of the Company.

     2.2 “Broker Exercise Notice” means a written notice pursuant to which a Participant, upon exercise of an Option, irrevocably instructs a broker or dealer to sell a sufficient number of shares or loan a sufficient amount of money to pay all or a portion of the exercise price of the Option and/or any related withholding tax obligations and remit such sums to the Company and directs the Company to deliver stock certificates to be issued upon such exercise directly to such broker or dealer.

     2.3 “Change of Control” means an event described in Section 13.1 of the Plan or such other definition as may be adopted by the Committee from time to time in its sole discretion.

     2.4 “Code” means the Internal Revenue Code of 1986, as amended.

     2.5 “Committee” means the group of individuals administering the Plan, as provided in Section 3 of the Plan.

     2.6 “Common Stock” means the common stock of the Company, par value $0.50 per share, or the number and kind of shares of stock or other securities into which such Common Stock may be changed in accordance with Section 4.4 of the Plan.

     2.7 “Disability” means the disability of the Participant such as would entitle the Participant to receive disability income benefits pursuant to the long-term disability plan of the Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to the Participant, the permanent and total disability of the Participant within the meaning of Section 22(e)(3) of the Code.

     2.8 “Dividend Equivalents” shall have the meaning set forth in Section 14.3.

     2.9 “Eligible Recipients” means all employees (including, without limitation, officers and directors who are also employees) of the Company or any Subsidiary and any non-employee directors, consultants and independent contractors of the Company or any Subsidiary.

     2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     2.11 “Fair Market Value” means, with respect to the Common Stock as of any date, the closing market price per share of the Common Stock at the end of the regular way trading session, which as of the effective date of this Plan is 4:00 p.m., New York City time, as reported on the New York Stock Exchange Composite Tape on that date (or, if no shares were traded or quoted on such date, as of the next preceding date on which there was such a trade or quote).

     2.12 “Freestanding Stock Appreciation Right” shall have the meaning set forth in Section 7.1.

     2.13 “Incentive Award” means an Option, Stock Appreciation Right, Restricted Stock Award, Performance Unit or Dividend Equivalent granted to an Eligible Recipient pursuant to the Plan.

     2.14 “Incentive Stock Option” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that qualifies as an “incentive stock option” within the meaning of Section 422 of the Code.

     2.15 “Non-Statutory Stock Option” means a right to purchase Common Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that does not qualify as an Incentive Stock Option.

     2.16 “Option” means an Incentive Stock Option or a Non-Statutory Stock Option.

     2.17 “Participant” means an Eligible Recipient who receives one or more Incentive Awards under the Plan.

     2.18 “Performance Goal” means one or more of the following performance goals, either individually, alternatively or in any combination, applied on a corporate, subsidiary or business unit basis: cash flow, earnings (including one or more of gross profit, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization and net earnings), earnings per share, individually, margins (including one or more of gross, operating and net income margins), returns (including one or more of return on assets, equity, investment, capital and revenue and total stockholder return), stock price, economic value added, working capital, market share, cost reductions and strategic plan development and implementation. Such goals may reflect absolute entity or business unit performance or a relative comparison to the performance of a peer group of entities or other external measure of the selected performance criteria. The Committee may appropriately adjust any evaluation of performance under such goals to exclude any of the following events: asset write-downs, litigation or claim judgments or settlements, the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, accruals for reorganization and restructuring programs, uninsured catastrophic losses, and any extraordinary non-recurring items as described in Accounting Principles Board Opinion No. 30 or in management’s discussion and analysis of financial performance appearing in the Company’s annual report to stockholders for the applicable year.

     2.19 “Performance Unit” means a right granted to an Eligible Recipient pursuant to Section 9 of the Plan to receive a payment from the Company, in the form of Common Stock, cash, Stock Units or a combination of the foregoing, upon the achievement of established performance criteria.

     2.20 “Previously Acquired Shares” means shares of Common Stock that are already owned by the Participant or, with respect to any Incentive Award, that are to be issued upon the grant, exercise or vesting of such Incentive Award.

     2.21 “Prior Plans” mean the Ceridian Corporation 1993 Long-Term Incentive Plan and the Ceridian Corporation 1990 Long-Term Incentive Plan.

     2.22 “Restricted Stock Award” means an award of Common Stock or Stock Units granted to an Eligible Recipient pursuant to Section 8 of the Plan that is subject to the restrictions on transferability and the risk of forfeiture imposed by the provisions of such Section 8.

