UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

[X]  Annual Report  Pursuant to Section 13 or 15(d) of The  Securities  Exchange
     Act of 1934 for the Fiscal Year Ended February 28, 2003

[ ]  Transition  Report  Pursuant  to  Section  13 or  15(d)  of The  Securities
     Exchange Act of 1934 for the Transition Period from _________ to _________.

  EMMIS COMMUNICATIONS CORPORATION            EMMIS OPERATING COMPANY
  (Exact name of registrant as              (Exact name of registrant as
    specified in its charter)                  specified in its charter)

                INDIANA                                 INDIANA
(State of incorporation or organization)(State of incorporation or organization)

                0-23264                               333-62172-13
            (Commission file number)            (Commission file number)

               35-1542018                              35-2141064
            (I.R.S.  Employer                      (I.R.S.  Employer
           Identification No.)                     Identification No.)

              ONE EMMIS PLAZA                         ONE EMMIS PLAZA
            40 MONUMENT CIRCLE                      40 MONUMENT CIRCLE
                 SUITE 700                               SUITE 700
      INDIANAPOLIS, INDIANA 46204             INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices)(Address of principal executive offices)

             (317) 266-0100                         (317) 266-0100
    (REGISTRANT'S TELEPHONE NUMBER,          (REGISTRANT'S TELEPHONE NUMBER,
          INCLUDING AREA CODE)                    INCLUDING AREA CODE)


     SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: None

     SECURITIES  REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: Class A common
stock, $.01 par value;  6.25% Series A Cumulative  Convertible  Preferred Stock,
$.01 par value.

     Indicate by check mark whether the  registrant  (1) has filed all documents
and  reports  required  to be filed  by  Section  13 or 15(d) of the  Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter  period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [ X ] No [ ].

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 126-2 of the Act). Yes [X] No [ ].

     The aggregate  market value of the voting stock held by  non-affiliates  of
the registrant,  as of August 31, 2002, the Registrant's most recently-completed
second fiscal quarter, was approximately $738,955,000.

     The number of shares  outstanding  of each of the  registrant's  classes of
common stock, as of April 25, 2003, was:

                 49,134,869    Class A Common Shares, $.01 par value
                  5,030,002    Class B Common Shares, $.01 par value
                          0    Class C Common Shares, $.01 par value

     Emmis Operating  Company has 1,000 shares of common stock outstanding as of
April  30,  2003,  and all of these  shares  are  owned by Emmis  Communications
Corporation.

<PAGE>



                       DOCUMENTS INCORPORATED BY REFERENCE

          Documents                                          Form 10-K Reference
          ---------                                          -------------------

Proxy Statement for 2003 Annual Meeting                            Part III

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  Registrant's   Knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]




<PAGE>


                EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                  AND EMMIS OPERATING COMPANY AND SUBSIDIARIES

                                    FORM 10-K

                                TABLE OF CONTENTS

                                                                            Page

PART I  ..................................................................... 4
  Item 1.    Business........................................................ 4
  Item 2.    Properties......................................................18
  Item 3.    Legal Proceedings...............................................21
  Item 4.    Submission of Matters to a Vote of Security Holders.............21

PART II .....................................................................21
  Item 5.    Market for Registrant's Common Equity and Related
             Shareholder Matters.............................................21
  Item 6.    Selected Financial Data.........................................22
  Item 7.    Management's Discussion and Analysis of Financial
             Condition and Results of Operation..............................25
  Item 7A.   Quantitative and Qualitative Disclosures About Market Risk......40
  Item 8.     Financial Statements and Supplementary Data....................42
  Item 9.    Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure..........................93
  Item 10.   Directors and Executive Officers of the Registrant .............93

PART III
  Item 11.   Executive Compensation..........................................94
  Item 12.   Security Ownership of Certain Beneficial Owners,
             and Management, and Related Stockholder Matters.................94
  Item 13.   Certain Relationships and Related Transactions..................94
  Item 14.   Controls and Procedures.........................................94

PART IV
  Item 15.   Exhibits, Financial Statement Schedules, and Reports
             on Form 8-K. 96.................................................96
Signatures                ...................................................99



<PAGE>


                                     PART I


ITEM 1. BUSINESS.

GENERAL

     We are a  diversified  media  company with radio  broadcasting,  television
broadcasting and magazine  publishing  operations.  We operate the sixth largest
publicly traded radio  portfolio in the United States based on total  listeners.
We operate  eighteen FM radio stations and three AM radio stations in the United
States that serve the nation's three largest radio markets of New York City, Los
Angeles and  Chicago,  as well as Phoenix,  St.  Louis,  Indianapolis  and Terre
Haute, Indiana. In addition, we expect to close on our purchase of a controlling
interest  in six  stations  in Austin,  Texas  during the second  quarter of our
fiscal 2004.  The sixteen  television  stations we operate serve  geographically
diverse  mid-sized  markets in the U.S. as well as the large markets of Portland
and Orlando and have a variety of  television  network  affiliations,  including
five with CBS, five with FOX, three with NBC, one with ABC and two with WB.

     Our strategy is to selectively acquire  underdeveloped  media properties in
desirable  markets and then to create value by  developing  those  properties to
increase  their cash flow.  We find such  underdeveloped  properties  attractive
because  they offer  greater  potential  for  revenue  and cash flow growth than
mature  properties.  We have been  successful in acquiring  these types of media
properties  and  improving  their  ratings,  revenues  and  cash  flow  with our
marketing  focus  and  innovative   programming   expertise.   We  have  created
top-performing radio stations which rank, in terms of primary demographic target
audience share, among the top ten stations in the New York City, Los Angeles and
Chicago radio markets  according to the Fall 2002  Arbitron  Survey.  We believe
that our strong  large-market  radio  presence and diversity of station  formats
makes us  attractive  to a diverse  base of radio  advertisers  and  reduces our
dependence on any one economic sector or specific advertiser. Since acquisition,
we have generally improved the margins of our television stations and we believe
there is further room for margin improvement.

     In addition to our domestic  broadcasting  properties,  we operate news and
agriculture  information radio networks in Indiana,  publish Texas Monthly,  Los
Angeles,  Atlanta,  Indianapolis  Monthly,  Cincinnati,  and Country Sampler and
related magazines,  have a 59.5% interest in a national radio station in Hungary
and own 75% of one FM and one AM radio  station in Buenos Aires,  Argentina.  We
also engage in various businesses ancillary to our broadcasting  business,  such
as consulting and broadcast tower leasing.

     The  following  discussion  pertains  to Emmis  Communications  Corporation
("ECC") and its  subsidiaries  (collectively,  "Emmis" or the  "Company") and to
Emmis Operating Company and its subsidiaries  (collectively "EOC"). EOC became a
wholly owned  subsidiary of ECC in connection with the Company's  reorganization
(see Note 1c. to our consolidated financial statements) on June 22, 2001. Unless
otherwise noted, all disclosures  contained in this Form 10-K apply to Emmis and
EOC.

BUSINESS STRATEGY

     We are committed to maintaining  our leadership  position in  broadcasting,
enhancing  the  performance  of our  broadcast and  publishing  properties,  and
distinguishing ourselves through the quality of our operations.  Our strategy is
to maximize shareholder value by focusing on the following principles:

     DEVELOP INNOVATIVE PROGRAMMING.  We believe that knowledge of local markets
and innovative  programming  developed to target specific demographic groups are
the most  important  determinants  of individual  radio and  television  station
success. We conduct extensive market research to identify  underserved  segments
of the markets we serve or to assure that we are meeting the needs of our target
audience.  Utilizing the research results, we concentrate on providing a focused
programming format carefully tailored to the demographics of our markets and our
audiences' preferences.

     EMPHASIZE  FOCUSED  SALES AND MARKETING  STRATEGY.  We design our local and
national sales efforts based on advertiser  demand and our programming  compared
to the competitive  formats within each market.  We provide our sales force with
extensive  training and the technology for  sophisticated  inventory  management
techniques,  which  provide  frequent  price  adjustments  based on regional and
market conditions. Furthermore, additional company resources have been allocated
to  locate,  hire,  train and  retain top sales  people.  Under the Emmis  Sales
Assault Plan (ESAP),  a  company-wide  initiative  geared toward  attracting and
developing sales leaders in the radio,  television and magazine  industries,  we
have added nearly 200 sales people to our workforce in the last two years, which
was incremental to hirings in the normal course of business.


<PAGE>



     DEVELOP STRONG LOCAL STATION  IDENTITIES FOR OUR  TELEVISION  STATIONS.  We
strive to create  television  stations  with a strong local  "brand"  within the
station's market,  allowing viewers and advertisers to identify with the station
while  building  the  station's  franchise  value.  We believe  that  aggressive
promotion and strong local station  management,  strategies  which we have found
successful in our radio operations, are critical to the creation of strong local
television  stations as well.  Additionally,  we believe that the production and
broadcasting  of local news and events  programming  can be an important link to
the  community  and an aid to the  station's  efforts to expand its  viewership.
Local news and events  programming  can provide  access to  advertising  sources
targeted specifically to the local or regional community. We believe that strong
local news  generates  high  viewership  and results in higher  ratings both for
programs preceding and following the news.

     PURSUE  STRATEGIC  ACQUISITIONS  AND CREATE CASH FLOW  GROWTH BY  ENHANCING
STATION  PERFORMANCE.  We have  built our  portfolio  by  selectively  acquiring
underdeveloped  media  properties in desirable  markets at  reasonable  purchase
prices where our experienced  management team has been able to enhance value. We
intend  to  pursue  acquisitions  of radio  stations,  where we  believe  we can
increase  operating  income,  in our  current  markets.  We will  also  consider
acquisitions  of individual  radio  stations or groups of radio  stations in new
markets  where we expect we can achieve a leadership  position.  We believe that
continued   consolidation  in  the  radio  broadcasting   industry  will  create
attractive acquisition opportunities as the number of potential buyers for radio
assets  declines  due to  government  regulations  on the  number of  stations a
company  can  own  in  one  market.  We  believe  that  attractive   acquisition
opportunities  are also  increasingly  available in the television  broadcasting
industry.  We intend to evaluate  acquisitions of magazine publishing properties
and  international   broadcasting   properties  that  present  opportunities  to
capitalize  on our  management  expertise  to  enhance  cash flow at  attractive
purchase price multiples with minimal capital requirements.

     ENCOURAGE A PERFORMANCE  BASED,  ENTREPRENEURIAL  MANAGEMENT  APPROACH.  We
believe that  broadcasting  is  primarily a local  business and that much of its
success is the result of the efforts of regional and local management and staff.
We have  attracted and retained an experienced  team of broadcast  professionals
who  understand  the  viewing  and  listening   preferences,   demographics  and
competitive opportunities of their particular market. Our decentralized approach
to station  management  gives local  management  oversight of station  spending,
long-range  planning and resource allocation at their individual  stations,  and
rewards all employees  based on those  stations'  performance.  In addition,  we
encourage our managers and employees to own a stake in the company, and over 95%
of all  full-time  employees  have an equity  ownership  position  in Emmis.  We
believe that our  performance  based,  entrepreneurial  management  approach has
created  a  distinctive  corporate  culture,  making  Emmis a  highly  desirable
employer in the broadcasting industry and significantly enhancing our ability to
attract and retain experienced and highly motivated employees and management.


<PAGE>


RADIO STATIONS

     In the  following  table,  "Market  Rank by  Revenue" is the ranking of the
market  revenue size of the  principal  radio market served by the station among
all radio markets in the United States.  Market revenue and ranking  figures are
from Duncan's Radio Market Guide (2002 ed.). We own a 40% equity interest in the
publisher  of Duncan's  Radio  Market  Guide.  "Ranking  in Primary  Demographic
Target" is the  ranking of the  station  among all radio  stations in its market
based on the Fall 2002  Arbitron  Survey.  A "t" indicates the station tied with
another station for the stated ranking.  "Station  Audience Share"  represents a
percentage generally computed by dividing the average number of persons over age
12  listening  to a  particular  station  during  specified  time periods by the
average number of such persons for all stations in the market area as determined
by Arbitron.
<TABLE>
<CAPTION>

                                                                                             RANKING IN
                           MARKET                                        PRIMARY              PRIMARY           STATION
     STATION AND           RANK BY                                     DEMOGRAPHIC           DEMOGRAPHIC        AUDIENCE
        MARKET             REVENUE        FORMAT                       TARGET AGES             TARGET            SHARE
        ------             -------        ------                       -----------             ------            -----
<S>                          <C>       <C>                                <C>                    <C>              <C>
Los Angeles, CA               1
              KPWR-FM                   Hip-Hop/R&B                        12-24                  1                5.4
              KZLA-FM                   Country                            25-54                  21               1.9

New York, NY                  2
              WQHT-FM                   Hip-Hop                            12-24                  1                4.8
              WQCD-FM                   Smooth Jazz                        25-54                  7                3.7
              WRKS-FM                   Classic Soul / Today's R&B         25-54                  3                4.1

Chicago, IL                   3
              WKQX-FM                   Alternative Rock                   18-34                  6                2.4

Phoenix, AZ                  14
              KTAR-AM                   News/Talk/Sports                   35-64                  5                4.9
              KKFR-FM                   Rythmic CHR                        18-34                  4                3.8
              KKLT-FM                   Adult Contemporary                 25-54                  6t               3.6
              KMVP-AM                   Sports                             25-54                 21t               0.8

St. Louis, MO                18
              KSHE-FM                   Album Oriented Rock                25-54                  1                5.5
              KPNT-FM                   Alternative Rock                   18-34                  2                3.7
              KIHT-FM                   Classic Hits                       25-54                  3                4.1
              WMLL-FM                   80's and 90's                      18-34                  11               2.8
              KFTK-FM                   Talk                               25-54                  18               1.6

Indianapolis, IN             31
              WIBC-AM                   News/Talk/Sports                   35-64                  5                7.4
              WYXB-FM                   Soft Adult Contemporary            25-54                  4                5.0
              WNOU-FM                   CHR                                18-34                  5                5.3
              WENS-FM                   Hot Adult Contemporary             25-54                  11               2.8

Austin, TX                   34
              KLBJ-AM                   News/Talk                          25-54                  3                6.8
              KLBJ-FM                   Album Oriented Rock                25-54                  4                4.5
              KXMG-FM                   CHR                                18-34                  6                3.2
              KGSR-FM                   Adult Alternative                  25-54                  5                4.1
              KROX-FM                   Alternative Rock                   18-34                  3                4.0
              KEYI-FM                   Oldies                             25-54                  9                3.4

Terre Haute, IN              171
              WTHI-FM                   Country                            25-54                  1                23.3
              WWVR-FM                   Classic Rock                       25-54                  3                12.5


</TABLE>

     In addition to our other domestic radio broadcasting operations, we own and
operate two radio networks.  Network Indiana provides news and other programming
to nearly 70 affiliated radio stations in Indiana.  AgriAmerica Network provides
farm news,  weather  information  and market  analysis to radio stations  across
Indiana.

     We also have a 59.5%  interest in a national  radio  station in Hungary and
own 75% of one FM and one AM radio station in Buenos Aires, Argentina.

     We  expect  to close  on our  purchase  of a  controlling  interest  in six
stations in Austin, Texas during the second quarter of our fiscal 2004.


