Emmis Pro Forma Domestic Radio Revenues up 5% in Third Quarter

Emmis Pro Forma Domestic Radio Revenues up 5% in Third Quarter

Emmis' stations continue to outperform radio peers

INDIANAPOLIS, Jan. 10, 2013 /PRNewswire/ -- Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its third fiscal quarter ending November 30, 2012.


Pro forma for station divestitures, Emmis' domestic radio net revenues for the third fiscal quarter were up 5%. On a reported basis, total radio net revenues were up 1% and total net revenues were down slightly.

"I couldn't be more pleased with the company's outstanding operating performance," Jeff Smulyan, Emmis Chairman & CEO, said. "Emmis radio station's revenue growth continues to outpace its markets. While our markets were up 1 percent this quarter, Emmis stations saw an increase of 5 percent."

"With the refinancing of our entire capital structure that was completed after our quarter-end, we have dramatically reduced our interest expense and increased our ability to generate free cash flow going forward, completing the transformation of Emmis," Smulyan concluded.

Station operating income during the period was $13.8 million, compared to $10.0 million for the same quarter of the prior year. Diluted net income per common share from continuing operations was $0.02, compared to $1.26 for the same quarter of the prior year. The decline is due primarily to the gain on the sale of stations WKQX-FM (101.1 MHz, Chicago, IL), WLUP-FM (97.9 MHz, Chicago, IL) and WRXP-FM (101.9 MHz, New York, NY) to Merlin Media coupled with related tax benefits recognized in 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 November 30, % Nine Months ended November 30, %
2012 2011 Change 2012 2011 Change
---- ---- ------ ---- ---- ------

Radio:
------
Reported net revenues $37,238 $36,718 1% $118,085 $126,292 -6%

Less: Net revenues from Merlin (2,577) (2,822) (8,040) (18,367)
stations and WRKS (98.7FM)


Pro forma net revenues $34,661 $33,896 2% $110,045 $107,925 2%
======= ======= ======== ========

Total Company:
--------------
Reported net revenues $53,414 $53,568 0% $161,318 $169,714 -5%

Less: Net revenues from Merlin stations and WRKS
(98.7FM) (2,577) (2,822) (8,040) (18,367)
------ ------ ------ -------

Pro forma net revenues $50,837 $50,746 0% $153,278 $151,347 1%
======= ======= ======== ========
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®

About Emmis Communications

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 operates 19 FM and three AM radio stations in New York, Los Angeles, St. Louis, Austin, 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 November 30, Nine months ended November 30,
------------------------------- ------------------------------

2012 2011 2012 2011
---- ---- ---- ----
OPERATING DATA:
Net revenues:
Radio $37,238 $36,718 $118,085 $126,292
Publishing 16,176 16,850 43,233 43,422
Total net revenues 53,414 53,568 161,318 169,714
Station operating expenses excluding
depreciation and amortization expense:
Radio 25,639 28,878 82,760 95,249
Publishing 14,335 14,748 42,377 42,131
Total station operating expenses excluding
depreciation and amortization expense 39,974 43,626 125,137 137,380
Corporate expenses excluding depreciation
and amortization expense 3,717 4,972 12,850 15,276
Depreciation and amortization 1,416 1,410 4,201 4,871
Impairment loss - - 10,971 -
(Gain) loss on sale of assets (221) - (10,227) 792
---- --- ------- ---

Operating income 8,528 3,560 18,386 11,395
Interest expense (5,754) (4,341) (19,198) (16,194)
Loss on debt extinguishment (56) (525) (1,141) (2,003)
Gain on sale of controlling interest in Merlin Media LLC - 31,805 - 31,805
Other (expense) income, net 236 (394) 211 (52)
--- ---- --- ---

Income (loss) before income taxes and
discontinued operations 2,954 30,105 (1,742) 24,951
Provision (benefit) for income taxes 1,112 (28,702) (4,447) (29,332)
----- ------- ------ -------

Income from continuing operations 1,842 58,807 2,705 54,283
Gain (loss) from discontinued operations, net of tax 3,794 (105) 40,266 (896)
----- ---- ------ ----

Consolidated net income 5,636 58,702 42,971 53,387
Net income attributable to noncontrolling interests 1,036 1,069 3,515 3,813
----- ----- ----- -----

Net income attributable to the Company 4,600 57,633 39,456 49,574
Gain on extinguishment of preferred stock - 55,835 - 55,835
Preferred stock dividends - (2,603) (1,806) (7,689)
Net income attributable to common shareholders $4,600 $110,865 $37,650 $97,720
====== ======== ======= =======


Amounts attributable to common shareholders for basic earnings per share:
Continuing operations 806 110,962 (2,616) 98,559
Discontinued operations 3,794 (97) 40,266 (839)
Net income attributable to common shareholders 4,600 110,865 37,650 97,720
===== ======= ====== ======

Amounts attributable to common shareholders for diluted earnings per share:
Continuing operations 806 57,730 (2,616) 50,413
Discontinued operations 3,794 (97) 40,266 (839)
Net income attributable to common shareholders 4,600 57,633 37,650 49,574
===== ====== ====== ======

Basic net income (loss) per common share:
Continuing operations $0.02 $2.90 $(0.07) $2.58
Discontinued operations 0.10 - 1.04 (0.02)
Net income attributable to common shareholders $0.12 $2.90 $0.97 $2.56
===== ===== ===== =====

Diluted net income (loss) per common share:
Continuing operations $0.02 $1.26 $(0.07) $1.10
Discontinued operations 0.08 1.04 (0.02)
-
Net income attributable to common shareholders $0.10 $1.26 $0.97 $1.08
===== ===== ===== =====

Weighted average shares outstanding:
Basic 38,976 38,219 38,871 38,210
Diluted 45,728 45,647 38,871 45,950


OTHER DATA:
Station operating income (See below) 13,771 9,987 36,959 32,505
Cash paid for taxes, net of refunds 617 354 1,348 1,277
Cash paid for interest 2,461 8,765 17,838 20,742
Capital expenditures 1,425 810 2,393 2,875

Noncash compensation by segment:
Radio $195 $37 $485 $149
Publishing 136 8 293 22
Corporate 1,039 217 1,546 604
Total $1,370 $262 $2,324 $775
====== ==== ====== ====

COMPUTATION OF STATION OPERATING INCOME:
Operating income $8,528 $3,560 $18,386 $11,395
Plus: Depreciation and amortization 1,416 1,410 4,201 4,871
Plus: Corporate expenses 3,717 4,972 12,850 15,276
Plus: Station noncash compensation 331 45 778 171
Plus: Impairment loss - - 10,971 -
Less: Gain (loss) on disposal of assets (221) - (10,227) 792
Station operating income $13,771 $9,987 $36,959 $32,505
======= ====== ======= =======


SELECTED BALANCE SHEET INFORMATION: November 30, 2012 February 29, 2012
----------------- -----------------

Total Cash and Cash Equivalents $11,175 $5,619
Credit Agreement Debt $40,503 $203,843
Senior Unsecured Notes $40,029 $33,860
98.7FM Nonrecourse Debt $80,028 $ -
SOURCE Emmis Communications Corporation

Emmis Communications Corporation

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

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


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