     2.23 “Retirement” means the termination (other than for Cause or by reason of death or Disability) of a Participant’s employment or other service on or after the date on which the Participant has attained the age of 55 and has completed 10 years of continuous service to the Company or any Subsidiary (such period of service to be determined in accordance with the retirement/pension plan or practice of the Company or Subsidiary then covering the Participant, provided that if the Participant is not covered by any such plan or practice, the Participant will be deemed to be covered by the Company’s plan or practice for purposes of this determination).

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     2.24 “Section 162(m)” means Section 162(m) of the Code and the applicable Treasury Regulations promulgated thereunder.

     2.25 “Securities Act” means the Securities Act of 1933, as amended.

     2.26 “Stock Appreciation Right” shall mean the right granted to a Participant pursuant to Section 7.

     2.27 “Stock Unit” means a bookkeeping entry representing the equivalent of one share of Common Stock that is payable in the form of Common Stock, cash or any combination of the foregoing.

     2.28 “Subsidiary” means any entity that is directly or indirectly controlled by the Company or any entity in which the Company has a significant equity interest, as determined by the Committee.

     2.29 “Substitute Awards” shall mean Incentive Awards granted or shares of Common Stock issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

     2.30 “Tandem Stock Appreciation Right” shall have the meaning set forth in Section 7.1.

     2.31 “Tax Date” means the date any withholding tax obligation arises under the Code for a Participant with respect to an Incentive Award.

3. Plan Administration.

     3.1 The Committee. So long as the Company has a class of its equity securities registered under Section 12 of the Exchange Act, the Plan will be administered by a committee (the “Committee”) consisting solely of not less than two members of the Board who are “Non-Employee Directors” within the meaning of Rule 16b-3 under the Exchange Act, who are “independent directors” for purposes of the rules and regulations of the New York Stock Exchange, and, if the Board so determines in its sole discretion, who are “outside directors” within the meaning of Section 162(m). To the extent consistent with corporate law, the Committee may delegate to any directors or officers of the Company the duties, power and authority of the Committee under the Plan pursuant to such conditions or limitations as the Committee may establish; provided, however, that only the Committee may exercise such duties, power and authority with respect to Eligible Recipients who are subject to Section 16 of the Exchange Act and Section 162(m). Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of the Plan will be conclusive and binding for all purposes and on all persons, and no member of the Committee will be liable for any action or determination made in good faith with respect to the Plan or any Incentive Award granted under the Plan.

     3.2 Authority of the Committee.

          (a) In accordance with and subject to the provisions of the Plan, the Committee will have the authority to determine all provisions of Incentive Awards as the Committee may deem necessary or desirable and as consistent with the terms of the Plan, including, without limitation, the following: (i) the Eligible Recipients to be selected as Participants; (ii) the nature and extent of the Incentive Awards to be made to each Participant (including the number of shares of Common Stock to be subject to each Incentive Award, any exercise price, the manner in which Incentive Awards will vest or become exercisable and whether Incentive Awards will be granted in tandem with other Incentive Awards) and the form of written agreement, if any, evidencing such Incentive Award; (iii) the time or times when Incentive Awards will be granted; (iv) the duration of each Incentive Award; and (v) the restrictions and other conditions to which the payment or vesting of Incentive Awards may be subject. In addition, the Committee will have the authority under the Plan in its sole discretion to pay the economic value of any Incentive Award in the form of cash, Common Stock, Stock Units or any combination of the foregoing.

          (b) Except as otherwise provided in the remainder of this Section 3.2(b), the Committee will have the authority under the Plan to amend or modify the terms of any outstanding Incentive Award in any manner, including, without limitation, the authority to modify the number of shares or other terms and conditions of an

3

Incentive Award, extend the term of an Incentive Award or accelerate the exercisability or vesting or otherwise terminate any restrictions relating to an Incentive Award; provided, however that the amended or modified terms are permitted by the Plan as then in effect and that any Participant adversely affected by such amended or modified terms has consented to such amendment or modification. Without prior approval of the Company’s stockholders, the Committee shall not have the authority under the Plan to (i) amend or modify the terms of any pre-existing Option awards to lower the Option exercise price or (ii) authorize the grant of replacement Option awards in substitution for pre-existing Option awards that have been or are to be surrendered and canceled at any time when the Fair Market Value of the Common Stock is less than the exercise price applicable to such surrendered and canceled Option awards.