<PAGE>


TELEVISION STATIONS

     In the following table, "DMA Rank" is estimated by the A.C. Nielsen Company
("Nielsen")  as of January  2002.  Rankings are based on the relative  size of a
station's  market among the 210  generally  recognized  Designated  Market Areas
("DMAs"),  as defined by Nielsen.  "Number of Stations in Market" represents the
number of television stations  ("Reportable  Stations") designated by Nielsen as
"local" to the DMA,  excluding public television  stations and stations which do
not meet minimum Nielsen reporting standards (i.e., a weekly cumulative audience
of less than 2.5%) for reporting in the Sunday  through  Saturday,  9:00 a.m. to
midnight time period.  "Station  Rank"  reflects the station's  rank relative to
other Reportable  Stations based upon the DMA rating as reported by Nielsen from
9:00 a.m. to midnight,  Sunday through  Saturday during November 2002.  "Station
Audience  Share"  reflects an estimate  of the share of DMA  households  viewing
television  received by a local commercial  station in comparison to other local
commercial stations in the market as measured from 9:00 a.m. to midnight, Sunday
through Saturday.
<TABLE>
<CAPTION>

                                                                  NUMBER OF                   STATION
  TELEVISION       METROPOLITAN       DMA        AFFILIATION/     STATIONS       STATION      AUDIENCE       AFFILIATION
   STATION        AREA SERVED        RANK         CHANNEL        IN MARKET        RANK         SHARE         EXPIRATION
   --------       ------------       -----        --------       ----------       -----        ------        ----------
<S>              <C>                  <C>           <C>              <C>           <C>           <C>      <C>
WKCF-TV          Orlando, FL           20           WB/18             6             4             7        December 31, 2009
KOIN-TV          Portland, OR          23           CBS/6             7             1t           13        September 18, 2006
WVUE-TV          New Orleans, LA       42           Fox/8             7             3             9        March 5, 2006
KRQE-TV          Albuquerque, NM       49          CBS/13             7             1t           11        September 18, 2006
WSAZ-TV          Huntington, WV/
                 Charleston, WV        61           NBC/3             4             1            22        January 1, 2009
WALA-TV          Mobile, AL/
                 Pensacola, FL         63          Fox/10             6             4            10        August 24, 2006
WBPG-TV (1)      Mobile, AL/
                 Pensacola, FL         63           WB/55             6             6            NM        August 31, 2006
KSNW-TV          Wichita, KS           66           NBC/3             4             2            14        January 1, 2009
WLUK-TV          Green Bay, WI         69          Fox/11             6             3            13        November 1, 2005
WFTX-TV          Fort Myers, FL        70          Fox/36             6             3t            8        N/A
KGMB-TV (2)      Honolulu, HI          71           CBS/9             5             1            13        September 18, 2006
KHON-TV (2)      Honolulu, HI          71           Fox/2             5             2            12        August 2, 2006
KGUN-TV          Tucson, AZ            73           ABC/9             7             1t           14        February 6, 2005
KMTV-TV          Omaha, NE             74           CBS/3             5             3            14        September 18, 2006
KSNT-TV          Topeka, KS           138          NBC/27             4             2            15        January 1, 2009
WTHI-TV          Terre Haute, IN      146          CBS/10             3             1            23        December 31, 2005

</TABLE>

(1)  We purchased this station on March 1, 2003

(2)  We are currently  operating  KGMB-TV under a temporary waiver issued by the
     FCC.  We may be required to sell one of these  stations.  See  Management's
     Discussion  and Analysis of Financial  Condition  and Results of Operations
     for further discussion.

     Emmis  also  owns and  operates  nine  satellite  stations  that  primarily
re-broadcast  the signal of certain of our local  stations.  A local station and
its satellite station are considered one station for FCC and multiple  ownership
purposes, provided that the stations are in the same market.

     Each of our television stations is affiliated with CBS, NBC, ABC, Fox or WB
(each a "Network") pursuant to a written network affiliation  agreement,  except
WFTX in Ft.  Myers,  FL,  which  is  affiliated  with  Fox  pursuant  to an oral
affiliation  agreement.  Each  affiliation  agreement  provides  the  affiliated
television station with the right to rebroadcast all programs transmitted by the
Network with which the television station is affiliated.  In return, the Network
has the right to sell a substantial  portion of the advertising time during such
broadcasts.

     The long established Networks (ABC, CBS and NBC) have historically paid the
affiliated  station  to  broadcast  the  Network's  programming.   This  Network
compensation  payment  used to vary  depending on the time of day that a station
broadcasts the network programming.  Typically, prime-time programming generated
the highest hourly network compensation  payments. In the recent years, however,
ABC, CBS and NBC have begun to eliminate or sharply reduce compensation payments
to stations for clearance of Network programming.  In some cases,  Networks have
undertaken to cut compensation  when a station is to be sold and the affiliation
agreement is to be assigned or transferred, or when an old affiliation agreement
has expired.  The more recently  established Networks (Fox and WB) generally pay
little or no cash  compensation for the clearance of network  programming.  They
tend, however, to offer the affiliated station more advertising availability for
local sale within Network programming than do the long established  networks. In
the years ended February  2001,  2002 and 2003, we received  approximately  $2.5
million, $4.6 million and $3.3 million in network compensation  payments,  which
represented less than 1% of our total net revenues in each year.


<PAGE>


PUBLISHING OPERATIONS

     We publish the following magazines through our publishing division:

                                                               Monthly
                                                                Paid
                                                             Circulation
       Regional Magazines:
       Texas Monthly                                             303,000
       Los Angeles                                               158,000
       Atlanta                                                    68,000
       Indianapolis Monthly                                       43,000
       Cincinnati Magazine                                        28,000

       Specialty Magazines*:
       Country Sampler                                           391,000
       Country Sampler Decorating Ideas                          185,000
       Country Sampler Decorating with Paint                     119,000
       Country Marketplace                                       160,000

       * Our specialty magazines are circulated bimonthly.

INTERNET AND NEW TECHNOLOGIES

     We  believe  that the  development  and  explosive  growth of the  Internet
present  not  only  a  challenge,   but  an  opportunity  for  broadcasters  and
publishers.  The primary  challenge  is increased  competition  for the time and
attention of our listeners,  viewers and readers.  The opportunity is to further
enhance  the  relationships  we already  have with our  listeners,  viewers  and
readers  by  expanding  products  and  services  offered  by  our  stations  and
magazines.  For  that  reason,  we have  individuals  at each of our  properties
dedicated to website  maintenance  and  generating  revenues from the property's
website.

     We  believe  that  there  are  opportunities  to  improve  and  expand  our
television  operations  utilizing new technologies such as those that capitalize
on the  digital  spectrum  and the  Internet.  Along with  several  other  major
television broadcasters and local stations, we have invested in iBlast Networks,
the nation's largest network for  over-the-air  distribution of digital content,
applications and services.

COMMUNITY INVOLVEMENT

     We believe that to be  successful,  we must be  integrally  involved in the
communities  we serve.  To that end, each of our stations  participates  in many
community  programs,  fundraisers  and activities that benefit a wide variety of
organizations.  Charitable organizations that have been the beneficiaries of our
marathons,  walkathons,  dance-a-thons,  concerts,  fairs and festivals include,
among others,  United Way's  September 11th Fund,  The March of Dimes,  American
Cancer Society, Riley Children's Hospital and research foundations seeking cures
for ALS, cystic fibrosis,  leukemia and AIDS and helping to fight drug abuse. In
addition to our planned  activities,  our stations and magazines take leadership
roles in community responses to natural disasters,  such as commercial-free news
broadcasts  covering  the  events  of  September  11th and the war in Iraq.  The
National  Association of Broadcasters  Education  Foundation honored us with the
Hubbard Award, honoring a broadcaster "for extraordinary  involvement in serving
the  community."  Emmis  was  only  the  second   broadcaster  to  receive  this
prestigious honor.

INDUSTRY INVOLVEMENT

     We  have  an  active   leadership   role  in  a  wide  range  of   industry
organizations.  Our  senior  managers  have  served in various  capacities  with
industry  associations,  including as directors of the National  Association  of
Broadcasters, the Television Operators Caucus, the Radio Advertising Bureau, the
Radio Futures Committee,  the Arbitron Advisory Council, and as founding members
of the Radio  Operators  Caucus.  Our chief  executive has been honored with the
National Association of Broadcasters'  "National Radio Award" and as Radio Ink's
"Radio  Executive  of the  Year."  At  various  times we have  been  voted  Most
Respected  Broadcaster in polls of radio industry chief  executive  officers and
managers  and  our  management  and  on-air   personalities  have  won  numerous
prestigious industry awards.


<PAGE>


COMPETITION

     Radio  and  television   broadcasting   stations  compete  with  the  other
broadcasting  stations in their  respective  market areas, as well as with other
advertising media such as newspapers,  magazines,  outdoor advertising,  transit
advertising,  the Internet and direct mail marketing. Cable systems generally do
not compete with local stations for programming, although various national cable
networks from time to time have acquired programs that otherwise would have been
offered  to local  television  stations.  Competition  within  the  broadcasting
industry occurs  primarily in individual  market areas, so that a station in one
market  (e.g.,  New York) does not  generally  compete  with  stations  in other
markets (e.g.,  Chicago).  In each of our markets, our stations face competition
from other stations with substantial  financial  resources,  including  stations
targeting the same  demographic  groups.  In addition to management  experience,
factors which are material to competitive position include the station's rank in
its market in terms of the number of  listeners  or viewers,  authorized  power,
assigned frequency,  audience characteristics,  local program acceptance and the
number and  characteristics  of other stations in the market area. We attempt to
improve our competitive  position with  programming  and  promotional  campaigns
aimed at the  demographic  groups  targeted by our  stations,  and through sales
efforts  designed to attract  advertisers  that have done little or no broadcast
advertising by emphasizing the effectiveness of radio and television advertising
in increasing the  advertisers'  revenues.  Changes in the policies and rules of
the FCC permit  increased joint ownership and joint operation of local stations.
Those stations taking advantage of these joint  arrangements  (including our New
York, Los Angeles,  Phoenix,  St. Louis,  Indianapolis and Terre Haute clusters)
may in certain circumstances have lower operating costs and may be able to offer
advertisers more attractive rates and services. Although we believe that each of
our stations can compete  effectively  in its market,  there can be no assurance
that any of our  stations  will be able to  maintain  or  increase  its  current
audience ratings or advertising revenue market share.

     Although the broadcasting industry is highly competitive, barriers to entry
exist.  The operation of a broadcasting  station in the United States requires a
license from the FCC.  Also,  the number of stations that can operate in a given
market is  limited  by the  availability  of the  frequencies  that the FCC will
license  in that  market,  as  well as by the  FCC's  multiple  ownership  rules
regulating  the number of stations that may be owned and  controlled by a single
entity and cross  ownership  rules which limit the types of media  properties in
any given market that can be owned by the same person.

     The broadcasting industry historically has grown in terms of total revenues
despite the introduction of new technology for the delivery of entertainment and
information, such as cable television, the Internet, satellite television, audio
tapes and compact discs. We believe that radio's portability in particular makes
it less  vulnerable  than  other  media  to  competition  from  new  methods  of
distribution  or  other  technological  advances.  There  can  be no  assurance,
however,  that the  development or  introduction  in the future of any new media
technology  will  not  have  an  adverse  effect  on  the  radio  or  television
broadcasting industry.

ADVERTISING SALES

     Our stations and magazines derive their advertising  revenue from local and
regional  advertising in the marketplaces in which they operate, as well as from
the sale of national  advertising.  Local and most regional  sales are made by a
station's  or  magazine's  sales  staff.   National  sales  are  made  by  firms
specializing in such sales which are compensated on a commission-only  basis. We
believe  that the  volume of  national  advertising  revenue  tends to adjust to
shifts in a station's  audience share position more rapidly than does the volume
of local and regional  advertising  revenue.  During the year ended February 28,
2003,  approximately  27% of our total net revenues  were derived from  national
sales and 73% were  derived from local and  regional  sales.  For the year ended
February 28,  2003,  our radio  stations  derived a higher  percentage  of their
revenues  from local and  regional  sales  (80%) than our  television  (67%) and
publishing entities (77%).

EMPLOYEES

     As of February 28, 2003 Emmis had approximately  2,400 full-time  employees
and approximately 680 part-time  employees.  We have approximately 280 employees
at various radio and  television  stations  represented  by unions.  We consider
relations with our employees to be good.


<PAGE>


INTERNET ADDRESS AND INTERNET ACCESS TO SEC REPORTS

     Our Internet address is www.emmis.com.  You may obtain through our Internet
website,  free of charge,  copies of our annual reports on Form 10-K,  quarterly
reports on Form 10-Q,  current  reports on Form 8-K, and any amendments to those
reports  filed or furnished  pursuant to Section  13(a) or 15(d) of the Exchange
Act.  These reports will be available the same day we  electronically  file such
material  with,  or furnish such  material to, the SEC. We have been making such
reports available on the same day as they are filed during the period covered by
this report.

FEDERAL REGULATION OF BROADCASTING

     Television and radio  broadcasting  are subject to the  jurisdiction of the
Federal  Communications  Commission (the "FCC") under the  Communications Act of
1934,  as  amended  (in part by the  Telecommunications  Act of 1996 (the  "1996
Act"))  (the  "Communications   Act").   Television  or  radio  broadcasting  is
prohibited  except in accordance with a license issued by the FCC upon a finding
that the public interest, convenience and necessity would be served by the grant
of such  license.  The FCC has the power to revoke  licenses  for,  among  other
things,  false statements made in applications or willful or repeated violations
of the  Communications  Act or of FCC rules. In general,  the Communications Act
provides that the FCC shall allocate broadcast licenses for television and radio
stations  in such a manner  as will  provide  a fair,  efficient  and  equitable
distribution  of service  throughout the United  States.  The FCC determines the
operating  frequency,  location and power of stations;  regulates  the equipment
used by stations;  and regulates  numerous  other areas of television  and radio
broadcasting pursuant to rules, regulations and policies adopted under authority
of the Communications Act. The Communications Act, among other things, prohibits
the  assignment  of a broadcast  license or the transfer of control of an entity
holding  such a  license  without  the  prior  approval  of the FCC.  Under  the
Communications  Act, the FCC also regulates  certain aspects of the operation of
cable television  systems and other electronic media that compete with broadcast
stations.

     The   following  is  a  brief   summary  of  certain   provisions   of  the
Communications  Act and of specific  FCC  regulations  and  policies.  Reference
should be made to the  Communications  Act as well as FCC rules,  public notices
and rulings for further information  concerning the nature and extent of federal
regulation  of  radio  and  television  stations.  Other  legislation  has  been
introduced from time to time which would amend the Communications Act in various
respects,  and the FCC from time to time considers new regulations or amendments
to its existing regulations. We cannot predict whether any such legislation will
be  enacted  or new or  amended  FCC  regulations  will be adopted or what their
effect would be on Emmis.

     LICENSE  RENEWAL.   Radio  and  television  stations  operate  pursuant  to
broadcast  licenses that are ordinarily  granted by the FCC for maximum terms of
eight years and are subject to renewal upon application to the FCC. Our licenses
currently have the following expiration dates, until renewed:



WENS(FM) (Indianapolis)               August 1, 2004
WIBC(AM) (Indianapolis)               August 1, 2004
WNOU(FM) (Indianapolis)               August 1, 2004
WYXB(FM) (Indianapolis)               August 1, 2004
WTHI-FM (Terre Haute)                 August 1, 2004
WWVR(FM) (Terre Haute)                August 1, 2004
WSAZ-TV (Huntington)                  October 1, 2004
WKQX(FM) (Chicago)                    December 1, 2004
WMLL(FM) (St. Louis)                  December 1, 2004
KSHE(FM) (St. Louis)                  February 1, 2005
WFTX-TV (Fort Myers)                  February 1, 2005
WKCF(TV) (Orlando)                    February 1, 2005
KFTK(FM) (St. Louis)                  February 1, 2005
KIHT(FM) (St. Louis)                  February 1, 2005
KPNT(FM) (St. Louis)                  February 1, 2005
WALA-TV (Mobile)                      April 1, 2005
WBPG(TV) (Mobile)                     April 1, 2005
WVUE(TV) (New Orleans)                June 1, 2005
WTHI-TV (Terre Haute)                 August 1, 2005

<PAGE>

KKLT(FM) (Phoenix)                    October 1, 2005
KKFR(FM) (Phoenix)                    October 1, 2005
KTAR(AM) (Phoenix)                    October 1, 2005
KMVP(AM) (Phoenix)                    October 1, 2005
KPWR(FM) (Los Angeles)                December 1, 2005
WLUK-TV (Green Bay)                   December 1, 2005
KZLA-FM (Los Angeles)                 December 1, 2005
KREZ-TV (Durango)                     April 1, 2006
WQHT(FM) (New York)                   June 1, 2006
WQCD(FM) (New York)                   June 1, 2006
WRKS(FM) (New York)                   June 1, 2006
KSNW(TV) (Wichita)                    June 1, 2006
KMTV(TV) (Omaha)                      June 1, 2006
KSNT(TV) (Topeka)                     June 1, 2006
KSNG(TV) (Garden City)                June 1, 2006
KSNC(TV) (Great Bend)                 June 1, 2006
KSNK(TV) (McCook-Oberlin)             June 1, 2006
KRQE(TV) (Albuquerque)                October 1, 2006
KGUN(TV) (Tucson)                     October 1, 2006
KBIM-TV (Roswell)                     October 1, 2006
KHON-TV (Honolulu)                    February 1, 2007
KAII-TV (Maui)                        February 1, 2007
KHAW-TV (Hawaii)                      February 1, 2007
KOIN(TV) (Portland)                   February 1, 2007
KGMB(TV) (Honolulu)                   February 1, 2007
KGMD-TV (Hawaii)                      February 1, 2007
KGMV(TV) (Maui)                       February 1, 2007


     Emmis  also has  filed  applications  with the FCC to  acquire  controlling
interests in six additional radio stations. The FCC licenses for these stations,
which are located in the Austin, Texas, market, will expire on August 1, 2005.

