Emmis Communications Reports 2nd Q Results

Guidance & Wall Street Estimates Exceeded; Free Cash Flows Doubles from Prior Year

Emmis Communications Corporation (NASDAQ: EMMS) today announced revenues and cash flow for its second fiscal quarter ending August 31, 2002. Net revenue for the quarter was $143.2 million and Broadcast Cash Flow (BCF) was $57.3 million. On a pro forma basis, after giving effect to the sale of our Denver radio stations, net revenue increased 1.3% and BCF increased 2.6%. As reported, compared to the same quarter for the prior year, net revenue was down slightly, whereas BCF was up slightly.

These results exceed revenue guidance of $138.8 million and cash flow guidance $54.5 million, as well as Wall Street estimates for revenues and cash flow. Earnings Per Share (EPS) before accounting charge and extraordinary loss was $0.04, also exceeding Wall Street estimates.

Another measure the company uses to determine performance is Free Cash Flow (FCF), which it defines as net revenues less segment operating expenses, corporate expenses, interest expense (including interest associated with its 121/2 % Senior Discount Notes), cash taxes, capital expenditures, and preferred dividends. For the 2nd Quarter, FCF was $15.2 million compared to $7.2 million in the same quarter of the prior year.

“We had a tremendous quarter – and our next quarter looks much stronger,” Emmis Chairman and CEO Jeff Smulyan said. “We exceeded the guidance we set forth in July and have continued to consistently reduce our leverage. Most importantly, our television division has made remarkable gains in audience and revenue, and our radio group has had significant gains in audience and revenue in all of our markets. Even in New York City, where we have faced considerable competition, the last ratings and revenue pacings indicate we are meeting the challenge. In an uncertain economy, our people have performed extremely well. This company owes a debt of gratitude to every one of our employees.”

After Tax Cash Flow (ATCF) for the quarter was $26.4 million or $0.50 per diluted share as compared to $22.6 million and $0.47 per share for the same quarter last year.

During its 2nd quarter, the company amended its credit facility to provide for up to a $60.2 million redemption of its 121/2% Senior Discount Notes due in 2011. The amendment also reduced Emmis’ interest cost on $500.0 million of its bank debt by at least 1%. In addition, the company announced in mid-June that it had appointed Ernst & Young LLP as the company?s independent auditor, replacing Arthur Andersen LLP.

3rd Quarter Guidance

Quarter ended 11/30/02 Quarter ended 11/30/01 (A) % Change

Net Revenues:

Domestic Radio $61,300 $59,218 3.5

Foreign Radio 2,700 4,384 -38.4

Total Radio 64,000 63,602 0.6

Television 63,000 52,556 19.9

Publishing 18,800 19,110 -1.6

Total net revenues 145,800 135,268 7.8

BCF/PCF:

Domestic Radio 29,500 28,779 2.5

Foreign Radio 300 679 -55.8

Total Radio 29,800 29,458 1.2

Television 24,500 16,597 47.6

Publishing 3,100 2,828 9.6

Total BCF/PCF 57,400 48,883 17.4

Corporate Expenses 5,200 5,354 -2.9

EBITDA $52,200 $43,529 19.9

(before certain charges)

(A) Pro forma for the sale of Denver radio stations in May 2002. Revenues and expenses have been adjusted by approximately $1.2 million to reflect the reclassification of expenses related to non-traditional revenue.

Emmis will host a conference call regarding this information on Thursday, Oct. 3 at 9 a.m. Eastern at 1.712.271.0650, with a replay available until Thursday, Oct. 10 by calling 1.402.220.3493 or listen on-line by logging on to www.emmis.com.