          (c) In the event of (i) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, extraordinary dividend or divestiture (including a spin-off) or any other similar change in corporate structure or shares, (ii) any purchase, acquisition, sale or disposition of a significant amount of assets or a significant business, (iii) any change in accounting principles or practices, or (iv) any other similar change, in each case with respect to the Company (or any Subsidiary or division thereof) or any other entity whose performance is relevant to the grant or vesting of an Incentive Award, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) may, without the consent of any affected Participant, amend or modify the grant or vesting criteria of any outstanding Incentive Award that is based in whole or in part on the financial performance of the Company (or any Subsidiary or division thereof) or such other entity so as equitably to reflect such event, with the desired result that the criteria for evaluating such financial performance of the Company or such other entity will be substantially the same (in the sole discretion of the Committee or the board of directors of the surviving corporation) following such event as prior to such event; provided, however, that the amended or modified terms are permitted by the Plan as then in effect.

          (d) The Committee may permit or require the deferral of any payment, issuance or other settlement of an Incentive Award subject to such rules and procedures as the Committee may establish, including the conversion of such payment, issuance or other settlement into Options or Stock Units and the payment or crediting of interest, dividends or dividend equivalents.

4. Shares Available for Issuance.

     4.1 Maximum Number of Shares Available. Subject to adjustment as provided in Section 4.4 of the Plan, the maximum number of shares of Common Stock that will be available for issuance under the Plan will be 4,204,009 shares. The Committee may use shares available for issuance under the Plan as the form of payment for compensation, awards or rights earned or due under deferred or any other compensation plans or arrangements of the Company or any Subsidiary. The shares available for issuance under the Plan may, at the election of the Committee, be either treasury shares or shares authorized but unissued, and, if treasury shares are used, all references in the Plan to the issuance of shares will, for corporate law purposes, be deemed to mean the transfer of shares from treasury.

     4.2 Calculation of Shares Available. Shares of Common Stock that are issued under the Plan or that are subject to outstanding Incentive Awards will be applied to reduce the maximum number of shares of Common Stock remaining available for issuance under the Plan. To the extent that any shares of Common Stock that are subject to an Incentive Award under the Plan or the Prior Plan (a) are not issued to a Participant due to the fact that such Incentive Award lapses, expires, is forfeited or for any reason is terminated unexercised or unvested, or is settled or paid in cash or (b) are used to satisfy any exercise price or withholding obligations, such shares will automatically again become available for issuance under the Plan. In addition, to the extent that a Participant tenders (either by actual delivery or by attestation) shares of Common Stock already owned by the Participant to the Company in satisfaction of any exercise price or withholding tax obligations, such shares will automatically again become available for issuance under the Plan.

     4.3 Additional Limitations. Notwithstanding any other provisions of the Plan to the contrary and subject, in each case, to adjustment as provided in Section 4.4 of the Plan, (a) no more than 2,000,000 shares of Common Stock may be issued under the Plan with respect to Incentive Stock Options, (b) no more than 700,000 shares of Common Stock may be issued under the Plan with respect to Restricted Stock Awards that are not granted in lieu of cash compensation that would otherwise be payable to Participants, and (c) no Participant in the Plan may be granted Incentive Awards relating to more than 300,000 shares of Common Stock in the aggregate during any period of three consecutive fiscal years of the Company.

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     4.4 Adjustments to Shares and Incentive Awards. In the event of any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin-off) or any other similar change in the corporate structure or shares of the Company, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) will make appropriate adjustments (which determination will be conclusive) as to the number and kind of securities or other property (including cash) available for issuance or payment under the Plan and, in order to prevent dilution or enlargement of the rights of Participants, (a) the number and kind of securities or other property (including cash) subject to outstanding Options and Stock Appreciation Rights, and (b) the exercise price of outstanding Options and Stock Appreciation Rights.

5. Participation.

     Participants in the Plan will be those Eligible Recipients who, in the judgment of the Committee, have contributed, are contributing or are expected to contribute to the achievement of economic objectives of the Company or its Subsidiaries. Eligible Recipients may be granted from time to time one or more Incentive Awards, singly or in combination or in tandem with other Incentive Awards, as may be determined by the Committee in its sole discretion. Incentive Awards will be deemed to be granted as of the date specified in the grant resolution of the Committee, which date will be the date of any related agreement with the Participant.

6. Options.

     6.1 Grant. An Eligible Recipient may be granted one or more Options under the Plan, and such Options will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion and reflected in the award agreement evidencing such Option. The Committee may designate whether an Option is to be considered an Incentive Stock Option or a Non-Statutory Stock Option. To the extent that any Incentive Stock Option granted under the Plan ceases for any reason to qualify as an “incentive stock option” for purposes of Section 422 of the Code, such Incentive Stock Option will continue to be outstanding for purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock Option.