     Under  the  Communications  Act,  at the time an  application  is filed for
renewal of a station  license,  parties in  interest,  as well as members of the
public,  may apprise the FCC of the service the station has provided  during the
preceding  license  term and  urge  the  denial  of the  application.  If such a
petition to deny  presents  information  from which the FCC concludes (or if the
FCC  concludes on its own motion)  that there is a  "substantial  and  material"
question as to whether grant of the renewal  application  would be in the public
interest  under  applicable  rules and policy,  the FCC may conduct a hearing on
specified issues to determine whether the renewal application should be granted.
The  Communications  Act provides for the grant of a renewal  application upon a
finding  by the FCC  that  the  licensee:

     o    has served the public interest, convenience and necessity;

     o    has committed no serious  violations of the  Communications Act or the
          FCC rules; and

     o    has committed no other violations of the Communications Act or the FCC
          rules which would constitute a pattern of abuse.

     If the FCC cannot make such a finding, it may deny the renewal application,
and  only  then  may the  FCC  consider  competing  applications  for  the  same
frequency.  In a vast majority of cases, the FCC renews a broadcast license even
when petitions to deny have been filed against the renewal application.

     REVIEW OF OWNERSHIP  RESTRICTIONS.  The 1996 Act requires the FCC to review
all of its broadcast  ownership  rules every two years in a so-called  "biennial
review  proceeding"  and to repeal or modify any of its rules that are no longer
"necessary in the public  interest."  The 2002 biennial  review  proceeding  was
initiated by the Commission in September 2002; the FCC anticipates  that it will
issue a decision in the proceeding in the spring of 2003.  Each of the radio and
television ownership  restrictions detailed below is under consideration in this
proceeding.
<PAGE>

RADIO OWNERSHIP:  Under FCC rules, with limited exceptions,  the number of radio
stations  that may be owned by one entity in a given radio  market is  dependent
upon the number of commercial radio stations in that market:

     o    if the market has 45 or more commercial radio stations, one entity may
          own up to eight  stations,  not more  than five of which may be in the
          same service (AM or FM);

     o    if the market has between 30 and 44  commercial  radio  stations,  one
          entity may own up to seven  stations,  not more than four of which may
          be in the same service;

     o    if the  market has  between 15 and 29  commercial  radio  stations,  a
          single entity may own up to six stations,  not more than four of which
          may be in the same service; and

     o    if the market has fourteen or fewer  commercial  radio  stations,  one
          entity may own up to five  stations,  not more than three of which may
          be in the same  service,  except that one entity may not own more than
          fifty percent of the stations in the market.

     Each of the markets in which our radio stations are located has at least 15
commercial radio stations.

     The FCC has been  aggressive  in examining  issues of market  concentration
when  considering  radio station  acquisitions,  even where the numerical limits
described  above are not violated.  In some  instances,  the FCC has delayed its
approval of proposed  radio station  purchases  because of market  concentration
concerns,  and in several recent cases, the FCC has ordered evidentiary hearings
to  determine   whether  a  proposed   transaction  would  result  in  excessive
concentration.  Additionally, in December 2000, the FCC launched a proceeding to
examine possible revisions to the manner in which the agency counts stations and
defines a radio "market" for purposes of determining  compliance  with the local
radio multiple ownership  restrictions.  In November 2001, the FCC subsumed this
proceeding  into a more  comprehensive  proceeding  to review all aspects of the
agency's local radio multiple  ownership rules,  including,  among other things,
whether it may or should  modify its local  radio  multiple  ownership  rules to
address  concerns  of undue  market  concentration.  The FCC has also  requested
comment on future regulatory  treatment of radio time brokerage agreements (also
known as  "local  marketing  agreements"  or  "LMA's")  and  radio  joint  sales
agreements.   That  proceeding,   in  turn,  has  been   incorporated  into  the
Commission's currently pending biennial review proceeding.

     TELEVISION  OWNERSHIP:  Pursuant  to the 1996  Act,  the FCC  substantially
revised its local television ownership rules (including its television "duopoly"
rule and radio/television  cross-ownership  rule) in an August 1999 decision, as
modified by a January 2001  reconsideration  order. The FCC's revised television
duopoly  rule  permits  an  entity  to own two or more  television  stations  in
separate  Designated  Market Areas ("DMAs").  The rule also permits an entity to
own two or more television  stations in the same DMA if:

     o    the coverage areas of the stations do not overlap, or

     o    at  least  eight,   independently-owned   and   -operated   full-power
          non-commercial  and commercial  operating stations (known as "voices")
          will   remain  in  the  market   post-merger,   and  one  of  the  two
          commonly-owned  stations is not among the top four television stations
          in the market (based on audience share ratings).

     The Commission will consider  permanent  waivers of its television  duopoly
rule where one of the stations is:

     o    a "failed  station,"  i.e.,  off-air  for more than  four  months,  or
          involved in an involuntary bankruptcy proceeding;

     o    a "failing station," i.e., having a low audience share and financially
          struggling; or

     o    an unbuilt facility, where the permittee has made substantial progress
          towards constructing the facility.

     The  television  duopoly  rule was  appealed to the United  States Court of
Appeals for the District of Columbia  Circuit ("D.C.  Circuit").  In April 2002,
the D.C.  Circuit  issued a decision  remanding  the rule to the FCC for further
consideration.  The court found that the FCC had not justified  excluding  media
other than  television  stations  as  "voices"  to be counted  for  purposes  of
determining  compliance  with  the  rule.  The  court-ordered  remand  has  been
incorporated into the FCC's 2002 biennial review proceeding.

     Our  acquisition of the Lee Enterprises  stations  required a waiver of the
television  duopoly  rule because the signals of KHON-TV and KGMB-TV (one of the
Lee Enterprises  stations) overlap, the stations serve the same market, and both
stations  are  rated  among  the top  four  in that  market.  In  approving  the
acquisition,  the FCC granted a temporary  waiver of the rule,  ordering that an
application  for  divestiture  of either  KHON-TV  or KGMB-TV  (plus  associated
"satellite"  stations)  be filed on or before April 1, 2001;  that  deadline was
subsequently  extended at our request to April 1, 2002.  In  February  2002,  we

<PAGE>

filed a request for a further extension to April 1, 2003, which was opposed by a
Honolulu  broadcaster.  In response to our further  extension  request,  the FCC
required us to file additional  information  concerning our divestiture efforts.
Pending  its  review of the  information  we  submitted,  the FCC  granted us an
interim  extension of our waiver until July 1, 2002. To date, the Commission has
not taken any additional action with respect to our further  extension  request.
In  addition,  in May  2002,  we filed a request  for  interim  relief  with the
Commission,  asking  that the  divestiture  requirement  be stayed  pending  the
outcome  of the 2002  biennial  review.  That  request  was  apposed by the same
Honolulu  broadcaster who opposed the February extension request,  as well as by
two local public interest groups. In September 2002, we supplemented the request
for interim relief with additional information. The request remains pending, and
we cannot predict whether it will be granted.

     The FCC's revised  radio/television  cross-ownership rule generally permits
the common  ownership of the following  combinations in the same market,  to the
extent permitted under the FCC's television duopoly rule:

     o    up to two  commercial  television  stations and six  commercial  radio
          stations or one  commercial  television  station and seven  commercial
          radio stations in a market where at least 20 independent  media voices
          will remain post-merger;

     o    up to two commercial  television  stations and four  commercial  radio
          stations in a market where at least 10  independent  media voices will
          remain post-merger; and

     o    two commercial television stations and one commercial radio station in
          a market  regardless  of the number of  independent  media voices that
          will remain post-merger.

For  purposes  of  this  rule,  the  FCC  counts  as  "voices"   commercial  and
non-commercial  broadcast  television  and radio  stations as well as some daily
newspapers and cable operators.  The Commission will consider  permanent waivers
of its revised radio/television cross-ownership rule only if one of the stations
is a "failed station."

     The 1996 Act  required  the FCC to relax its  restriction  on the number of
television stations that a single entity may own nationwide.  Specifically,  the
rule was adjusted to restrict ownership to stations reaching,  in the aggregate,
no more than 35 percent of the total  national  audience.  In its 1998  biennial
review  decision,  the FCC  decided to retain the 35  percent  limit,  rejecting
requests  to further  relax the  ownership  cap. In  response,  certain TV group
owners filed  comments with the FCC and/or appeals in the D.C.  Circuit  seeking
elimination,  or at least relaxation,  of this limit. In February 2002, the D.C.
Circuit issued a decision  requiring the FCC to initiate further  proceedings to
justify its  decision to retain the 35 percent  cap. In the same  decision,  the
court also vacated the FCC's rule  prohibiting  common ownership of a television
station and a cable television system in the same market; that rule subsequently
was  repealed by the FCC. As a result of the  court's  decision,  in early April
2002,  the FCC granted  Viacom/CBS a stay of the May 2002  deadline that the FCC
had set for the network to divest certain of its television stations in order to
come into  compliance  with the 35 percent  cap;  the stay will remain in effect
until one year after the FCC completes review of the national cap as required by
the court's decision. Fox has obtained a similar stay.

     Current FCC rules also prohibit common ownership of a daily newspaper and a
radio or  television  station in the same  market.  In September  2001,  the FCC
initiated a proceeding  requesting comment on whether to eliminate,  or at least
relax, this restriction.  That proceeding  subsequently was rolled into the 2002
biennial review proceeding.

     We cannot predict the ultimate outcome of the proceedings  described above,
future  biennial  reviews  or other  agency or  legislative  initiatives  or the
impact, if any, that they will have on our business.

     ALIEN OWNERSHIP.  Under the Communications  Act, no FCC license may be held
by a corporation  if more than  one-fifth of its capital stock is owned or voted
by  aliens or their  representatives,  a foreign  government  or  representative
thereof,   or  an  entity   organized  under  the  laws  of  a  foreign  country
(collectively, "Non-U.S. Persons"). Furthermore, the Communications Act provides
that  no  FCC  license  may be  granted  to an  entity  directly  or  indirectly
controlled by another entity of which more than  one-fourth of its capital stock
is owned or voted by Non-U.S.  Persons if the FCC finds that the public interest
will be served by the denial of such license. The FCC staff has interpreted this
provision to require an affirmative  public interest finding to permit the grant
or  holding  of a  license,  and such a finding  has been  made only in  limited
circumstances.  The foregoing  restrictions on alien ownership apply in modified
form to other  types  of  business  organizations,  including  partnerships  and
limited  liability  companies.  Our Second  Amended  and  Restated  Articles  of
Incorporation  and Amended and Restated  Code of By-Laws  authorize the Board of
Directors to prohibit such  restricted  alien  ownership,  voting or transfer of
capital  stock as would  cause Emmis to violate  the  Communications  Act or FCC
regulations.

     ATTRIBUTION OF OWNERSHIP  INTERESTS.  In applying its ownership  rules, the
FCC has  developed  specific  criteria in order to  determine  whether a certain
ownership  interest  or  other  relationship  with  a  Commission   licensee  is
significant  enough  to be  "attributable"  or  "cognizable"  under  its  rules.

<PAGE>

Specifically,  among other relationships,  certain stockholders,  officers,  and
directors of a broadcasting company are deemed to have an attributable  interest
in the licenses  held by that  company,  such that there would be a violation of
the Commission's  rules where the  broadcasting  company and such a stockholder,
officer,  or director  together  hold  attributable  interests  in more than the
permitted number of stations or a prohibited  combination of outlets in the same
market.  The FCC's  regulations  generally deem the following  relationships and
interests to be attributable for purposes of its ownership restrictions:

     o    all officer and  director  positions  in a licensee or its  (in)direct
          parent(s);

     o    voting stock interests of at least five percent (or twenty percent, if
          the holder is a passive institutional investor, i.e., a mutual fund, ,
          insurance company, or bank);

     o    any equity  interest  in a limited  partnership  or limited  liability
          company where the limited  partner or member is "materially  involved"
          in the  media-related  activities  of the LP or LLC and  has not  been
          "insulated" from such activities pursuant to specific FCC criteria;

     o    equity  and/or  debt  interests  which,  in the  aggregate,  exceed 33
          percent of the total asset  value of a station or other  media  entity
          (the "equity/debt plus policy"),  if the interest holder supplies more
          than 15 percent of the  station's  total weekly  programming  (usually
          pursuant to a time brokerage,  local marketing or network  affiliation
          agreement) or is a same-market  media entity (i.e.,  broadcast company
          or newspaper).

          To assess  whether a voting  stock  interest  in a direct or  indirect
     parent corporation of a broadcast licensee is attributable,  the FCC uses a
     "multiplier" analysis in which  non-controlling  voting stock interests are
     deemed   proportionally   reduced  at  each   non-controlling   link  in  a
     multi-corporation ownership chain.

          In a January  2001 order,  the FCC  eliminated  its  "single  majority
     shareholder exemption" for purposes of the broadcast attribution rules. The
     exemption  had provided  that, in cases where one person or entity (such as
     Jeffrey H.  Smulyan in the case of Emmis)  held more than 50 percent of the
     combined  voting power of the common  stock of a  broadcasting  company,  a
     minority  shareholder of the company  generally would not be deemed to hold
     an  attributable  interest in the company.  Although the FCC eliminated the
     single majority shareholder exemption,  it grandfathered minority interests
     in  broadcasting  companies  with single  majority  shareholders  where the
     interests  were acquired  prior to December 14, 2000,  the adoption date of
     the FCC's  order.  The FCC's  decision  to  eliminate  the single  majority
     shareholder  exemption  was called into  question  by a March 2001  federal
     court decision, which reversed and remanded the FCC's decision to eliminate
     the   corresponding   exemption  for  purposes  of  the  cable   television
     attribution  rules. In light of that decision,  the Commission  initiated a
     proceeding to review the single majority shareholder  exemption in both the
     cable and  broadcast  contexts.  The FCC also  issued  an order  suspending
     enforcement of the elimination of the exemption until a decision is reached
     in its review proceeding,  which remains pending.  Accordingly,  the single
     majority shareholder exemption remains in force.

     Should the FCC ultimately  eliminate the exemption,  any minority interests
in Emmis of at least five  percent that were  acquired on or after  December 14,
2000  will not be  exempt  from  attribution,  despite  Mr.  Smulyan's  majority
interest.  Moreover,  in the event that Mr. Smulyan no longer holds more than 50
percent  of  the  voting  power,   the  interests  of   grandfathered   minority
shareholders which had theretofore been considered  nonattributable would become
attributable,  such that any other media  interests  held by these  shareholders
would be combined  with  Emmis'  media  interests  for  purposes of  determining
compliance with FCC ownership rules. Mr. Smulyan's level of voting control could
decrease  to or below 50  percent  as a result  of  transfers  of  common  stock
pursuant  to  agreement,  exercise  of  options  to  acquire  common  stock,  or
conversion of the Class B Common Stock into Class A Common  Stock.  In the event
of noncompliance  with the FCC's  attribution  rules,  steps required to achieve
compliance could include divestitures by either the shareholder or Emmis, as the
situation  dictates.  Further,  an  attributable  interest  of  any  shareholder
(including  grandfathered  minority  interests) in another  broadcast station or
other media entity in a market where Emmis owns or seeks to acquire a station is
subject  to review by the FCC under its  "equity/debt  plus  policy,"  and could
result in Emmis being unable to obtain one or more FCC authorizations  needed to
conduct  its   broadcast   business  or  FCC  consents   necessary   for  future
acquisitions. Conversely, Emmis' media interests could operate to restrict other
media investments by shareholders having or acquiring an interest in Emmis.

