Emmis Communications Reports Solid Second Quarter Pro Forma Revenue Growth

Indianapolis… Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its second fiscal quarter ending August 31, 2012.

While the Company’s reported results are negatively impacted by station divestitures over the past twelve months, on a pro forma basis, net revenue for the second fiscal quarter increased 1 percent, from $54.4 million to $55.0 million.  Pro forma radio net revenues increased 2 percent, from $41.4 million to $42.0 million.  This growth in radio revenues outpaced market revenue growth in the quarter, which was less than 1 percent.

“Emmis has continued its strong operating performance, with our revenue growth exceeding the revenue growth of our markets in every month this calendar year,” Jeff Smulyan, Emmis Chairman & CEO, said. “Ratings remain very strong. In the month of September, our two most-listened-to stations, Hot97 in New York and Power 106 in Los Angeles, were #1 in their target 18-34 demographic.”

“We are actively pursuing a refinancing of our entire capital structure that will dramatically reduce our interest expense and increase our free cash flow going forward,” Smulyan concluded.

Station operating income during the period was $13.8 million, compared to $10.7 million for the same quarter of the prior year.  Diluted net income per common share from continuing operations was ($0.08), compared to ($0.15) for the same quarter of the prior year.

Emmis has included supplemental pro forma net revenues, station operating expenses, and certain other financial data on its website, www.emmis.com under the “Investors” tab.

The following table reconciles reported results to pro forma results (dollars in thousands):

Emmis generally evaluates the performance of its operating entities based on station operating income. Management believes that station operating income is useful to investors because it provides a meaningful comparison of operating performance between companies in the industry and serves as an indicator of the market value of a group of stations or publishing entities. Station operating income is generally recognized by the broadcast and publishing industries as a measure of performance and is used by analysts who report on the performance of broadcasting and publishing groups. Station operating income does not take into account Emmis’ debt service requirements and other commitments, and, accordingly, station operating income is not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis’ business or other discretionary uses.

Station operating income is not a measure of liquidity or of performance, in accordance with accounting principles generally accepted in the United States, and should be viewed as a supplement to, and not a substitute for, our results of operations presented on the basis of accounting principles generally accepted in the United States. Operating Income is the most directly comparable financial measure in accordance with accounting principles generally accepted in the United States. 

Moreover, station operating income is not a standardized measure and may be calculated in a number of ways. Emmis defines station operating income as revenues net of agency commissions and station operating expenses, excluding depreciation, amortization and non-cash compensation.  A reconciliation of station operating income to operating income is attached to this press release. 

The information in this news release is being widely disseminated in accordance with the Securities & Exchange Commission’s Regulation FD.

Emmis Communications – Great Media, Great People, Great Service®
Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis operates the 9th largest publicly traded radio portfolio in the United States based on total listeners. Emmis owns 18 FM and two AM radio stations in New York, Los Angeles, St. Louis, Austin (Emmis has a 50.1% controlling interest in Emmis’ radio stations located there), Indianapolis and Terre Haute, IN.

Note: Certain statements included in this press release which are not statements of historical fact, including but not limited to those identified with the words “expect,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement.

Such factors include, among others:

• general economic and business conditions;
• fluctuations in the demand for advertising and demand for different types of advertising media; 
• our ability to service our outstanding debt;
• increased competition in our markets and the broadcasting industry;
• our ability to attract and secure programming, on-air talent, writers and photographers;
• inability to obtain (or to obtain timely) necessary approvals for purchase or sale transactions or to complete the transactions for other reasons generally beyond our control;
• increases in the costs of programming, including on-air talent; 
• inability to grow through suitable acquisitions or to consummate dispositions; 
• changes in audience measurement systems
• new or changing regulations of the Federal Communications Commission or other governmental agencies;
• competition from new or different technologies; 
• war, terrorist acts or political instability; and 
• other factors mentioned in documents filed by the Company with the Securities and Exchange Commission. 

Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise

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