     6.2 Exercise Price. The per share price to be paid by a Participant upon exercise of an Option will be determined by the Committee in its discretion at the time of the Option grant; provided, however, that such price will not be less than 100% of the Fair Market Value of one share of Common Stock on the date of grant or, with respect to an Incentive Stock Option (110% of the Fair Market Value if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

     6.3 Exercisability and Duration. An Option will become exercisable at such times and in such installments as may be determined by the Committee in its sole discretion at the time of grant; provided, however, that no Option may be exercisable after 10 years from its date of grant (five years from its date of grant if the Option is an Incentive Stock Option and if, at the time the Incentive Stock Option is granted, the Participant owns, directly or indirectly, more than 10% of the total combined voting power of all classes of stock of the Company or any parent or subsidiary corporation of the Company).

     6.4 Payment of Exercise Price. The total purchase price of the shares to be purchased upon exercise of an Option will be paid entirely in cash (including check, bank draft or money order); provided, however, that the Committee, in its sole discretion and upon terms and conditions established by the Committee, may allow such payments to be made, in whole or in part, by tender of a Broker Exercise Notice, Previously Acquired Shares (including through delivery of a written attestation of ownership of such Previously Acquired Shares if permitted, and on terms acceptable, to the Committee in its sole discretion) or by a combination of such methods.

     6.5 Manner of Exercise. An Option may be exercised by a Participant in whole or in part from time to time, subject to the conditions contained in the Plan and in the agreement evidencing such Option, by delivery in person, by facsimile or electronic transmission or through the mail of written notice of exercise to the Company, Attention: Corporate Treasury, at its principal executive office in Minneapolis, Minnesota and by paying in full the total exercise price for the shares of Common Stock to be purchased in accordance with Section 6.4 of the Plan.

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     6.6 Aggregate Limitation of Stock Subject to Incentive Stock Options. To the extent that the aggregate Fair Market Value (determined as of the date an Incentive Stock Option is granted) of the shares of Common Stock with respect to which incentive stock options (within the meaning of Section 422 of the Code) are exercisable for the first time by a Participant during any calendar year (under the Plan and any other incentive stock option plans of the Company or any subsidiary or parent corporation of the Company (within the meaning of the Code)) exceeds $100,000 (or such other amount as may be prescribed by the Code from time to time), such excess Options will be treated as Non-Statutory Stock Options. The determination will be made by taking incentive stock options into account in the order in which they were granted. If such excess only applies to a portion of an Incentive Stock Option, the Committee, in its discretion, will designate which shares will be treated as shares to be acquired upon exercise of an Incentive Stock Option.

7. Stock Appreciation Rights.

     7.1 Grant and Exercise. The Committee may provide Stock Appreciation Rights (a) in conjunction with all or part of any Option granted under the Plan or at any subsequent time during the term of such Option (“Tandem Stock Appreciation Right”), (b) in conjunction with all or part of any Incentive Award (other than an Option) granted under the Plan or at any subsequent time during the term of such Incentive Award, or (c) without regard to any Option or other Incentive Award (a “Freestanding Stock Appreciation Right”), in each case upon such terms and conditions as the Committee may establish in its sole discretion.

     7.2 Terms and Conditions. Stock Appreciation Rights shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, including the following:

          (a) Upon the exercise of a Stock Appreciation Right, the holder shall have the right to receive the excess of (i) the Fair Market Value of one share of Common Stock on the date of exercise or such other amount as the Committee shall so determine at any time during a specified period before the date of exercise over (ii) the grant price of the right on the date of grant, or in the case of a Tandem Stock Appreciation Right granted on the date of grant of the related Option, as specified by the Committee in its sole discretion, which except in the case of Substitute Awards or in connection with an adjustment provided in Section 4.4, shall not be less than the Fair Market Value of one share of Common Stock on such date of grant of the right or the related Option, as the case may be.

          (b) Upon the exercise of a Stock Appreciation Right, the Committee shall determine in its sole discretion whether payment shall be made in cash, in whole shares of Common Stock or other property, or any combination thereof.

          (c) Any Tandem Stock Appreciation Right may be granted at the same time as the related Option is granted or at any time thereafter before exercise or expiration of such Option.

          (d) Any Tandem Stock Appreciation Right related to an Option may be exercised only when the related Option would be exercisable and the Fair Market Value of the shares of Common Stock subject to the related Option exceeds the option price at which shares of Common Stock can be acquired pursuant to the Option. In addition, (i) if a Tandem Stock Appreciation Right exists with respect to less than the full number of shares of Common Stock covered by a related Option, then an exercise or termination of such Option shall not reduce the number of shares to which the Tandem Stock Appreciation Right applies until the number of shares then exercisable under such Option equals the number of shares of Common Stock to which the Tandem Stock Appreciation Right applies, and (ii) no Tandem Stock Appreciation Right granted under the Plan to a person then subject to Section 16 of the Exchange Act shall be exercised during the first six months of its term for cash.