     ASSIGNMENTS AND TRANSFERS OF CONTROL.  The Communications Act prohibits the
assignment  of a  broadcast  license or the  transfer  of control of a broadcast
licensee without the prior approval of the FCC. In determining  whether to grant
such approval, the FCC considers a number of factors,  including compliance with
the various rules limiting common ownership of media properties, the "character"
of the licensee and those persons holding  attributable  interests therein,  and
compliance with the Communications  Act's limitations on alien ownership as well
as other statutory and regulatory requirements. When evaluating an assignment or
transfer of control application,  the FCC is prohibited from considering whether
the public interest might be served by an assignment of the broadcast license or
transfer  of control of the  licensee  to a party  other  than the  assignee  or
transferee specified in the application.
<PAGE>

     PROGRAMMING AND OPERATION.  The Communications Act requires broadcasters to
serve the "public interest." Since the late 1970s, the FCC gradually has relaxed
or eliminated many of the more formalized procedures it had developed to promote
the  broadcast  of certain  types of  programming  responsive  to the needs of a
station's  community of license.  However,  licensees continue to be required to
present  programming  that  is  responsive  to  community  problems,  needs  and
interests and to maintain  certain records  demonstrating  such  responsiveness.
Federal law  prohibits  the  broadcast  of obscene  material and  regulates  the
broadcast of indecent  material,  which is subject to enforcement  action by the
FCC. Complaints from listeners concerning a station's  programming often will be
considered by the FCC when it evaluates  the  licensee's  renewal  applications,
although such complaints may be filed by concerned parties and considered by the
FCC at any time.  Stations also must pay  regulatory  and  application  fees and
follow various rules  promulgated  under the  Communications  Act that regulate,
among other things, political advertising,  sponsorship identification,  contest
and lottery advertisements,  and technical operations, including limits on radio
frequency radiation.

     In 1992,  Congress  enacted the Cable  Television  Consumer  Protection and
Competition Act of 1992 (the "1992 Cable Act").  Certain provisions of this law,
such as signal  carriage and  retransmission  consent,  have a direct  effect on
television broadcasting.

     In April 1997, the FCC adopted rules that require  television  broadcasters
to provide digital television ("DTV") to consumers. The FCC also adopted a table
of allotments for DTV, which assigns  eligible  broadcasters a second channel on
which to provide DTV service.  The FCC's DTV allotment  plan is based on the use
of a "core" DTV spectrum between channels 2-51.  Although the Communications Act
mandates that each television  station return one of its two channels to the FCC
by the end of 2006, the Balanced Budget Act of 1997 may  effectively  extend the
transition deadline in some markets by allowing  broadcasters to keep both their
analog and digital  licenses until at least 85 percent of television  households
in their respective markets can receive a digital signal.  Local zoning laws and
the lack of qualified  tall-tower builders to construct the facilities necessary
for DTV  operations,  among other factors,  including the pace of DTV production
and sales, may cause delays in the DTV transition. The FCC has announced that it
will review the progress of DTV every two years and make adjustments to the 2006
target  date,  if  necessary.  The  FCC is  also  considering  cable  operators'
obligations  to carry the  digital  signals of  broadcast  television  stations,
including the  obligations  that should exist during the DTV transition  period,
when broadcasters' analog and digital signals will be operating simultaneously.

     Television  broadcasters are allowed to use their DTV channels according to
their best business judgment,  provided that they continue to offer at least one
free programming  service that is at least comparable to today's analog service.
Digital  services  and  programming  can include  multiple  standard  definition
program channels, data transfer,  subscription video, interactive materials, and
audio signals  (so-called  "ancillary"  services).  The FCC has imposed a fee of
five percent of the annual gross  revenues for television  broadcasters'  use of
the DTV spectrum to offer ancillary services.  The form and amount of these fees
may  have  a  significant   effect  on  the   profitability  of  such  services.
Broadcasters  will  not  be  required  to  air  "high  definition"  programming.
Beginning April 1, 2003, broadcasters operating in digital mode were required to
simulcast  at least  50  percent  of their  analog  programming  on the  digital
channel.  Affiliates of ABC,  CBS, NBC and Fox in the top 10 television  markets
were  required  to be on the air  with a  digital  signal  by May 1,  1999,  and
affiliates of those networks in markets 11-30,  including KOIN-TV, were required
to be on the air with a digital  signal by  November 1, 1999;  KOIN-TV  complied
with this  deadline.  The  remaining  commercial  stations,  including all other
television  stations  owned by Emmis,  were  required  to file DTV  construction
permit applications by November 1, 1999, and were required to be on the air with
a digital  signal by May 1, 2002,  absent an extension  on a  station-by-station
basis.  All Emmis'  stations  met the  November  1, 1999  application  deadline.
Stations WALA, WKCF, and WFTX met the May 1, 2002 on-air deadline, and all other
stations  subsequently  initiated DTV service prior to their extended deadlines,
except WVUE(TV),  KGUN(TV),  KSNK(TV), and the Hawaii stations. KSNK(TV) and the
Hawaii stations have obtained  further  extensions,  and extension  requests are
pending for WVUE(TV) and KGUN(TV). Additionally, all of the Emmis stations filed
timely applications to "maximize" (expand the coverage of) the DTV facilities to
ensure the DTV  coverage is equal to or better  than the  coverage of our analog
channels.

     WBPG is not subject to the usual DTV deadlines  because it was not issued a
second  channel for DTV operation;  rather,  WBPG will be required to convert to
DTV operation by the conclusion of the DTV  transition  period.  Further,  since
Channel 55, on which WBPG  operates,  is to be  reallocated by the FCC for other
use at the end of the DTV transition  period, the FCC will assign the station to
a different channel at that time unless it has already changed its channel.

     In January 2001, the FCC issued a further order on DTV  transition  issues,
setting a number of deadlines for  commercial  broadcasters.  The order required
commercial  stations with both analog and digital channel assignments within the
DTV core  spectrum  (channels  2-51) to  elect by the end of  December  2003 the
channel  they  will use for  broadcasting  after  the  transition  is  complete.
Similarly,  the FCC  decided in the order  that,  by the end of  December  2004,
commercial broadcasters not replicating their existing analog service areas will
lose  interference  protection in those portions of their existing service areas

<PAGE>

not covered by their digital signals. The order further held that, by the end of
December 2004, commercial broadcasters must provide a stronger digital signal to
their communities of license than was previously required.

     In November 2001, the FCC issued a reconsideration  order on DTV transition
issues,   which  modified  many  of  the  rules  established  in  January  2001.
Specifically,  the reconsideration order temporarily defers the FCC's previously
established   deadlines  for   broadcasters   to:  (1)  choose  their  permanent
post-transition  DTV  channel;  (2) provide a DTV signal that  replicates  their
analog  service area;  and (3) build  maximized DTV  facilities.  The order also
permits broadcasters to request special temporary authority to construct initial
minimal  DTV  facilities  (i.e.,  facilities  that only  cover  their  cities of
license)  while  retaining  interference   protection  for  their  allotted  and
maximized facilities.  In addition, the order allows commercial stations subject
to the May 1,  2002  construction  deadline  (i.e.,  stations  not in the top 30
markets) to initially broadcast a digital signal during prime time hours only.

     In April 2002 the FCC Chairman challenged the broadcast,  cable, satellite,
and consumer  electronics  industries to take certain voluntary actions designed
to speed the DTV  transition.  Although  members of the  broadcast,  cable,  and
satellite  industries  were quick to make  commitments  to comply with  Chairman
Powell's proposals,  the consumer  electronics industry was reluctant to embrace
the plan. Consequently,  the Commission found it necessary to formally mandate a
phased-in DTV tuner requirement.  As a result, all new television sets 13 inches
and larger and all TV interface devices (VCRs, etc.) must include the capability
of tuning and decoding over-the-air digital signals by 2007.

     In January  2003,  the FCC launched its second  periodic  review of its DTV
rules and proposed new  deadlines  for stations to choose their  post-transition
digital  channels,  to replicate  their analog  service areas and maximize their
digital  facilities  in order to maintain  protection of their  allotted  and/or
expanded  service areas.  The  Commission  proposed July 1, 2005 as the date for
affiliates  of ABC,  NBC,  CBS and Fox in the top 100 markets to build out their
full facilities or lose  protection for the "unused" areas.  This deadline would
apply to all the Emmis television stations except WTHI, KSNT and WKCF. All other
stations,  including WTHI,  KSNT and WKCF,  would be required to build out their
full  facilities  by July 1,  2006  under  the  Commission's  proposal.  The FCC
proposed May 1, 2005 as the deadline for choosing a permanent  DTV channel.  The
FCC also will decide in the  proceeding  how to evaluate when the  transition to
digital television has been achieved and, accordingly, when broadcasters will be
required to operate exclusively in digital mode and turn in the channel not used
for digital  broadcasting.  Under  current law, that date is set at December 31,
2006  or the  date  by  which  85  percent  of the  television  households  in a
licensee's market are capable of receiving the signals of DTV stations.

     Another area of concern for the DTV  transition is the technical  standards
needed to ensure that digital  television sets can connect to cable systems.  At
the request of the FCC, the cable and consumer  electronics  industries  entered
into a Memorandum of Understanding ("MOU") setting forth an agreement on a cable
compatibility  standard.  The  Commission  put the MOU out for public comment in
January of 2003.

     The FCC has authorized the provision of video programming  directly to home
subscribers  through  high-powered  direct  broadcast  satellites  ("DBS").  DBS
systems  currently  are  capable of  broadcasting  over 500  channels of digital
television  service  directly to subscribers'  equipment with 18-inch  receiving
dishes and  decoders.  At this time,  several  entities  provide  DBS service to
consumers  throughout  the  country.  In  order  to  protect  network-affiliated
broadcast  stations  from the  effects of  satellite  importation  of  non-local
network  signals into their  markets,  DBS  operators  are  permitted to deliver
distant network signals only to unserved  households in so-called  "white areas"
(i.e.,  locations  too  distant  from a local  network  affiliate  to  receive a
sufficiently  strong  "over-the-air"  signal).  In addition,  in November  1999,
Congress  enacted the Satellite Home Viewer  Improvement  Act  ("SHVIA"),  which
authorizes  DBS  companies  to  provide  local   television   signals  to  their
subscribers pursuant to a retransmission  consent agreement with the station. In
March 2000, the FCC adopted regulations governing the statutory requirements for
"good faith" negotiations and non-exclusive agreements in retransmission consent
contracts   between   broadcasters   (and   all   multichannel   video   program
distributors).    Broadcasters   are   required   to   negotiate   non-exclusive
retransmission  consent agreements in good faith until January 1, 2006; however,
the law explicitly  provides that  broadcasters  may enter into  agreements with
competing DBS carriers on different terms.

     Moreover,  effective  January 1, 2002,  local  television  stations  became
entitled to  "must-carry"  rights on a DBS system if the system is providing any
local television  station(s) to its subscribers.  In such markets,  stations now
can choose  whether to demand  carriage on a DBS system by  electing  must-carry
status or to negotiate  with the DBS operator  for  specific  carriage  terms by
electing  retransmission consent status. SHVIA also "grandfathered"  delivery of
the signals of television  stations via DBS to certain  subscribers who may have
been receiving such signals in violation of prior law. In November 2000, the FCC
adopted  rules  to  implement  SHVIA  provisions  regarding   "local-into-local"
satellite  service,  must-carry  election  cycle rules and related  policies for
satellite  carriage of broadcast  signals.  Under the new FCC rules, a broadcast
television station must  affirmatively  elect must-carry status to require a DBS

<PAGE>

operator to carry its station;  the first elections were due by July 1, 2001. In
response  to a challenge  to certain  provisions  of SHVIA,  a panel of the U.S.
Court  of  Appeals  for the  Fourth  Circuit  upheld  the  requirement  that DBS
operators  carry the signal of all local  television  stations in markets  where
they elect to carry any local  signals.  The court also  upheld an FCC rule that
permits DBS operators to offer all local television stations on a single tier or
on an a la carte  basis.  The rule allows  consumers  to choose  between the two
options.  In response to broadcasters'  first elections,  DBS operators issued a
large number of carriage denial letters,  prompting the FCC to issue an order in
September 2001 clarifying the DBS mandatory  carriage rules. In particular,  the
FCC  emphasized  that a satellite  carrier  must have a  "reasonable  basis" for
rejecting a broadcast station's carriage request.

     There are FCC rules and  policies,  and rules and policies of other federal
agencies,  that regulate matters such as the use of auctions to resolve mutually
exclusive  application  requests,  network-affiliate  relations,  the ability of
stations  to  obtain  exclusive  rights  to air  syndicated  programming,  cable
systems'  carriage of syndicated and network  programming  on distant  stations,
political  advertising   practices,   application  procedures  and  other  areas
affecting the business or operations of broadcast stations.

     Failure to observe FCC rules and policies can result in the  imposition  of
various sanctions, including monetary fines, the grant of "short" (less than the
maximum term) license renewals or, for particularly  egregious  violations,  the
denial of a license renewal application or the revocation of a license.

     ADDITIONAL  DEVELOPMENTS AND PROPOSED  CHANGES.  The Commission has adopted
rules  implementing  a new low  power FM  ("LPFM")  service.  The FCC has  begun
accepting  applications  for  LPFM  stations  and  has  granted  some  of  those
applications.  We cannot  predict  whether any LPFM stations will interfere with
the coverage of our radio stations.

     The FCC has also  authorized two companies to launch and operate  satellite
digital audio radio service ("SDARS") systems. Both companies--Sirius  Satellite
Radio, Inc. and XM Radio--are now providing nationwide service.  Currently,  the
FCC is considering a proposal to permit SDARS to be  supplemented by terrestrial
"repeating"  transmitters  designed to fill  "gaps" in  satellite  coverage.  We
cannot predict the impact of SDARS on our radio stations' listenership.

     In October 2002, the FCC issued an order selecting a technical standard for
terrestrial digital audio broadcasting ("DAB"). The in-band, on-channel ("IBOC")
technology chosen by the agency allows AM and FM radio broadcasters to introduce
digital  operations  and permits  existing  stations to operate on their current
frequencies  in either full analog mode,  full digital mode, or a combination of
both (at reduced power).

     In January 2001, the D.C. Circuit concluded that the FCC's Equal Employment
Opportunity ("EEO") regulations were  unconstitutional.  The FCC adopted new EEO
rules in November 2002, which went into effect in March 2003.

     Congress  and the  FCC  have  under  consideration,  and may in the  future
consider and adopt, new laws,  regulations and policies regarding a wide variety
of matters that could, directly or indirectly,  affect the operation,  ownership
and  profitability  of our  broadcast  stations,  result in the loss of audience
share and  advertising  revenues for our  broadcast  stations  and/or affect our
ability to acquire  additional  broadcast stations or finance such acquisitions.
Such matters include, but are not limited to:

     o    proposals to impose spectrum use or other fees on FCC licensees;


     o    proposals  to  repeal  or  modify  some or all of the  FCC's  multiple
          ownership rules and/or policies;

     o    proposals to change rules relating to political broadcasting;

     o    technical and frequency allocation matters;

     o    AM stereo broadcasting;

     o    proposals to permit expanded use of FM translator stations;

     o    proposals to restrict or prohibit the  advertising  of beer,  wine and
          other alcoholic beverages;

     o    proposals to tighten  safety  guidelines  relating to radio  frequency
          radiation exposure;

     o    proposals  permitting  FM  stations to accept  formerly  impermissible
          interference;

     o    proposals to reinstate holding periods for licenses;

     o    changes to broadcast technical requirements,  including those relative
          to the implementation of SDARS and DAB;

     o    proposals to limit the tax  deductibility  of advertising  expenses by
          advertisers.

