Emmis Communications Reports 3rd Quarter Results

Indianapolis…Emmis Communications Corporation (NASDAQ: EMMS) today announced results for its third fiscal quarter ended Nov. 30, 2006.

“While we have been disappointed with the continued softness in our New York and Los Angeles markets, we are beginning to see signs that the worst is behind us. I’m confident that programming and management actions taken in recent months are beginning to deliver and point to better results in 2007,” Emmis Chairman and CEO Jeff Smulyan said.

For the third fiscal quarter, reported net revenue was $91.2 million, compared to $97.9 million for the same quarter of the prior year, a decrease of 6.9%. The decrease related primarily to revenue declines at Emmis’ New York and Los Angeles radio stations.

Diluted net loss per common share from continuing operations was $0.09, compared to a loss of $0.01 for the same quarter of the prior year. Emmis recorded a charge of $10.0 million in the quarter ended Nov. 30, 2006, related to debt extinguishment and refinancing activity in the quarter.

For the third quarter, reported radio net revenues decreased 9.2%, while publishing net revenues were flat.

For the third quarter, operating income was $17.5 million, compared to $24.4 million for the same quarter of the prior year, a decrease of 28.4%. Emmis’ station operating income for the third quarter was $30.2 million, compared to $37.1 million for the same quarter of the prior year, a decrease of 18.8%.

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.

International radio net revenues and station operating expenses for the quarter ended Nov. 30, 2006 were $6.9 million and $5.3 million, respectively.

On Sept. 21, Emmis announced that Emmis Operating Company (“EOC”) had commenced an offer to purchase, at par, $339.6 million of the outstanding 6 7/8% Senior Subordinated Notes due 2012, pursuant to an asset sale offer required under the indenture for a portion of the Notes and a separate tender offer for the balance of the Notes. On Oct. 20, approximately $374.9 million of the $375.0 million outstanding Notes were redeemed at par plus accrued and unpaid interest. The redemption was financed with available cash on hand from the sale of WKCF-TV in August of 2006, coupled with additional borrowings under the Company’s senior credit facility. On Dec. 29, 2006, Emmis redeemed the remaining $0.1 million of outstanding notes.

On Nov. 2, 2006, EOC amended and restated its Revolving Credit and Term Loan Agreement to provide for total borrowings of up to $600 million, including (i) a $455 million term loan and (ii) a $145 million revolver, of which $50 million may be used for letters of credit. The credit facility also provides for the ability to have incremental facilities of up to $450 million, a portion of which may be allocated to a revolver.

In connection with the redemption of substantially all of the Notes and the amendment and restatement of the credit facility, the Company recorded a loss on debt extinguishment of $10.0 million, which is recorded in its quarter ended Nov. 30, 2006.

On Nov. 2, Emmis’ Board of Director declared a special one-time dividend of $4 per common share to all shareholders. The dividend was paid on Nov. 22, which reduced shareholders’ equity by $150.2 million.

Subsequent to quarter end, the company increased its ownership in Radio Fresh! in Bulgaria. Emmis moved from minority to majority shareholder in the highly-rated national CHR station.

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

On a pro forma basis, the Company expects its radio net revenues for its quarter ending Feb. 28, 2007 to decrease low-to mid single digits and its station operating expenses to increase low single digits.

Emmis will host a call regarding this information on Tuesday, Jan. 9 at 9 a.m. Eastern at 1.517.623.4891, with a replay available through Tuesday, Jan. 16 at 1.402.220.9725. Listen online at www.emmis.com.

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. 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 non-cash compensation.

Emmis Communications – Great Media, Great People, Great Service®

Emmis is an Indianapolis-based diversified media firm with radio broadcasting, television broadcasting and magazine publishing operations. Emmis owns 21 FM and 2 AM domestic radio stations serving the nation’s largest markets of New York, Los Angeles and Chicago, as well as St. Louis, Austin, Indianapolis and Terre Haute, Ind. In May 2005, Emmis announced its intent to seek strategic alternatives for its 16 television stations, and has sold 14 of them. Emmis also owns a radio network, international radio stations, regional and specialty magazines, an interactive business and ancillary businesses in broadcast sales.

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

Note: Certain statements included in this report or in the financial statements contained herein 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:

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