          (e) Any Option related to a Tandem Stock Appreciation Right shall no longer be exercisable to the extent the Tandem Stock Appreciation Right has been exercised.

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          (f) The provisions of Stock Appreciation Rights need not be the same with respect to each recipient.

          (g) The Committee may impose such other conditions or restrictions on the terms of exercise and the exercise price of any Stock Appreciation Right, as it shall deem appropriate, including providing that the exercise price of a Tandem Stock Appreciation Right may be less than the Fair Market Value on the date of grant if the Tandem Stock Appreciation Right is added to an Option following the date of the grant of the Option. In connection with the foregoing, the Committee shall consider the applicability and effect of Section 162(m) of the Code. Notwithstanding the foregoing provisions of this Section 7.2(g), but subject to Section 4.4, a Freestanding Stock Appreciation Right shall not have (i) an exercise price less than Fair Market Value on the date of grant, or (ii) a term of greater than ten years. In addition to the foregoing, but subject to Section 4.4, the base amount of any Stock Appreciation Right shall not be reduced after the date of grant.

          (h) The Committee may impose such terms and conditions on Stock Appreciation Rights granted in connection with any Award (other than an Option) as the Committee shall determine in its sole discretion.

8. Restricted Stock Awards.

     8.1 Grant. An Eligible Recipient may be granted one or more Restricted Stock Awards under the Plan, and such Restricted Stock Awards will be subject to such terms and conditions, consistent with the provisions of the Plan, as may be determined by the Committee in its sole discretion and reflected in the award agreement evidencing such Restricted Stock Award. The Committee may impose such restrictions or conditions, not inconsistent with the provisions of the Plan, to the vesting of such Restricted Stock Awards as it deems appropriate, including, without limitation, that the Participant remain in the continuous employ or service of the Company or a Subsidiary for a certain period or that the Participant or the Company (or any Subsidiary or division thereof) satisfy certain performance criteria. Notwithstanding the foregoing and except as result of a Participant’s death or Disability or in connection with a Change of Control of the Company, Restricted Stock Awards that provide for (a) vesting upon the satisfaction of certain performance criteria shall vest over a period of not less than one year from its date of grant and (b) time based vesting shall vest over a period of not less than three years from its date of grant; provided, however, that Restricted Stock Awards granted in lieu of some other form of compensation to an Eligible Recipient would be permitted without such vesting restrictions.

     8.2 Rights as a Stockholder; Transferability. Except as provided in Sections 8.1, 8.3 and 14.3 of the Plan, a Participant will have all voting, dividend, liquidation and other rights with respect to shares of Common Stock issued to the Participant as a Restricted Stock Award under this Section 8 upon the Participant becoming the holder of record of such shares as if such Participant were a holder of record of shares of unrestricted Common Stock.

     8.3 Dividends and Distributions. Unless the Committee determines otherwise in its sole discretion (either in the agreement evidencing the Restricted Stock Award at the time of grant or at any time after the grant of the Restricted Stock Award), any dividends or distributions (including regular quarterly cash dividends) paid with respect to shares of Common Stock subject to the unvested portion of a Restricted Stock Award will not be subject to the same restrictions as the shares to which such dividends or distributions relate and will be paid currently to the Participant. In the event the Committee determines not to pay such dividends or distributions currently, the Committee will determine in its sole discretion whether any interest will be paid on such dividends or distributions. In addition, the Committee, in its sole discretion, may require such dividends and distributions to be reinvested (and in such case the Participants consent to such reinvestment) in shares of Common Stock that will be subject to the same restrictions as the shares to which such dividends or distributions relate.

     8.4 Enforcement of Restrictions. To enforce the restrictions referred to in this Section 8, the Committee may (a) place a legend on the stock certificates referring to such restrictions and may require Participants, until the restrictions have lapsed, to keep the stock certificates, together with duly endorsed stock powers, in the custody of the Company or its transfer agent, or (b) maintain evidence of stock ownership, together with duly endorsed stock powers, in a certificateless book-entry stock account with the Company’s transfer agent for its Common Stock.

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9. Performance Units.