     We cannot predict whether any proposed changes will be adopted,  what other
matters  might  be  considered  in the  future,  or what  impact,  if  any,  the
implementation of any of these proposals or changes might have on our business.
<PAGE>

     The  foregoing  is  only a  brief  summary  of  certain  provisions  of the
Communications Act and of specific FCC regulations.  Reference should be made to
the  Communications  Act as well as FCC regulations,  public notices and rulings
for further  information  concerning the nature and extent of federal regulation
of broadcast stations.


GEOGRAPHIC FINANCIAL INFORMATION

     The  Company's  segments  operate  primarily in the United  States with one
national  radio  station  located in Hungary and two radio  stations  located in
Argentina.  The following tables  summarize  relevant  financial  information by
geographic area:

                                  For the year ended February 28,
Net Revenues:                2001               2002              2003
                            ----                ----              ----
                                          (In Thousands)
    Domestic            $ 458,767            $ 523,124         $ 550,553
    International          14,578               16,698            11,810
                           ------               ------            ------
    Total               $ 473,345            $ 539,822         $ 562,363
                        =========            =========         =========


                                        As of February 28,
Noncurrent Assets:            2001              2002             2003
                              ----              ----             ----
                                          (In Thousands)
    Domestic            $ 2,263,796          $ 2,229,680      $ 1,942,069
    International            27,970               16,867           14,663
                             ------               ------           ------
    Total               $ 2,291,766          $ 2,246,547      $ 1,956,732
                        ===========          ===========      ===========


     With  respect to EOC,  the above  information  would be  identical,  except
domestic  noncurrent  assets  would  be  $2,218,750  and  $1,934,540  and  total
noncurrent assets would be $2,235,617 and $1,949,203 as of February 28, 2002 and
2003, respectively.

ITEM 2.  PROPERTIES.

     The  following  table sets forth  information  as of February 28, 2003 with
respect to offices,  studios and  broadcast  towers of  stations  and  magazines
currently  owned by Emmis.  Management  believes that the properties are in good
condition and are suitable for Emmis' operations.



<PAGE>
<TABLE>
<CAPTION>


                                                                                                   EXPIRATION
                                                       YEAR PLACED         OWNED OR                    DATE
              PROPERTY                                 IN SERVICE           LEASED                   OF LEASE
              --------                                 ----------           ------                   --------
<S>                                                       <C>               <C>                  <C>
Corporate and Publishing Headquarters/                    1998               Owned                      --
WENS-FM/ WIBC-AM/WNOU-FM/
WYXB-FM/ Indianapolis Monthly
One Emmis Plaza
40 Monument Circle
Indianapolis, Indiana
WENS-FM Tower                                             1985               Owned                      --
WNOU-FM Tower                                             1979               Owned                      --
WIBC-AM Tower                                             1966               Owned                      --
WYXB-FM Tower                                             2003               Owned                      --

WMLL-FM/KFTK-FM/KIHT-FM/KPNT-FM/KSHE-FM                   1998              Leased                December 2007
800 St.  Louis Union Station
St.  Louis, Missouri
WMLL-FM Tower                                             1984               Owned                      --
KFTX-FM Tower                                             1987              Leased    August 2009 with option to March 2023
KIHT-FM Tower                                             1995              Leased    September 2005 with two 5-year options
KPNT-FM Tower                                             1987               Owned                      --
KSHE-FM Tower                                             1985              Leased                  April 2009

KPWR-FM                                                   1988              Leased                 October 2017
KZLA-FM                                                   2002              Leased                 October 2017
2600 West Olive
Burbank, California
KPWR-FM Tower                                             1993              Leased                Month-to-Month
KZLA-FM tower                                             1991              Leased                December 2004
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                                                                    EXPIRATION
                                                       YEAR PLACED         OWNED OR                    DATE
              PROPERTY                                 IN SERVICE           LEASED                   OF LEASE
              --------                                 ----------           ------                   --------
<S>                                                       <C>               <C>                  <C>
WQHT-FM/WRKS-FM/WQCD-FM                                   1996              Leased                 January 2013
395 Hudson Street, 7th Floor
New York, New York
WQHT-FM Tower                                             1984              Leased                 January 2010
WRKS-FM Tower                                             1984              Leased                November 2005
WQCD-FM Tower                                             1984              Leased                February 2007

WKQX-FM                                                   2000              Leased       December 2015 with 5 year option
230 Merchandise Mart Plaza
Chicago, Illinois
WKQX-FM Tower                                             1975              Leased                September 2009

Atlanta Magazine Office                                   1997              Leased                 July 20031
1330 Peachtree Street, N.E.
Atlanta, Georgia

Cincinnati Magazine                                       1996              Leased                November 2006
One Centennial Plaza
Cincinnati, OH

Texas Monthly                                             1989              Leased                 August 2009
701 Brazos, Suite 1600
Austin, TX

KHON-TV                                                   1999               Owned                      --
88 Piikoi Street
Honolulu, HI
KHON-TV Tower                                             1978              Leased      December 2008 with 10 year option

WALA-TV                                                   2002               Owned                      --
WBPG-TV                                                   2003               Owned                      --
1501 Satchel Paige Dr.
Mobile, AL
WALA-TV Tower                                             1962               Owned                      --
WBPG-TV Tower                                             2001              Leased                  July 2010

WFTX-TV                                                   1987               Owned                      --
621 Pine Island Road
Cape Coral, FL
WFTX-TV Tower                                             1985               Owned                      --

WLUK-TV                                                   1966               Owned                      --
787 Lombardi Avenue
Green Bay, WI
WLUK-TV Tower                                             1961               Owned                      --

WTHI-TV/FM/WWVR-FM                                        1954               Owned                      --
918 Ohio Street
Terre Haute, IN
WTHI-TV Tower                                             1965               Owned                      --
WTHI-FM Tower                                             1954               Owned                      --
WWVR-FM Tower                                             1966               Owned                      --

WVUE-TV                                                   1972               Owned                      --
1025 South Jefferson Davis Highway
New Orleans, LA
WVUE-TV Tower                                             1963               Owned                      --

WKCF-TV                                                   1998               Owned                      --
31 Skyline Drive
Lake Mary, FL
WKCF-TV Tower                                             2001              Leased                  April 2016

Los Angeles Magazine                                      2000              Leased                November 2010
5900 Wilshire Blvd., Suite 1000
Los Angeles, CA 90036

Country Sampler                                           1988               Owned                      --
707 Kautz Road
St. Charles, IL  60174
</TABLE>
1New location and 10 year lease beginning August 1, 2003.

<PAGE>
<TABLE>
<CAPTION>


                                                                                                    EXPIRATION
                                                       YEAR PLACED         OWNED OR                    DATE
              PROPERTY                                 IN SERVICE           LEASED                   OF LEASE
              --------                                 ----------           ------                   --------
<S>                                                       <C>               <C>                  <C>
RDS/Co-Opportunities                                      1989              Leased                December 2003
324 Campus Lane, Suite B
Suisun, CA  94585

Emmis West (Corporate)                                    1999              Leased                 January 2004
15821 Ventura Blvd., #685
Encino, CA  91436

Slager Radio                                              1998              Leased                December 2004
Szabadsag Ut 117 (Atronyx Bldg. B)
H-2040 Budaors, Hungary
Slager Tower                                              1998              Leased                November 2004

KOIN-TV                                                   1984              Leased        June 2083 with 99 year option
222 S.W. Columbia St.
Portland, OR 97221
KOIN-TV Tower                                             1953               Owned                      --

KSNT-TV                                                   1967               Owned                      --
6835 N.W. U.S. Hwy 24
Topeka, KS 66618
KSNT-TV Tower                                             1967               Owned                      --

WSAZ-TV                                                   1971               Owned                      --
645 5th Avenue
Huntington, WV 25701
WSAZ-TV Tower                                             1954               Owned                      --

KGMB-TV                                                   1952               Owned                      --
1534 Kapiolani Blvd.
Honolulu, HI 96814
KGMB-TV Tower                                             1962               Owned                      --

KMTV-TV                                                   1978               Owned                      --
10714 Mockingbird Dr.
Omaha, NE 68127
KMTV-TV Tower                                             1967               Owned                      --

KGUN-TV                                                   1990               Owned                      --
7280 E. Rosewood
Tucson, AZ 85710
KGUN-TV Tower                                             1956              Leased                  July 2016

KRQE-TV                                                   1953               Owned                      --
13 Broadcast Plaza S.W.
Albuquerque, NM 87104
KRQE-TV Tower                                             1959               Owned                      --

KTAR-AM/KMVP-AM/KKLT-FM/KKFR-FM                           1994               Owned                      --
5300 N. Central Ave.
Phoenix, AZ 85012
KTAR-AM Tower                                             1958               Owned                      --
KMVP-AM Tower                                             1996              Leased                December 2008
KKLT-FM Tower                                             1990               Owned                      --
KKFR-FM Tower                                             1998              Leased                 April 20032

KSNW-TV                                                   1955               Owned                      --
833 N. Main St.
Wichita, KS 67203
KSNW-TV Tower                                             1955               Owned                      --

Argentina                                                 1996               Owned                      --
Uriarte 1899 (1414) Capital Federal
Buenos Aires, Argentina
Argentina Tower - AM                                      1996               Owned                      --
Argentina Tower - FM                                      1996               Owned                      --
</TABLE>


2 Verbal agreement to lease on month-to-month basis through end of calendar year
2003



<PAGE>


ITEM 3. LEGAL PROCEEDINGS.

     The Company is a party to various legal proceedings arising in the ordinary
course of business. In the opinion of management of the Company,  however, there
are no legal  proceedings  pending against the Company likely to have a material
adverse effect on the Company.

     In  December   2002,   Emmis  reached  an  agreement   with  the  Hungarian
broadcasting  authority,  the National Radio and Television  Board (ORTT),  that
resolved pending legal issues and extended the national license for Slager,  its
subsidiary in Hungary, through 2009. Slager agreed to pay the fees due under the
original broadcast contract in installments  through November 2004, the date the
contract was set to expire.  The license has been  extended an  additional  five
years with payment terms more  reflective of the current  Hungarian  advertising
environment


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     Not applicable.


                                     PART II


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.

     Emmis' Class A common stock is traded in the over-the-counter market and is
quoted on the National  Association of Securities  Dealers  Automated  Quotation
(NASDAQ)  National Market System under the symbol EMMS.  There is no established
public trading market for Emmis' Class B common stock or Class C common stock or
for the common stock of EOC.

     The following  table sets forth the high and low sale prices of the Class A
common stock for the periods  indicated.  No dividends were paid during any such
periods.

QUARTER ENDED                          HIGH              LOW
-------------                          ----              ---
May 2001                              $33.95            $20.06
August 2001                           33.65             23.32
November 2001                         24.95             12.27
February 2002                         27.37             15.85

May 2002                              31.85             26.15
August 2002                           30.15             11.65
November 2002                         24.05             14.25
February 2003                         24.86             17.82


     At April 25,  2003 there were  4,222  record  holders of the Class A common
stock,  and there was one record holder of the Class B common stock. As of April
25, 2003, there was one record holder of the EOC common stock.

     Emmis  intends to retain  future  earnings for use in its business and does
not  anticipate  paying  any  dividends  on  shares of its  common  stock in the
foreseeable future.

                      Equity Compensation Plan Information

     The following  table gives  information  about our common stock that may be
issued  upon the  exercise  of  options,  warrants  and rights  under all of our
existing equity  compensation plans as of February 28, 2003. These plans include
the 1994 Equity Incentive Plan, the 1995 Equity Incentive Plan, the Non-Employee
Director  Stock Option Plan,  the 1997 Equity  Incentive  Plan,  the 1999 Equity
Incentive  Plan, the 2001 Equity  Incentive  Plan, the 2002 Equity  Compensation
Plan and the Employee Stock Purchase Plan. Our shareholders have approved all of
these plans.

<PAGE>
<TABLE>
<CAPTION>

                                                                                                    Number of Securities
                                       Number of Securities to       Weighted-Average          Remaining Available for Future
                                       be Issued Upon Exercise       Exercise Price of              Issuance under Equity
                                       of Outstanding Options,      Outstanding Options,        Compensation Plans (Excluding
                                         Warrants and Rights        Warrants and Rights      Securities Reflected in Column (a))
Plan Category                                       (a)                      (b)                               (c)
                                      -------------------------    ---------------------    --------------------------------------
<S>                                         <C>       <C>               <C>     <C>                       <C>       <C>
Equity Compensation Plans
    Approved by Security  Holders           5,933,692 (1)               $ 26.53 (1)                       4,933,846 (2)
Equity Compensation Plans
    Not Approved by Security  Holders                 --                        --                                  --
Total                                       5,933,692 (1)               $ 26.53 (1)                       4,933,846 (2)
</TABLE>

                                -----------------

(1)  Includes  674,213  shares  estimated to be issuable in 2004 to employees in
     lieu of  current  salary  pursuant  to  contract  rights  under  our  stock
     compensation program. See Note 1h to our Consolidated Financial Statements.
     The exact  number  and price of shares  to be issued  depends  upon  actual
     compensation  during the period  prior to issuance and changes in our share
     price and cannot be determined at this time. Thus, the weighted averages in
     Column B do not  reflect  these  shares.  The  amount in Column A  excludes
     obligations under employment contracts to issue bonus shares in the future.

(2)  Includes 338,846 shares currently available under the initial authorization
     for the Employee Stock  Purchase  Plan.  The number of shares  reserved for
     issuance  under this plan is  automatically  increased  on the first day of
     each fiscal year by the lesser of 0.5% of the common shares  outstanding on
     the last day of the  immediately  preceding  fiscal year or a lesser amount
     determined  by our  board of  directors.  On March 4,  2003,  options  were
     granted to employees for an additional 1,095,310 shares.


