Emmis Communications Reports Solid Second Quarter Pro Forma Revenue Growth

Emmis Communications Reports Solid Second Quarter Pro Forma Revenue Growth

INDIANAPOLIS, Oct. 11, 2012 /PRNewswire/ -- 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):


Three Months ended August 31, % Six Months ended August 31, %
2012 2011 Change 2012 2011 Change
---- ---- ------ ---- ---- ------

Radio:
------
Reported net revenues $44,604 $48,278 -8% $83,230 $91,898 -9%

Less: Net revenues from Merlin stations and WRKS (98.7FM) (2,584) (6,903) (5,463) (15,545)
------ ------ ------ -------

Pro forma net revenues $42,020 $41,375 2% $77,767 $76,353 2%
======= ======= ======= =======

Total Company:
--------------
Reported net revenues $57,569 $61,344 -6% $110,287 $118,470 -7%

Less: Net revenues from Merlin stations and WRKS (98.7FM) (2,584) (6,903) (5,463) (15,545)
------ ------ ------ -------

Pro forma net revenues $54,985 $54,441 1% $104,824 $102,925 2%
======= ======= ======== ========


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




EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL DATA
(Unaudited, dollars in thousands, except per share data)




Three months ended August 31, Six months ended August 31,
----------------------------- ---------------------------

2012 2011 2012 2011
---- ---- ---- ----
OPERATING DATA:
Net revenues:
Radio $44,604 $48,278 $83,230 $91,898
Publishing 12,965 13,066 27,057 26,572
Total net revenues 57,569 61,344 110,287 118,470
Station operating expenses excluding
depreciation and amortization expense:
Radio 30,257 37,754 60,837 70,678
Publishing 13,790 12,902 28,042 27,383
Total station operating expenses excluding
depreciation and amortization expense 44,047 50,656 88,879 98,061
Corporate expenses excluding depreciation
and amortization expense 4,161 2,969 9,133 10,304
Depreciation and amortization 1,490 1,974 3,042 3,944
Impairment loss 737 - 11,708 -
(Gain) loss on sale of assets (6) 795 (10,006) 792
--- --- ------- ---

Operating income 7,140 4,950 7,531 5,369
Interest expense (7,277) (6,277) (13,444) (11,853)
Loss on debt extinguishment (601) - (1,085) (1,478)
Other (expense) income, net (195) 348 109 342
---- --- --- ---

Loss before income taxes and
discontinued operations (933) (979) (6,889) (7,620)
Provision (benefit) for income taxes 67 727 (4,266) (1,963)
--- --- ------ ------

Loss from continuing operations (1,000) (1,706) (2,623) (5,657)
Gain (loss) from discontinued operations, net of tax 41,208 (2,916) 39,958 342
------ ------ ------ ---

Net income (loss) 40,208 (4,622) 37,335 (5,315)
Net income attributable to noncontrolling interests 1,217 1,392 2,479 2,744
----- ----- ----- -----

Net income (loss) attributable to the Company 38,991 (6,014) 34,856 (8,059)
Preferred stock dividends (910) (2,563) (1,806) (5,086)
Net income (loss) attributable to common shareholders $38,081 $(8,577) $33,050 $(13,145)
======= ======= ======= ========

Amounts attributable to common shareholders:
Continuing operations (3,127) (5,689) (6,908) (13,536)
Discontinued operations 41,208 (2,888) 39,958 391
Net income (loss) attributable to common shareholders 38,081 (8,577) 33,050 (13,145)
====== ====== ====== =======

Basic net income (loss) per common share:
Continuing operations $(0.08) $(0.15) $(0.18) $(0.35)
Discontinued operations 1.06 (0.07) 1.03 0.01
Net income (loss) attributable to common shareholders $0.98 $(0.22) $0.85 $(0.34)
===== ====== ===== ======

Diluted net income (loss) per common share:
Continuing operations $(0.08) $(0.15) $(0.18) $(0.35)
Discontinued operations 1.06 (0.07) 1.03 0.01
Net income (loss) attributable to common shareholders $0.98 $(0.22) $0.85 $(0.34)
===== ====== ===== ======

Weighted average shares outstanding:
Basic 38,859 38,210 38,819 38,205
Diluted 38,859 38,210 38,819 38,205


OTHER DATA:
Station operating income (See below) 13,819 10,735 21,857 20,535
Cash paid for taxes, net of refunds 537 364 731 923
Cash paid for interest 5,547 7,235 15,377 11,977
Capital expenditures 217 1,114 980 2,355

Noncash compensation by segment:
Radio $191 $40 $292 $112
Publishing 106 7 157 14
Corporate 269 185 507 387
Total $566 $232 $956 $513
==== ==== ==== ====

COMPUTATION OF STATION OPERATING INCOME:
Operating income $7,140 $4,950 $7,531 $5,369
Plus: Depreciation and amortization 1,490 1,974 3,042 3,944
Plus: Corporate expenses 4,161 2,969 9,133 10,304
Plus: Station noncash compensation 297 47 449 126
Plus: Impairment loss 737 - 11,708 -
Less: Gain (loss) on disposal of assets (6) 795 (10,006) 792
Station operating income $13,819 $10,735 $21,857 $20,535
======= ======= ======= =======


SELECTED BALANCE SHEET INFORMATION: August 31, 2012 February 29, 2012
--------------- -----------------

Total Cash and Cash Equivalents $9,532 $5,619
Credit Agreement Debt $48,621 $203,843
Senior Unsecured Notes $37,857 $33,860
98.7FM Nonrecourse Debt $77,053 $ -




SOURCE Emmis Communications Corporation

Emmis Communications Corporation

CONTACT: Ryan Hornaday, SVP/Finance & Treasurer, rhornaday@emmis.com; or Patrick Walsh, CFO/COO, pwalsh@emmis.com, +1-317-266-0100

Web Site: http://www.emmis.com


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