     An Eligible Recipient may be granted one or more Performance Units under the Plan, and such Performance Units will be subject to such terms and conditions, consistent with the other provisions of the Plan, as may be determined by the Committee in its sole discretion. The Committee may impose such restrictions or conditions, not inconsistent with the provisions of the Plan, to the vesting of such Performance Units as it deems appropriate, including, without limitation, that the Participant remain in the continuous employ or service of the Company or any Subsidiary for a certain period or that the Participant or the Company (or any Subsidiary or division thereof) satisfy certain performance goals or criteria. The Committee will have the sole discretion to determine the form in which payment of the economic value of Performance Units will be made to a Participant (i.e., cash, Common Stock, Stock Units or any combination of the foregoing) or to consent to or disapprove the election by a Participant of the form of such payment. Notwithstanding the foregoing, Performance Units that provide for vesting upon the satisfaction of certain performance criteria shall vest over a period of not less than three years from its date of grant; provided, however, that Performance Units granted in lieu of some other form of compensation to an Eligible Recipient would be permitted without such vesting restrictions.

10. Performance-Based Compensation Provisions.

     The Committee, when it is comprised solely of two or more outside directors meeting the requirements of Section 162(m), in its sole discretion, may designate whether any Incentive Awards are intended to be “performance-based compensation” within the meaning of Section 162(m). Any Incentive Awards so designated will, to the extent required by Section 162(m), be conditioned on the achievement of one or more Performance Goals, and such Performance Goals will be established by the Committee within the time period prescribed by, and will otherwise comply with the requirements of, Section 162(m) giving due regard to the disparate treatment under Section 162(m) of the stock options and stock appreciation rights where compensation is determined based solely on an increase in the value of the underlying stock after the date of grant or award, as compared to other forms of compensation, including restricted stock awards. The maximum dollar value payable to any Participant with respect to Incentive Awards that are designated as such “performance-based compensation” and that are valued with reference to property other than shares of Common Stock may not exceed $5,000,000 in the aggregate during any period of three consecutive fiscal years of the Company. Such Committee shall also certify in writing that such performance goals have been met prior to payment of compensation to the extent required by Section 162(m).

11. Effect of Termination of Employment or Other Service.

     11.1 Rights Upon Termination. The Committee will have the authority, in its sole discretion, to determine the effect that termination of a Participant’s employment or other service with the Company and all Subsidiaries, whether due to death, Disability, Retirement or any other reason, will have on outstanding Incentive Awards then held by such Participant.

     11.2 Modification of Rights Upon Termination. Notwithstanding the other provisions of this Section 11, upon a Participant’s termination of employment or other service with the Company and all Subsidiaries, the Committee may, in its sole discretion (which may be exercised at any time on or after the date of grant, including following such termination), cause Options (or any part thereof) or Stock Appreciation Rights then held by such Participant to become or continue to become exercisable and/or remain exercisable following such termination of employment or service and Restricted Stock Awards and Performance Units then held by such Participant to vest and/or continue to vest or become free of restrictions following such termination of employment or service, in each case in the manner determined by the Committee; provided, however, that no Option, Stock Appreciation Right or Restricted Stock Award may continue to vest beyond its expiration date.

     11.3 Date of Termination of Employment or Other Service. Unless the Committee otherwise determines in its sole discretion, a Participant’s employment or other service will, for purposes of the Plan, be deemed to have terminated on the date recorded on the personnel or other records of the Company or the Subsidiary for which the Participant provides employment or other service, as determined by the Committee in its sole discretion based upon such records.

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12. Payment of Withholding Taxes.

     12.1 General Rules. The Company is entitled to (a) withhold and deduct from future wages of the Participant (or from other amounts which may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all legally required amounts necessary to satisfy any and all federal, state and local withholding and employment-related tax requirements attributable to an Incentive Award, including, without limitation, the grant, exercise or vesting of, or payment of dividends with respect to, an Incentive Award or a disqualifying disposition of stock received upon exercise of an Incentive Stock Option, or (b) require the Participant promptly to remit the amount of such withholding to the Company before taking any action with respect to an Incentive Award.

     12.2 Special Rules. The Committee may, in its sole discretion and upon terms and conditions established by the Committee, permit or require a Participant to satisfy, in whole or in part, any withholding or employment-related tax obligation described in Section 12.1 of the Plan (up to the minimum statutory rate) by electing to tender Previously Acquired Shares, a Broker Exercise Notice or a promissory note (on terms acceptable to the Committee in its sole discretion), or by a combination of such methods.

13. Change of Control.

     13.1 Definitions. For purposes of this Section 13, the following definitions will apply:

          (a) “Benefit Plan” means any formal or informal plan, program or other arrangement heretofore or hereafter adopted by the Company or any Subsidiary for the direct or indirect provision of compensation to the Participant (including groups or classes of participants or beneficiaries of which the Participant is a member), whether or not such compensation is deferred, is in the form of cash or other property or rights, or is in the form of a benefit to or for the Participant.