ITEM 6.  SELECTED FINANCIAL DATA

          Emmis Communications Corporation
          FINANCIAL HIGHLIGHTS

                                        <TABLE>
<CAPTION>
                                                                          YEAR ENDED FEBRUARY 28 (29),
                                                                          ----------------------------
                                                                     (Dollars in thousands, except share data)
                                                          1999          2000          2001           2002          2003
                                                          ----          ----          ----           ----          ----
OPERATING DATA:
<S>                                                      <C>           <C>            <C>           <C>           <C>
   Net revenues                                          $232,836      $325,265       $473,345      $539,822      $562,363
   Station operating expenses, excluding
       noncash compensation                               143,348       199,818        299,132       354,157       349,251
   Corporate expenses, excluding
       noncash compensation                                11,904        15,430         17,601        20,283        21,359
   Time brokerage fees                                      2,220             -          7,344           479             -
   Depreciation and amortization (1)                       28,314        44,161         74,018       100,258        43,370
   Non-cash compensation                                    4,269         7,357          5,400         9,095        22,528
   Restructuring fees                                           -             -          2,057           768             -
   Impairment loss and other (2)                                -           896          2,000        10,672             -
   Operating income                                        42,781        57,603         65,793        44,110       125,855
   Interest expense                                        35,650        51,986         72,444       129,100       103,835
   Other income (loss), net (3)                             1,914         3,247         38,037        (3,657)        5,294

   Income (loss) before income taxes, extraordinary item
       and cumulative effect of accounting change           9,045         8,864         31,386       (88,647)       27,314
   Income (loss) before extraordinary item
       and cumulative effect of accounting change           2,845         1,989         13,736       (63,024)       14,049
   Net income (loss) (4)                                    1,248           (33)        13,736       (64,108)     (164,468)
   Net income (loss) available to
       common shareholders                                  1,248        (3,177)         4,752       (73,092)     (173,452)

   Net income (loss) per share available
       to common shareholders:
       Basic:
       Before accounting change and extraordinary loss   $   0.10      $  (0.03)      $   0.10      $  (1.52)     $   0.10
       Extraordinary loss, net of tax                       (0.06)        (0.06)             -         (0.02)        (0.21)
       Cumulative effect of accounting change, net of tax       -             -              -             -         (3.16)
                                                           ------       -------         ------       -------        ------
       Net income (loss) available to common
         shareholders                                    $   0.04      $  (0.09)      $   0.10      $  (1.54)     $  (3.27)
                                                           ======       =======         ======       =======       =======

       Diluted:
       Before accounting change and extraordinary loss   $   0.10      $  (0.03)      $   0.10      $  (1.52)     $   0.10
       Extraordinary loss, net of tax                       (0.06)        (0.06)             -         (0.02)        (0.21)
       Cumulative effect of accounting change, net of tax       -             -              -             -         (3.16)
                                                            -----         -----                        -----         -----
       Net income (loss) available to common
         shareholders                                    $   0.04      $  (0.09)      $   0.10      $  (1.54)     $  (3.27)
                                                           ======       =======         ======       =======       =======

   Weighted average common shares outstanding (5):
       Basic                                               28,906        36,156         46,869        47,334        53,014
       Diluted                                             29,696        36,156         47,940        47,334        53,014
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
                                                                               FEBRUARY 28 (29),
                                                     --------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                        1999           2000          2001          2002           2003
                                                        ----           ----          ----          ----           ----
BALANCE SHEET DATA:
<S>                                                    <C>           <C>           <C>            <C>           <C>
      Cash                                               $ 6,117      $ 17,370      $ 59,899        $ 6,362      $ 16,079
      Working capital (6)                                  1,249        28,274        97,885         19,828        28,024
      Net intangible assets                              802,307     1,033,970     1,852,259      1,953,331     1,676,733
      Total assets                                     1,014,831     1,327,306     2,506,872      2,510,069     2,116,413
      Long-term credit facility, senior subordinated
          debt and senior discount notes (7)             577,000       300,000     1,380,000      1,343,507     1,194,789
      Shareholders' equity                               235,549       776,367       807,471        735,557       704,705
</TABLE>

<TABLE>
<CAPTION>

                                                                           YEAR ENDED FEBRUARY 28 (29),
                                                        ---------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                        1999           2000          2001          2002           2003
                                                        ----           ----          ----          ----           ----
OTHER DATA:
      Cash flows from (used in):
<S>                                                    <C>           <C>           <C>            <C>           <C>
          Operating activities                          $ 35,121      $ 26,360      $ 97,730       $ 69,377      $ 95,149
          Investing activities                          (541,470)     (271,946)   (1,110,755)      (175,105)      106,301
          Financing activities                           506,681       256,839     1,055,554         52,191      (191,733)
      Capital expenditures                                37,383        29,316        26,225         30,135        30,549
      Cash paid for taxes                                  1,580         9,589           550          1,281           887
</TABLE>


(1)  We ceased  amortization  of our goodwill and FCC licenses in fiscal 2003 in
     connection  with  our  adoption  of  SFAS  No.  142,  "Goodwill  and  Other
     Intangible  Assets." Included in depreciation and amortization  expense for
     fiscal 1999, 2000, 2001 and 2002 is amortization  expense of $16.9 million,
     $28.4 million,  $39.5 million and $58.2 million,  respectively,  related to
     amortization of our goodwill and FCC licenses.

(2)  Year ended  February  28, 2002  includes a $9.1  million  asset  impairment
     charge  and a $1.6  million  charge  related  to the early  termination  of
     certain TV contracts.

(3)  See Management's Discussion and Analysis of Financial Condition and Results
     of Operation  for a  description  of the  components of other income in the
     year ended February 28, 2001.

(4)  Year ended  February 28, 2003 includes a charge of $167.4  million,  net of
     tax, to reflect the cumulative effect of an accounting change in connection
     with our adoption of SFAS No. 142, "Goodwill and Other Intangible Assets."

(5)  In February 2000,  Emmis effected a 2 for 1 stock split of the  outstanding
     shares of common stock. Accordingly,  all data shown has been retroactively
     adjusted to reflect the stock split.

(6)  February  28,  2002  excludes  assets  held for sale of $123.4  million and
     credit  facility debt to be repaid with proceeds of assets held for sale of
     $135.0 million.

(7)  February 28, 2002 balance  excludes  $135.0 million of credit facility debt
     to be repaid with proceeds of assets held for sale.



<PAGE>


Emmis Operating Company
FINANCIAL HIGHLIGHTS

                                       <TABLE>
<CAPTION>
                                                                            YEAR ENDED FEBRUARY 28 (29),
                                                                            ----------------------------
                                                                       (Dollars in thousands, except share data)
                                                              1999           2000          2001          2002          2003
                                                              ----           ----          ----          ----          ----
OPERATING DATA:
<S>                                                          <C>           <C>           <C>           <C>           <C>
       Net revenues                                          $ 232,836     $ 325,265     $ 473,345     $ 539,822     $ 562,363
       Station operating expenses,
            excluding noncash compensation                     143,348       199,818       299,132       354,157       349,251
       Corporate expenses,
            excluding noncash compensation                      11,904        15,430        17,601        20,283        21,359
       Time brokerage fees                                       2,220             -         7,344           479             -
       Depreciation and amortization (1)                        28,314        44,161        74,018       100,258        43,370
       Non-cash compensation                                     4,269         7,357         5,400         9,095        22,528
       Restructuring fees                                            -             -         2,057           768             -
       Impairment loss and other (2)                                 -           896         2,000        10,672             -
       Operating income                                         42,781        57,603        65,793        44,110       125,855
       Interest expense                                         35,650        51,986        72,444       104,102        78,058
       Other income (loss), net (3)                              1,914         3,247        38,037        (4,643)        5,293

       Income (loss) before income taxes, extraordinary items
            and cumulative effect of accounting change           9,045         8,864        31,386       (64,635)       53,090
       Income (loss) before extraordinary item
            and cumulative effect of accounting change           2,845         1,989        13,736       (46,802)       30,724
       Net income (loss) (4)                                     1,248           (33)       13,736       (47,886)     (139,565)

                                                                                   FEBRUARY 28 (29),
                                                                                   -----------------
                                                                                 (Dollars in thousands)
                                                              1999           2000          2001          2002          2003
                                                              ----           ----          ----          ----          ----
BALANCE SHEET DATA:
       Cash                                                    $ 6,117      $ 17,370      $ 59,899       $ 6,362      $ 16,079
       Working capital (5)                                       1,249        28,274        97,885        20,951        29,147
       Net intangible assets                                   802,307     1,033,970     1,852,259     1,953,331     1,676,733
       Total assets                                          1,014,831     1,327,306     2,506,872     2,499,139     2,108,884
       Long-term credit facility and
             senior subordinated debt (6)                      577,000       300,000     1,380,000     1,117,000       996,945
       Shareholder's equity                                    235,549       776,367       807,471       944,467       878,418

                                                                              YEAR ENDED FEBRUARY 28 (29),
                                                                              ----------------------------
                                                                                 (Dollars in thousands)
                                                              1999           2000          2001          2002          2003
                                                              ----           ----          ----          ----          ----
OTHER DATA:
       Cash flows from (used in):
            Operating activities                              $ 35,121      $ 23,471      $ 86,871      $ 67,393      $ 94,189
            Investing activities                              (541,470)     (271,946)   (1,110,755)     (175,105)      106,301
            Financing activities                               506,681       259,728     1,066,413        54,175      (190,773)
       Capital expenditures                                     37,383        29,316        26,225        30,135        30,549
       Cash paid for taxes                                       1,580         9,589           550         1,281           887

</TABLE>



(1)  We ceased  amortization  of our goodwill and FCC licenses in fiscal 2003 in
     connection  with  our  adoption  of  SFAS  No.  142,  "Goodwill  and  Other
     Intangible  Assets." Included in depreciation and amortization  expense for
     fiscal 1999, 2000, 2001 and 2002 is amortization  expense of $16.9 million,
     $28.4 million,  $39.5 million and $58.2 million,  respectively,  related to
     amortization of our goodwill and FCC licenses.

(2)  Year ended  February  28, 2002  includes a $9.1  million  asset  impairment
     charge  and a $1.6  million  charge  related  to the early  termination  of
     certain TV contracts.

(3)  See Management's Discussion and Analysis of Financial Condition and Results
     of Operation  for a  description  of the  components of other income in the
     year ended February 28, 2001.

(4)  Year ended  February 28, 2003 includes a charge of $167.4  million,  net of
     tax, to reflect the cumulative effect of an accounting change in connection
     with our adoption of SFAS No. 142, "Goodwill and Other Intangible Assets."

(5)  February  28,  2002  excludes  assets  held for sale of $123.4  million and
     credit  facility debt to be repaid with proceeds of assets held for sale of
     $135.0 million.

(6)  February 28, 2002 balance  excludes  $135.0 million of credit facility debt
     to be repaid with proceeds of assets held for sale.



<PAGE>


ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.

GENERAL

     The  following  discussion  pertains  to Emmis  Communications  Corporation
("ECC") and its  subsidiaries  (collectively,  "Emmis" or the  "Company") and to
Emmis Operating Company and its subsidiaries  (collectively "EOC"). EOC became a
wholly owned  subsidiary of ECC in connection with the Company's  reorganization
(see Note 1c. to our consolidated financial statements) on June 22, 2001. Unless
otherwise  noted, all disclosures  contained in the Management's  Discussion and
Analysis of Financial  Condition and Results of Operation in the Form 10-K apply
to Emmis and EOC.

     The Company's  revenues are affected primarily by the advertising rates its
entities charge. These rates are in large part based on the entities' ability to
attract   audiences/subscribers   in  demographic   groups   targeted  by  their
advertisers.  Broadcast entities' ratings are measured  principally four times a
year by Arbitron  Radio Market  Reports for radio  stations and by A.C.  Nielsen
Company for television  stations.  Because audience ratings in a station's local
market are critical to the station's  financial success,  the Company's strategy
is to use market  research and  advertising  and promotion to attract and retain
audiences in each station's chosen demographic target group.

     In addition to the sale of advertising  time for cash,  stations  typically
exchange advertising time for goods or services which can be used by the station
in its business operations. The Company generally confines the use of such trade
transactions  to  promotional  items or  services  for which the  Company  would
otherwise have paid cash. In addition, it is the Company's general policy not to
pre-empt  advertising  spots paid for in cash with advertising spots paid for in
trade.

CRITICAL ACCOUNTING POLICIES

     Critical   accounting   policies  are  defined  as  those  that   encompass
significant  judgments and  uncertainties,  and  potentially  derive  materially
different  results under different  assumptions and conditions.  We believe that
our critical accounting policies are those described below.

    Impairment of Goodwill and Indefinite-lived Intangibles

     The annual impairment tests for goodwill and  indefinite-lived  intangibles
under SFAS No. 142 require us to make certain  assumptions in  determining  fair
value, including assumptions about the cash flow growth rates of our businesses.
Additionally,  the fair  values are  significantly  impacted  by  macro-economic
factors,  including  market  multiples  at the time  the  impairment  tests  are
performed.  Accordingly,  we may incur additional  impairment  charges in future
periods  under SFAS No. 142 to the extent we do not  achieve our  expected  cash
flow growth rates, or to the extent that market values decrease.

    Allocations for Purchased Assets

     We typically engage an independent  appraisal firm to value assets acquired
in a material acquisition.  We use the appraisal report to allocate the purchase
price of the acquisition.  To the extent that purchased assets are not allocated
appropriately,   depreciation  and  amortization  expense  could  be  materially
different.

    Allowance for Doubtful Accounts

     Our  allowance  for  doubtful  accounts  requires  us  to  estimate  losses
resulting from our customers' inability to make payments. We specifically review
historical  write-off  activity by market,  large customer  concentrations,  and
changes in our customer  payment  patterns when  evaluating  the adequacy of the
allowance for doubtful  accounts.  If the  financial  condition of our customers
were to  deteriorate,  resulting  in an  impairment  of  their  ability  to make
payments, then additional allowances may be required.


<PAGE>



ACQUISITIONS, DISPOSITIONS AND INVESTMENTS

     Emmis has agreed to  acquire,  for a purchase  price of $105.2  million,  a
controlling interest of 50.1% in LBJS Broadcasting Company, L.P. LBJS owns radio
stations  KLBJ-AM,  KLBJ-FM,  KXMG-FM,  KROX-FM and KGSR-FM,  all in the Austin,
Texas  metropolitan  area. The remaining  49.9% interest in LBJS will be held by
Sinclair  Telecable,  Inc.  which will  contribute  to LBJS a sixth Austin radio
station,  KEYI-FM.  We expect this acquisition to close in the second quarter of
our fiscal 2004. We will finance the acquisition  through  borrowings  under the
credit  facility and the  acquisition  will be accounted  for as a purchase.  In
addition,  Emmis  will have the  option,  but not the  obligation,  to  purchase
Sinclair's  entire interest in LBJS after a period of  approximately  five years
based on an 18-multiple of trailing 12-month cash flow.

     Effective March 1, 2003,  Emmis completed its acquisition of  substantially
all of the assets of television station WBPG-TV in Mobile, AL-Pensacola, FL from
Pegasus   Communications   Corporation  for  $11.5  million.   We  financed  the
acquisition through borrowings under the credit facility and the acquisition was
accounted for as a purchase.  This  acquisition will allow us to achieve duopoly
efficiencies  in the market,  such as lower  programming  acquisition  costs and
consolidation of general and  administrative  functions,  since we already own a
television station in the market.

     During the three year period  ended  February  28,  2003,  we acquired  and
retained  six  radio  stations,  eight  television  stations  and  one  magazine
publication for an aggregate cash purchase price of $1.1 billion. A recap of the
transactions  completed is summarized  hereafter.  These transactions impact the
comparability of operating results year over year.

     Effective May 1, 2002 Emmis completed the sale of substantially  all of the
assets of KALC-FM in Denver, Colorado to Entercom Communications Corporation for
$88.0  million.  Emmis had  purchased  KALC-FM on January 17,  2001,  from Salem
Communications  Corporation  for $98.8 million in cash plus a commitment  fee of
$1.2 million and  transaction  related  costs of $0.9  million.  On February 12,
2002, Emmis entered into a definitive  agreement to sell KALC-FM to Entercom and
Entercom began operating  KALC-FM under a time brokerage  agreement on March 16,
2002. Proceeds were used to repay amounts outstanding under our credit facility.
The  assets  of  KALC-FM  are  reflected  as held for  sale in the  accompanying
consolidated  balance sheet as of February 28, 2002. Since the agreed-upon sales
price for this  station was less than its  carrying  amount as of  February  28,
2002,  we  recognized  an  impairment  loss  of $9.1  million  in  fiscal  2002.
Additionally,  in fiscal 2003 we recorded an  incremental  $1.3  million loss in
connection with the sale. Both of these losses are reflected in the accompanying
consolidated statements of operations. The $87.7 million of credit facility debt
repaid with the net proceeds of the sale is reflected as a current  liability in
the accompanying consolidated balance sheet as of February 28, 2002.

     Effective May 1, 2002 Emmis completed the sale of substantially  all of the
assets of KXPK-FM in Denver, Colorado to Entravision  Communications Corporation
for $47.5 million.  Emmis had purchased  KXPK-FM on August 24, 2000,  from AMFM,
Inc. for an allocated  purchase price of $35.0 million in cash plus  liabilities
recorded of $1.2 million and  transaction  related costs of $0.4 million.  Emmis
entered into a definitive  agreement to sell KXPK-FM to  Entravision on February
12,  2002.  Proceeds  were used to repay  amounts  outstanding  under our credit
facility.  In fiscal 2003 we recorded a gain on sale of assets of $10.2 million.
The  assets  of  KXPK-FM  are  reflected  as held for  sale in the  accompanying
consolidated  balance sheet as of February 28, 2002. The $47.3 million of credit
facility debt repaid with the net proceeds of the sale is reflected as a current
liability  in the  accompanying  consolidated  balance  sheet as of February 28,
2002.

     On March 28, 2001, Emmis completed its acquisition of substantially  all of
the assets of radio stations  KTAR-AM,  KMVP-AM and KKLT-FM in Phoenix,  Arizona
from Hearst-Argyle Television, Inc. for $160.0 million in cash, plus transaction
related costs of $0.7 million.  The Company  financed the acquisition  through a
$20.0 million  advance  payment  borrowed under the credit facility in June 2000
and the remainder with  borrowings  under the credit  facility and proceeds from
ECC's March 2001 senior discount notes  offering.  The acquisition was accounted
for as a purchase.  Emmis began programming and selling advertising on the radio
stations on August 1, 2000 under a time brokerage agreement.  The total purchase
price was allocated to property and equipment and broadcast licenses based on an
appraisal.   Broadcast  licenses  are  included  in  intangible  assets  in  the
accompanying  consolidated  balance sheets and,  effective March 1, 2002, are no
longer amortized in the consolidated statements of operations in accordance with
SFAS No. 142.

