Emmis Reports Higher Profit

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Indianapolis-based Emmis Communications Corp. (Nasdaq: EMMS) is reporting a fiscal fourth quarter profit of $33.1 million, compared to $4.3 million during the same period a year earlier. The company's full fiscal year profit was $43.4 million, compared to $42 million the previous year. Chief Executive Officer Jeff Smulyan says Emmis has outperformed competitors in its radio markets for the fourth-straight year. You can view Emmis fourth quarter financial data by clicking here.

April 3, 2014

News Release

INDIANAPOLIS, Ind. - Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its fourth fiscal quarter and full-year ending February 28, 2014.

Emmis' radio net revenues for the fourth fiscal quarter were up 11 percent, from $29.1 million to $32.4 million. Excluding 98.7FM in New York, which is being programmed by ESPN pursuant to an LMA, radio net revenues were up 12 percent. These results outperformed Emmis' local radio markets in which revenue growth improved 4 percent during the quarter.

For the full year, radio net revenues were $145.4 million, compared to $138.6 million in the prior year, an increase of 5 percent. These results also outperformed Emmis' local radio markets in which revenue growth improved 3 percent for the year.

Publishing net revenues were up 3 percent in the fourth fiscal quarter and 4 percent for the full year.

"Fiscal 2014 marked the fourth consecutive year we have outperformed our local radio markets and the radio industry as a whole. Our strong operating performance is the result of sound strategy and its execution by a phenomenal workforce that makes me so proud. We are very excited about the addition of WBLS and WLIB in New York and the momentum behind NextRadio as we head into fiscal 2015," Jeff Smulyan, President & CEO of Emmis said.

For the fourth fiscal quarter, operating income was $0.7 million, compared to a loss of $0.4 million for the same quarter of the prior year. Emmis' station operating income for the fourth fiscal quarter was $6.9 million, compared to $7.1 million for the same quarter of the prior year. The decrease in station operating income in the fourth fiscal quarter was due in part to recognition of incentive compensation expense based on full-year operating results that were achieved based on strong fourth quarter results, as well as several non-recurring items, including $0.7 million in severance associated with the integration of WBLS and WLIB.

For the full year, operating income was $22.2 million, compared to $16.5 million in the prior year. Emmis' station operating income in fiscal 2014 was $48.4 million, compared to $42.9 million in fiscal 2013.

During the fourth fiscal quarter, Emmis reversed substantially all of the valuation allowance previously recorded against its deferred tax assets. As a result, Emmis recorded a benefit for income taxes of approximately $35 million in the quarter.

At year-end, Emmis' leverage ratio under its senior secured credit agreement was 2.5x, marking Emmis' lowest leverage ratio since 2000.

Emmis commenced providing programming and selling advertising at WBLS and WLIB in New York pursuant to a Local Programming and Marketing Agreement ("LMA") on March 1, 2014. Because this LMA commenced on the first day of Emmis' fiscal 2015, no actual or pro forma results for these stations are included in this release. The $0.7 million severance charge recorded in Emmis' fourth fiscal quarter relates to Emmis employees in New York that were notified in February 2014 that their employment was being terminated.

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.

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.

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About Emmis Communications

Emmis Communications Corporation is a diversified media company, principally focused on radio broadcasting. Emmis operates the 9th largest radio portfolio in the United States based on total listeners. Emmis owns 18 FM and 3 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 and operates two additional stations in New York (1 FM and 1 AM) pursuant to a Local Marketing Agreement ("LMA") whereby Emmis provides the programming for these stations and sells all advertising within that programming pending its acquisition of the stations. In addition, one of the FM radio stations Emmis currently owns in New York is operated pursuant to a LMA by a third party.

Source: Emmis Communications Corp