          (b) “Change of Control” means any of the following events:

               (1) a merger or consolidation to which the Company is a party if the individuals and entities who were stockholders of the Company immediately prior to the effective date of such merger or consolidation have beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of less than 50% of the total combined voting power for election of directors of the surviving corporation immediately following the effective date of such merger or consolidation;

               (2) the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) in the aggregate of securities of the Company representing 25% or more of the total combined voting power of the Company’s then issued and outstanding securities by any person or entity, or group of associated persons or entities acting in concert;

               (3) the sale of the properties and assets of the Company, substantially as an entirety, to any person or entity which is not a wholly-owned subsidiary of the Company;

               (4) the stockholders of the Company approve any plan or proposal for the liquidation of the Company; or

               (5) a change in the composition of the Board at any time during any consecutive 24 month period such that the “Continuity Directors” cease for any reason to constitute at least a 70% majority of the Board. For purposes of this clause, “Continuity Directors” means those members of the Board who either (1) were directors at the beginning of such consecutive 24 month period, or (2) were elected by, or on the nomination or recommendation of, at least a two-thirds majority of the then-existing Board of Directors.

     13.2 Effect of a Change of Control. The Committee will have the authority, in its sole discretion, to determine the effect that a Change of Control of the Company will have on outstanding Incentive Awards then held by such Participant.

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     13.3 Authority to Modify Change of Control Provisions. Prior to a Change of Control of the Company, unless otherwise provided in the agreement evidencing the Incentive Award, the Participant will have no rights under this Section 13, and the Committee will have the authority, in its sole discretion, to rescind, modify or amend the provisions of this Section 13 without the consent of any Participant.

14. Rights of Eligible Recipients and Participants; Transferability.

     14.1 Employment or Service. Nothing in the Plan will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or service of any Eligible Recipient or Participant at any time, nor confer upon any Eligible Recipient or Participant any right to continue in the employ or service of the Company or any Subsidiary.

     14.2 Rights as a Stockholder. As a holder of Incentive Awards (other than Restricted Stock Awards), a Participant will have no rights as a stockholder unless and until such Incentive Awards are exercised for, or paid in the form of, shares of Common Stock and the Participant becomes the holder of record of such shares. Except as provided in Section 14.3 or as otherwise provided in the Plan, no adjustment will be made for dividends or distributions with respect to such Incentive Awards as to which there is a record date preceding the date the Participant becomes the holder of record of such shares.

     14.3 Dividend Equivalents. Subject to the provisions of the Plan and any Incentive Award, the recipient of an Incentive Award (including any Incentive Award deferred in accordance with procedures established pursuant to Section 3(d)) may, if so determined by the Committee, be entitled to receive, currently or on a deferred basis, cash, stock or other property dividends, or cash payments in amounts equivalent to cash, stock or other property dividends on shares of Common Stock (“Dividend Equivalents”) with respect to the number of shares of Common Stock covered by the Incentive Award, as determined by the Committee, in its sole discretion, and the Committee may provide that such amounts (if any) shall be deemed to have been reinvested in additional shares or otherwise reinvested.

     14.4 Restrictions on Transfer.

          (a) Except pursuant to testamentary will or the laws of descent and distribution and except as expressly permitted by Section 14.4(b) of the Plan, no right or interest of any Participant in an Incentive Award prior to the exercise or vesting of such Incentive Award will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise. A Participant will, however, be entitled to designate a beneficiary to receive an Incentive Award upon such Participant’s death. In the event of a Participant’s death, payment of any amounts due under the Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 11 of the Plan) will be made by, the Participant’s designated beneficiary. For purposes of the Plan, a “designated beneficiary” will be the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee will require in its sole discretion. If a Participant fails to designate a beneficiary, or if the designated beneficiary does not survive the Participant or dies before the designated beneficiary’s exercise of all rights under the Plan, payment of any amounts due under the Plan will be made to, and exercise of any Options or Stock Appreciation Rights (to the extent permitted pursuant to Section 11 of the Plan) may be made by, the Participant’s personal representative.

          (b) The Committee may, in its discretion, authorize all or a portion of the Options to be granted to a Participant to be on terms which permit transfer by such Participant to (i) the spouse, ex-spouse, children, step-children or grandchildren of the Participant (the “Family Members”), (ii) a trust or trusts for the exclusive benefit of such Family Members, (iii) a partnership in which such Family Members are the only partners, or (iv) such other persons or entities as the Committee, in its discretion, may permit, provided that (1) there may be no consideration for such a transfer (other than the possible receipt of an ownership interest in an entity to which such a transfer is made), (2) the award agreement pursuant to which such Options are granted must be approved by the Committee and must expressly provide for transferability in a manner consistent with this Section 14.4(b), (3) timely written notice of the transfer must be provided to the Company by the Participant, and (4) subsequent transfers of the transferred Options shall be prohibited except for those in accordance with Section 14.4(a).