     On January 15,  2001,  Emmis  entered into an agreement to sell WTLC-AM and
the intellectual property of WTLC-FM (both located in Indianapolis,  Indiana) to
Radio One, Inc., for $8.0 million. The FM sale occurred on February 15, 2001 and
the AM sale occurred on April 25, 2001.  Emmis retained the FCC license at 105.7
and reformatted the station as WYXB-FM.
<PAGE>

     On October 6, 2000, Emmis acquired certain assets of radio stations WIL-FM,
WRTH-AM,  WVRV-FM,  KPNT-FM, KXOK-FM (reformatted as KFTK-FM) and KIHT-FM in St.
Louis,  Missouri from Sinclair Broadcast Group, Inc. for $220.0 million in cash,
plus  transaction  related costs of $10.9 million (the "Sinclair  Acquisition").
The  agreement  also  included the  settlement  of  outstanding  lawsuits by and
between Emmis and Sinclair. The settlement resulted in no gain or loss by either
party.  This  acquisition was financed  through  borrowings  under Emmis' credit
facility  and was  accounted  for as a purchase.  The total  purchase  price was
allocated  to  property  and  equipment  and  broadcast  licenses  based  on  an
appraisal.   Broadcast  licenses  are  included  in  intangible  assets  in  the
accompanying  consolidated  balance sheets and,  effective March 1, 2002, are no
longer amortized in the consolidated statements of operations in accordance with
SFAS No. 142.

     On October 6, 2000,  Emmis  acquired  certain  assets of KZLA-FM (the "KZLA
Acquisition")   in  Los  Angeles,   California  from  Bonneville   International
Corporation in exchange for radio stations  WIL-FM,  WRTH-AM and WVRV-FM,  which
Emmis  acquired  from  Sinclair,  as well as radio  station  WKKX-FM which Emmis
already owned (all in the St. Louis,  Missouri market).  Since the fair value of
WKKX exceeded the book value of the station at the date of the  exchange,  Emmis
recorded  a gain on  exchange  of assets  of $22.0  million.  The fair  value of
WKKX-FM was determined by an  independent  appraiser.  In connection  therewith,
tangible  assets were valued using  either  replacement  cost or current  market
value,  depending  on  the  asset  being  valued.   Intangible  assets  with  an
identifiable revenue stream were valued using discounted cash flows.  Intangible
assets not  producing a readily  identifiable  income  stream were valued  using
residual  fair market value.  This gain is included in other income,  net in the
accompanying consolidated statements of operations.  From August 1, 2000 through
the  date  of  acquisition,  Emmis  operated  KZLA-FM  under  a  time  brokerage
agreement.  The exchange was  accounted  for as a purchase.  The total  purchase
price of $185.0  million was  allocated to property and  equipment and broadcast
licenses  based on an appraisal.  Broadcast  licenses are included in intangible
assets in the accompanying  consolidated  balance sheets and, effective March 1,
2002, are no longer  amortized in the  consolidated  statements of operations in
accordance with SFAS No. 142.

     Effective  October 1, 2000 (closed October 2, 2000),  Emmis purchased eight
network-affiliated and seven satellite television stations from Lee Enterprises,
Inc.  for $559.5  million in cash,  the  payment of $21.3  million  for  working
capital and transaction  related costs of $2.2 million (the "Lee  Acquisition").
In connection with the acquisition, Emmis recorded $31.3 million of deferred tax
liabilities and $17.5 million in contract  liabilities.  Also,  Emmis recorded a
severance  related  liability of $1.8  million,  of which $1.3  million  remains
outstanding  as of February  28, 2003.  This  transaction  was financed  through
borrowings under Emmis' credit facility and was accounted for as a purchase. The
Lee Acquisition consisted of the following stations:

-    KOIN-TV (CBS) in Portland, Oregon

-    KRQE-TV (CBS) in  Albuquerque,  New Mexico  (including  satellite  stations
     KBIM-TV, Roswell, New Mexico and KREZ-TV, Durango, Colorado-Farmington, New
     Mexico)

-    WSAZ-TV (NBC) in Charleston-Huntington, West Virginia

-    KSNW-TV (NBC) in Wichita,  Kansas  (including  satellite  stations KSNG-TV,
     Garden City,  Kansas,  KSNC-TV,  Great Bend,  Kansas and KSNK-TV,  Oberlin,
     Kansas-McCook, Nebraska)

-    KGMB-TV (CBS) in Honolulu,  Hawaii (including  satellite  stations KGMD-TV,
     Hilo, Hawaii and KGMV-TV, Wailuku, Hawaii)

-    KGUN-TV (ABC) in Tucson, Arizona

-    KMTV-TV (CBS) in Omaha, Nebraska and

-    KSNT-TV (NBC) in Topeka, Kansas.

     The  total   purchase  price  was  allocated  to  property  and  equipment,
television program rights,  working capital related items and broadcast licenses
based on an appraisal.  Broadcast  licenses are included in intangible assets in
the accompanying  consolidated  balance sheets and, effective March 1, 2002, are
no longer amortized in the  consolidated  statements of operations in accordance
with SFAS No. 142.

     Because we already  own  KHON-TV in  Honolulu,  and both KHON and KGMB were
rated  among  the top four  television  stations  in the  Honolulu  market,  FCC
regulations  prohibited  us from owning both  stations.  However,  we received a
temporary  waiver from the FCC that has allowed us to operate both stations (and
their  related  "satellite"   stations).   As  a  result  of  recent  regulatory
developments,  we have requested a stay of  divestiture  until the FCC completes
its biennial review. We are currently awaiting the FCC's decision. No assurances
can be given that the FCC will grant us the stay of divestiture  and we may need
to sell one of the two stations in Hawaii.
<PAGE>

     On August 24, 2000,  Emmis acquired the assets of radio station  KKFR-FM in
Phoenix,  Arizona from AMFM,  Inc. for an allocated  $72.0 million in cash, plus
transaction  related  costs of $0.5  million  (the  "AMFM  Acquisition").  Emmis
financed the  acquisition  through  borrowings  under its credit  facility.  The
acquisition  was  accounted  for as a  purchase.  The total  purchase  price was
allocated  to  property  and  equipment  and  broadcast  licenses  based  on  an
appraisal.   Broadcast  licenses  are  included  in  intangible  assets  in  the
accompanying  consolidated  balance sheets and,  effective March 1, 2002, are no
longer amortized in the consolidated statements of operations in accordance with
SFAS No. 142.

     In May,  2000,  Emmis made an offer to purchase the stock of a company that
owns and  operates  WALR-FM in Atlanta,  Georgia.  Because an  affiliate  of Cox
Radio, Inc. held a right of first refusal to purchase WALR-FM,  Emmis' offer was
made on the condition  that Emmis would receive a $17.0 million  break-up fee if
WALR-FM was sold pursuant to the right of first refusal.  In June, 2000, the Cox
affiliate  submitted  an offer to  purchase  WALR-FM  under  the  right of first
refusal and an application to transfer the station's FCC licenses was filed with
the FCC. Emmis received the break-up fee upon the closing of the sale of WALR-FM
under the right of first refusal on August 31, 2000,  which is included in other
income in the accompanying consolidated statements of operations.

     On March 3, 2000,  Emmis acquired all of the  outstanding  capital stock of
Los Angeles Magazine Holding Company,  Inc. for  approximately  $36.8 million in
cash plus  liabilities  recorded  of $2.7  million  (the "Los  Angeles  Magazine
Acquisition").   Los  Angeles  Magazine  Holding   Company,   Inc.,   through  a
wholly-owned  subsidiary,  owns and operates Los Angeles,  a city magazine.  The
acquisition was accounted for as a purchase and was financed through  additional
borrowings under its credit facility.  The excess of the purchase price over the
estimated fair value of identifiable assets was $36.0 million, which is included
in  intangible  assets in the  accompanying  consolidated  balance  sheets  and,
effective March 1, 2002, is no longer amortized in the  consolidated  statements
of operations in accordance with SFAS No. 142.


RESULTS OF OPERATIONS

YEAR ENDED FEBRUARY 28, 2003 COMPARED TO YEAR ENDED FEBRUARY 28, 2002

Pro forma reconciliation:

     During fiscal 2003, we sold two radio stations in Denver (see Note 6 in the
accompanying Notes to Consolidated  Financial  Statements).  The following table
reconciles actual results to pro forma results.

                                             Year ended February 28,
                                             2003              2002
                                             ----              ----

Reported net revenues                      $ 562,363        $ 539,822

Less:  Net revenues from radio
          assets disposed                     (1,238)         (11,968)
                                              ------          -------

Pro forma net revenues                     $ 561,125        $ 527,854
                                           =========        =========

Reported station operating expenses,
  excluding noncash compensation           $ 349,251        $ 354,157

Less:  Station operating expenses,
  excluding noncash compensation from
  radio assets disposed                         (708)          (8,649)
                                                ----           ------

Pro forma station operating expenses,
  excluding noncash compensation           $ 348,543        $ 345,508
                                           =========        =========

For  further  disclosure  of segment  results,  see Note 11 to the  accompanying
consolidated financial statements.


<PAGE>



Net revenues:

     Radio net revenues  for the year ended  February  28, 2003  decreased  $7.3
million,  or 2.8%.  On a pro forma basis  (assuming the Denver radio asset sales
had occurred on March 1, 2001),  radio net revenues for the year ended  February
28, 2003 would have  increased  $3.5 million,  or 1.4%.  Radio net revenues were
negatively   impacted  by  the   devaluation  of  the  peso  in  Argentina,   as
international  radio net revenues for the year ended February 28, 2003 decreased
$4.9 million, or 29.3%.  Domestic radio net revenues were negatively impacted by
a format change by one of our  competitors in the New York market.  The negative
impact in our New York market,  which represents  approximately 30% of our radio
net revenues,  was offset by improved  performance  in our other radio  markets,
especially Los Angeles and Phoenix.

     Television  net  revenues for the year ended  February  28, 2003  increased
$28.2 million, or 13.7%. This increase is due to our television stations selling
a higher  percentage of their inventory and charging higher rates due to ratings
improvements,  coupled with approximately $17.5 million of political advertising
net revenues in the year ended February 28, 2003.

     Publishing  revenues for the year ended  February 28, 2003  increased  $1.6
million, or 2.2%. Publishing revenues were essentially flat for the year, as our
publishing  business  has not seen the same level of recovery  in  advertisement
spending that, in general, our radio and television businesses have experienced.

     On a consolidated  basis, net revenues for the year ended February 28, 2003
increased $22.5 million, or 4.2% due to the effect of the items described above.
On a pro  forma  basis,  net  revenues  for the year  ended  February  28,  2003
increased $33.2 million, or 6.3% due to the effect of the items described above.

Station operating expenses, excluding noncash compensation:

     Radio station operating expenses, excluding noncash compensation, decreased
$10.7  million,  or 7.2% for the year ended  February 28,  2003.  On a pro forma
basis  (assuming  the Denver  radio asset sales had  occurred on March 1, 2001),
radio station operating expenses,  excluding noncash compensation,  for the year
ended February 28, 2003 would have decreased $2.7 million, or 1.9%. Increases in
promotional spending for our radio stations were offset by the implementation of
our stock  compensation  program in December  2001,  whereby the salaries of our
full-time  employees  were  generally  reduced  by 10% and  supplemented  with a
corresponding stock grant that is reflected in noncash compensation expense.

     Television station operating expenses, excluding noncash compensation,  for
the year ended February 28, 2003 increased $7.7 million,  or 5.5%. This increase
is due to higher  programming,  promotion  and  sales-related  costs,  partially
offset by the impact of our stock compensation program.

     Publishing operating expenses,  excluding noncash  compensation,  decreased
$1.9 million,  or 3.0% for the year ended  February 28, 2003 due to cost control
measures and our stock compensation program.

     On a consolidated  basis,  station  operating  expenses,  excluding noncash
compensation,  for the year ended February 28, 2003  decreased $4.9 million,  or
1.4%,  due to the effect of the items  described  above.  On a pro forma  basis,
station operating expenses,  excluding noncash compensation,  for the year ended
February 28, 2003  increased  $3.0  million,  or 0.9%,  due to the effect of the
items described above.

Noncash compensation expenses:

     Noncash  compensation  expenses  for the year ended  February 28, 2003 were
$22.5 million compared to $9.1 million for the same period of the prior year, an
increase  of $13.4  million or  147.7%.  In fiscal  2003,  $10.2  million,  $6.5
million,   $2.3  million  and  $3.5  million  was  attributable  to  our  radio,
television,  publishing and corporate divisions,  respectively.  In fiscal 2002,
$5.5 million,  $2.4 million,  $0.4 million and $0.8 million was  attributable to
our radio, television, publishing and corporate divisions, respectively. Noncash
compensation  includes  compensation  expense  associated with restricted common
stock issued under  employment  agreements,  common stock issued to employees at
our  discretion,  and common  stock  issued to  employees  pursuant to our stock
compensation  program.  Our  stock  compensation  program  resulted  in  noncash
compensation  expense of approximately $16.5 million for the year ended February
28, 2003. Our stock compensation  program began December 2001;  therefore,  only
$3.1 million of expense was included in noncash compensation expense in the year
ended February 28, 2002.


<PAGE>



Corporate expenses, excluding noncash compensation:

     Corporate  expenses,  excluding  noncash  compensation,  for the year ended
February  28, 2003 were $21.4  million  compared  to $20.3  million for the same
period of the prior  year,  an  increase  of $1.1  million or 5.3%.  These costs
increased due to higher  professional  fees  associated with financing and other
transactions,  and higher  health  care  costs,  partially  offset by lower cash
compensation due to our stock compensation program.

Depreciation and amortization:

     Radio depreciation and amortization expense for the year ended February 28,
2003 was $8.1 million compared to $33.5 million for the same period of the prior
year, a decrease of $25.4 million or 75.7%. The decrease was mainly attributable
to our adoption on March 1, 2002 of SFAS No. 142, "Goodwill and Other Intangible
Assets." Adoption of this accounting  standard had the impact of eliminating our
amortization expense for goodwill and FCC licenses. For comparison purposes, for
the year ended  February 28, 2002, we recorded  radio  amortization  expense for
goodwill and FCC licenses of $24.8 million.

     Television  depreciation  and  amortization  expense  for  the  year  ended
February  28,  2003 was $28.5  million  compared  to $53.5  million for the same
period of the prior year, a decrease of $25.0 million or 46.8%. The decrease was
also mainly  attributable  to our adoption of SFAS No. 142,  "Goodwill and Other
Intangible  Assets." For  comparison  purposes,  for the year ended February 28,
2002, we recorded television  amortization expense for goodwill and FCC licenses
of $28.0 million.

     Publishing  depreciation  and  amortization  expense  for  the  year  ended
February 28, 2003 was $1.9 million  compared to $8.5 million for the same period
of the prior year,  a decrease of $6.6  million or 77.4%.  The decrease was also
mainly  attributable  to our  adoption  of SFAS No.  142,  "Goodwill  and  Other
Intangible  Assets." For  comparison  purposes,  for the year ended February 28,
2002, we recorded publishing amortization expense for goodwill of $5.4 million.

     On a consolidated basis, depreciation and amortization expense for the year
ended  February 28, 2003 was $43.4  million  compared to $100.3  million for the
same  period of the prior  year,  a  decrease  of $56.9  million  or 56.7%.  The
decrease was also mainly attributable to our adoption of SFAS No. 142, "Goodwill
and Other  Intangible  Assets."  For  comparison  purposes,  for the year  ended
February  28,  2002,  we  recorded  amortization  expense for  goodwill  and FCC
licenses of $58.2 million.