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Following transfer, any such Option and the rights of any transferee with respect thereto will continue to be subject to the same terms and conditions as were applicable immediately prior to the transfer, including that the events of termination of employment or other service as provided in the Plan and in any applicable award agreement will continue to be applied with respect to the original Participant, with the transferee bound by the consequences of any such termination of employment or service as specified in the Plan and the applicable award agreement. The Company will be under no obligation to provide notice of termination of a Participant’s employment or other service to any transferee of such Participant’s Options. Notwithstanding any Option transfer pursuant to this Section 14.4(b), the Participant will remain subject to and liable for any employment-related taxes in connection with the exercise of such Option.

     14.5 Non-Exclusivity of the Plan. Nothing contained in the Plan is intended to modify or rescind any previously approved compensation plans or programs of the Company or create any limitations on the power or authority of the Board to adopt such additional or other compensation arrangements as the Board may deem necessary or desirable.

15. Securities Law and Other Restrictions.

     Notwithstanding any other provision of the Plan or any agreements entered into pursuant to the Plan, the Company will not be required to issue any shares of Common Stock under this Plan, and a Participant may not sell, assign, transfer or otherwise dispose of shares of Common Stock issued pursuant to Incentive Awards granted under the Plan, unless (a) there is in effect with respect to such shares a registration statement under the Securities Act and any applicable state securities laws or an exemption from such registration under the Securities Act and applicable state securities laws, and (b) there has been obtained any other consent, approval or permit from any other regulatory body which the Committee, in its sole discretion, deems necessary or advisable. The Company may condition such issuance, sale or transfer upon the receipt of any representations or agreements from the parties involved, and the placement of any legends on certificates representing shares of Common Stock, as may be deemed necessary or advisable by the Company in order to comply with such securities law or other restrictions.

16. Plan Amendment, Modification and Termination.

     The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in order that Incentive Awards under the Plan will conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company; provided, however, that no Material Amendment of the Plan shall be made without approval of the stockholders of the Company. For the purposes hereof, a “Material Amendment of the Plan” shall mean any amendment that (a) requires stockholder approval pursuant to Section 422 of the Code or the rules of the New York Stock Exchange or (b) increases the authorized shares, the benefits to Participants, or the class of Participants under the Plan. No termination, suspension or amendment of the Plan may adversely affect any outstanding Incentive Award without the consent of the affected Participant; provided, however, that this sentence will not impair the right of the Committee to take whatever action it deems appropriate under Section 4.4 and Section 13 of the Plan.

17. Effective Date and Duration of the Plan.

     The Plan is effective as of February 3, 1999, the date it was adopted by the Board. The Plan will terminate at midnight on February 2, 2009, and may be terminated prior thereto by Board action, and no Incentive Award will be granted after such termination. Incentive Awards outstanding upon termination of the Plan may continue to vest, or become free of restrictions, in accordance with their terms.

18. Miscellaneous.

     18.1 Governing Law. The validity, construction, interpretation, administration and effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by and construed exclusively in accordance with the laws of the State of Delaware.

     18.2 Successors and Assigns. The Plan will be binding upon and inure to the benefit of the successors and permitted assigns of the Company and the Participants.

As Amended: May 15, 2007

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EX-31.1

Exhibit 31.1

302(a) CERTIFICATION

I, Stephen B. Morris, President and Chief Executive Officer of Arbitron Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arbitron Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

          c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

          a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2007	/s/ Stephen B. Morris
	Stephen B. Morris
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

302(a) CERTIFICATION

I, Sean R. Creamer, Executive Vice President of Finance and Planning and Chief Financial Officer of Arbitron Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Arbitron Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

          a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

          c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

          a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2007	/s/ Sean R. Creamer
	Sean R. Creamer
	Executive Vice President of Finance and Planning and Chief Financial Officer

EX-32.1

Exhibit 32.1

WRITTEN STATEMENT OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
(18 U.S.C. Section 1350)

The undersigned, the Chief Executive Officer and the Chief Financial Officer of Arbitron Inc. (the “Company”), each hereby certifies that, to his knowledge, on the date hereof:

(a)	the Form 10-Q of the Company for the quarter ended June 30, 2007, filed on the date hereof with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(b)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Stephen B. Morris

Stephen B. Morris

Chief Executive Officer

Date: August 3, 2007

/s/ Sean R. Creamer

Sean R. Creamer

Chief Financial Officer

Date: August 3, 2007