Operating income:

     Radio  operating  income for the year  ended  February  28,  2003 was $98.1
million  compared to $64.5  million  for the same  period of the prior year,  an
increase  of $33.6  million  or 52.3%.  This  increase  is  attributable  to our
adoption of SFAS No. 142,  "Goodwill and Other Intangible  Assets."  Adoption of
this accounting  standard had the impact of eliminating  our radio  amortization
expense for goodwill and FCC  licenses,  which totaled $24.8 million in the year
ended February 28, 2002. The prior year radio  operating  income included a $9.1
million impairment loss related to the sale of a radio station.

     Television  operating income for the year ended February 28, 2003 was $51.7
million  compared to $8.7  million  for the same  period of the prior  year,  an
increase  of $43.0  million  or  492.1%.  This  increase  was  driven  by higher
revenues, as previously  described,  and our adoption of SFAS No. 142, "Goodwill
and Other  Intangible  Assets."  Adoption of this  accounting  standard  had the
impact of eliminating our television  amortization  expense for goodwill and FCC
licenses, which totaled $28.0 million in the year ended February 28, 2003.

     Publishing  operating  income for the year ended February 28, 2003 was $5.7
million  compared  to a loss of $2.5  million  for the same  period of the prior
year. The increase was primarily  attributable  to our adoption of SFAS No. 142,
"Goodwill and Other Intangible Assets." Adoption of this accounting standard had
the impact of  eliminating  our  publishing  amortization  expense for goodwill,
which totaled $5.4 million in the year ended February 28, 2002.

     On a consolidated  basis,  operating income for the year ended February 28,
2003 was $125.9  million  compared  to $44.1  million for the same period of the
prior year, an increase of $81.8 million or 185.3%.  This increase resulted from
better  operating  performance  at  our  stations,   especially  our  television
stations,  and our  adoption of SFAS No.  142,  "Goodwill  and Other  Intangible
Assets," each as described above.  Adoption of this accounting  standard had the
impact of eliminating  our  amortization  expense for goodwill and FCC licenses,
which totaled $58.2 million in the year ended February 28, 2002.


<PAGE>



Interest expense:

     With  respect to Emmis,  interest  expense for the year ended  February 28,
2003 was $103.8  million  compared to $129.1  million for the same period of the
prior year, a decrease of $25.3 million or 19.6%.  This decrease is attributable
to a decrease  in the  interest  rates we pay on amounts  outstanding  under our
credit  facility,  which is  variable  rate  debt,  and  repayments  of  amounts
outstanding  under our  credit  facility  and our  senior  discount  notes.  The
decreased interest rates reflected both a decrease in the base interest rate for
our credit  facility due to a lower  overall  interest rate  environment,  and a
decrease  in the margin  applied to the base rate  resulting  from the June 2002
credit facility amendment.  In the quarter ended May 31, 2002, we repaid amounts
outstanding  under our credit  facility  with the  proceeds of our Denver  radio
asset sales in May 2002 and a portion of the proceeds  from our equity  offering
in  April  2002,  with  the  remaining  portion  being  used to  reduce  amounts
outstanding  under our senior  discount  notes in the quarter  ended  August 31,
2002. We reduced our total debt  outstanding  by $270.6  million during the year
ended  February 28, 2003.  With  respect to EOC,  interest  expense for the year
ended  February 28, 2003 was $78.1  million  compared to $104.1  million for the
same  period of the prior  year,  a decrease  of $26.0  million  or 25.0%.  This
decrease is also primarily  attributable  to a decrease in the interest rates we
pay on amounts outstanding under our credit facility,  and repayments of amounts
outstanding under our credit facility.  The difference  between interest expense
for Emmis and EOC is due to interest expense associated with the senior discount
notes, for which ECC is the obligor, and thus it is excluded from the results of
operations of EOC.

Income (loss) before income taxes, extraordinary loss and accounting change:

     With respect to Emmis,  income before income taxes,  extraordinary loss and
accounting  change  increased to $27.3  million for the year ended  February 28,
2003 from a loss before income taxes,  extraordinary  loss and accounting change
of $88.6  million  for the same period of the prior  year.  The  increase in the
income before income taxes,  extraordinary  loss and  accounting  change for the
year ended  February 28, 2003 is mainly  attributable  to: (1) better  operating
results at our stations,  (2) the  elimination of our  amortization  expense for
goodwill and broadcasting licenses of $58.2 million, (3) a reduction in interest
expense as a result of the factors described above under interest  expense,  and
(4) the gain on sale of our Denver radio assets of $8.9 million.  The prior year
loss before income taxes,  extraordinary  loss and accounting  change included a
$9.1  million  impairment  loss  related  to the sale of a radio  station.  With
respect to EOC,  income before income taxes,  extraordinary  loss and accounting
change  increased to $53.1  million for the year ended  February 28, 2003 from a
loss before  income taxes,  extraordinary  loss and  accounting  change of $64.6
million for the same period of the prior year. The increase in the income before
income taxes,  extraordinary  loss and accounting change is mainly  attributable
to: (1) better  operating  results at our stations,  (2) the  elimination of our
amortization  expense for goodwill and  broadcasting  licenses of $58.2 million,
(3) a reduction in interest  expense as a result of the factors  described above
under interest  expense,  and (4) the gain on sale of our Denver radio assets of
$8.9 million.  The prior year loss before income taxes,  extraordinary  loss and
accounting change included a $9.1 million impairment loss related to the sale of
a radio station.

Net loss:

     With  respect  to Emmis,  net loss was  $164.5  million  for the year ended
February 28, 2003 compared to a loss of $64.1 million for the same period of the
prior  year.  The  increase in net loss is mainly  attributable  to (1) a $167.4
million impairment  charge, net of a deferred tax benefit,  under the cumulative
effect of accounting change as an accumulated transition adjustment attributable
to the adoption on March 1, 2002 of SFAS No. 142, "Goodwill and Other Intangible
Assets." (2) a $11.1 million  extraordinary loss, net of a deferred tax benefit,
relating to the premium paid on the  redemption  of our  discount  notes and the
write-off of deferred debt fees associated with debt repaid during the year, and
(3) better operating results, the elimination of amortization  expense, the gain
on asset sales and the reduction in interest  expense,  all described above, and
all net of taxes.  With respect to EOC, net loss was $139.6 million for the year
ended  February  28, 2003  compared to a net loss of $47.9  million for the same
period of the prior year. The increase in net loss is mainly attributable to (1)
a $167.4 million  impairment  charge,  net of a deferred tax benefit,  under the
cumulative effect of accounting change as an accumulated  transition  adjustment
attributable  to the  adoption on March 1, 2002 of SFAS No. 142,  "Goodwill  and
Other  Intangible  Assets;"  (2) a $2.9  million  extraordinary  loss,  net of a
deferred tax benefit, relating to the write-off of deferred debt fees associated
with debt  repaid  during  the  year,  and (3)  better  operating  results,  the
elimination of amortization  expense,  the gain on asset sales and the reduction
in interest expense, all described above, and all net of taxes.


<PAGE>



RESULTS OF OPERATIONS

YEAR ENDED FEBRUARY 28, 2002 COMPARED TO YEAR ENDED FEBRUARY 28, 2001

Pro forma reconciliation:

     During fiscal 2001, we acquired numerous radio and television stations (see
Note 6 in the  accompanying  Notes to Consolidated  Financial  Statements).  The
following table reconciles actual results to pro forma results:


                                           Year ended February 28,
                                            2002            2001
                                            ----            ----

Reported net revenues                     $539,822       $473,345

Plus:  Net revenues from
  radio and television assets
  acquired during fiscal 2001                    -        101,338
                                          --------       --------

Pro forma net revenues                    $539,822       $574,683
                                          ========       ========

Reported station operating expenses,
  excluding noncash compensation          $354,157       $299,132

Plus:  Station operating expenses,
  excluding noncash compensation from
  radio and television assets acquired
  during fiscal 2001                             -         63,973
                                          --------       --------

Pro forma station operating expenses,
  excluding noncash compensation          $354,157       $363,105
                                          ========       ========

For  further  disclosure  of segment  results,  see Note 11 to the  accompanying
consolidated financial statements.

Net revenues:

     Radio net revenues for the year ended  February  28, 2002  increased  $19.9
million,  or 8.2%. On a pro forma basis (after giving effect to all acquisitions
consummated since March 1, 2000), radio net revenues for the year ended February
28, 2002 would have decreased  $10.4 million,  or 3.8%.  Radio net revenues were
negatively impacted by a softening U.S. economy resulting in an overall decrease
in advertising sales and the events of September 11th. Our New York radio market
suffered the biggest  decline in our radio group  primarily  attributable to its
proximity to the terrorist attacks. Our largest markets of Los Angeles, New York
and Chicago generally  declined more than our Phoenix,  St. Louis,  Indianapolis
and Terre Haute markets as national  advertising  represents a higher percentage
of revenues in the largest markets and fell more rapidly than local advertising.

     Television  net  revenues for the year ended  February  28, 2002  increased
$49.5  million,  or 31.6%.  On a pro forma  basis  (after  giving  effect to all
acquisitions  consummated since March 1, 2000),  television net revenues for the
year ended  February 28, 2002 would have decreased  $21.6 million,  or 9.5%. The
decline in television net revenues is attributable  to a softening U.S.  economy
coupled  with the absence of  political  television  advertisements  in the year
ended  February 28, 2002.  The decrease was  partially  offset by a $3.7 million
increase in net  revenues  primarily  attributable  to our  television  division
earning a  performance  guaranty  when our  national  sales rep  agency  did not
achieve certain performance targets in the second quarter.
<PAGE>

     Publishing net revenues for the year ended February 28, 2002 decreased $2.9
million,  or 4.0%.  These results are the same on a pro forma basis.  Publishing
net revenues were also adversely  affected by a softening U.S. economy resulting
in an overall decrease in print advertisement sales.

     On a consolidated  basis, net revenues for the year ended February 28, 2002
increased $66.5 million,  or 14.0%. On a pro forma basis (after giving effect to
all acquisitions consummated since March 1, 2000), consolidated net revenues for
the year ended February 28, 2002 would have decreased $34.9 million, or 6.1% due
to the effect of the items described above.

Station operating expenses, excluding noncash compensation:

     Radio station operating expenses, excluding noncash compensation, increased
$13.0  million,  or 9.6%.  On a pro  forma  basis  (after  giving  effect to all
acquisitions  consummated  since  March  1,  2000),  radio  operating  expenses,
excluding  noncash  compensation for the year ended February 28, 2002 would have
decreased  $4.9 million,  or 3.2%.  This pro forma  decrease is primarily due to
decreased promotional  spending,  partially offset by sales personnel increases.
Also,  in the quarter  ended  February 28, 2002,  we  implemented a 10% wage cut
which was supplemented with a corresponding 10% Emmis stock award.

     Television  station operating  expenses,  excluding  noncash  compensation,
increased $42.8 million,  or 43.9%. On a pro forma basis (after giving effect to
all  acquisitions   consummated  since  March  1,  2000),  television  operating
expenses,  excluding  noncash  compensation for the year ended February 28, 2002
would have  decreased $3.2 million,  or 2.3%.  This pro forma decrease is due to
the  elimination of certain  operational  positions,  partially  offset by sales
personnel  increases.   Also,  in  the  quarter  ended  February  28,  2002,  we
implemented a 10% wage cut which was supplemented with a corresponding 10% Emmis
stock award.

     Publishing operating expenses,  excluding noncash  compensation,  decreased
$0.8  million,  or  1.3%.  This  decrease  is  primarily  attributable  to lower
production and sales related costs resulting from lower overall sales.  Also, in
the quarter  ended  February 28, 2002,  we  implemented a 10% wage cut which was
supplemented with a corresponding 10% Emmis stock award.

     On a consolidated  basis,  station  operating  expenses,  excluding noncash
compensation,  for the year ended February 28, 2002 increased $55.0 million,  or
18.4%. On a pro forma basis (after giving effect to all acquisitions consummated
since March 1, 2000), consolidated station operating expenses, excluding noncash
compensation  for the year ended  February  28, 2002 would have  decreased  $8.9
million,  or 2.5% due to the effect of the items described  above.  The wage cut
supplemented with a corresponding Emmis stock award described above reduced cash
operating expenses by approximately $3.1 million for the year ended February 28,
2002.

Noncash compensation expenses:

     Non-cash compensation expense for the year ended February 28, 2002 was $9.1
million  compared to $5.4  million  for the same  period of the prior  year,  an
increase of $3.7 million or 68.4%. In fiscal 2002,  $5.5 million,  $2.4 million,
$0.4  million  and $0.8  million  was  attributable  to our  radio,  television,
publishing and corporate divisions,  respectively. In fiscal 2001, $3.7 million,
$0.5  million,  $0.2  million and $1.0  million was  attributable  to our radio,
television,   publishing  and  corporate   divisions,   respectively.   Non-cash
compensation   includes  compensation  expense  associated  with  stock  options
granted,  restricted  common stock issued under  employment  agreements,  common
stock  contributed to the Company's  Profit Sharing Plan and common stock issued
to employees at our discretion.  This increase was due to the payment of certain
employee incentives with our common stock and stock issued to supplement the 10%
wage reduction discussed above.

Corporate expenses, excluding noncash compensation:

     Corporate  expenses for the year ended February 28, 2002 were $20.3 million
compared to $17.6  million for the same period of the prior year, an increase of
$2.7  million or 15.2%.  This  increase  is due to an  increase in the number of
corporate  employees  in all  departments  as a result of our recent  growth and
training investments we have made in our personnel.

Depreciation and amortization:

     Radio depreciation and amortization expense for the year ended February 28,
2002 was $33.5  million  compared  to $21.5  million  for the same period of the
prior year, an increase of $12.0 million or 56.1%.  Television  depreciation and
amortization  expense for the year ended  February  28,  2002 was $53.5  million
compared to $33.6  million for the same period of the prior year, an increase of
$19.9 million or 59.4%.  Substantially  all of the increase in depreciation  and

<PAGE>

amortization  for our  radio and  television  divisions  is due to  acquisitions
consummated  since March 1, 2000.  Publishing  depreciation and amortization for
the year ended February 28, 2002 was $8.5 million  compared to $14.9 million for
the same period of the prior year, a decrease of $6.4 million, or 43.3%. Certain
intangible assets became fully amortized in fiscal 2001 and were not included in
amortization  expense in fiscal 2002. On a consolidated basis,  depreciation and
amortization  expense for the year ended  February  28, 2002 was $100.3  million
compared to $74.0  million for the same period of the prior year, an increase of
$26.3 million or 35.5% due to the effect of the items described above.

Operating income:

     Radio  operating  income for the year  ended  February  28,  2002 was $64.5
million  compared to $71.7  million  for the same  period of the prior  year,  a
decrease  of $7.2  million or 10.1%.  This  decrease is due to the change in net
revenues  and expenses  described  above as well as an  impairment  loss of $9.1
million related to the sale of KALC-FM to Entercom  Communications  Corporation,
effective May 1, 2002. In the year ended February 28, 2001, the Company recorded
an impairment  loss of $2.0 million related to the sale of WTLC-AM to Radio One,
Inc.

     Television  operating  income for the year ended February 28, 2002 was $8.7
million  compared to $25.4  million  for the same  period of the prior  year,  a
decrease of $16.7 million or 65.6%.  This decrease is due to the items described
above as well as a $1.6  million  charge  recorded in fiscal 2002 related to the
early termination of certain television contracts.

     Publishing  operating  loss for the year ended  February  28, 2002 was $2.5
million  compared  to $6.6  million  for the same  period of the prior  year,  a
decrease  of $4.1  million  or  62.8%.  This  improvement  resulted  from  lower
depreciation and amortization  expense, as discussed above,  partially offset by
the change in net revenues and expenses, as discussed above.

     On a consolidated  basis,  operating income for the year ended February 28,
2002 was $44.1  million  compared  to $65.8  million  for the same period of the
prior year, a decrease of $21.7  million or 33.0%.  This  decrease is due to the
decline in  profitability  at each of our  divisions,  as described  above,  and
higher  depreciation and amortization  expense from recently acquired  stations,
partially offset by the operating performance of those stations.

Interest expense:

     With  respect to Emmis,  interest  expense was $129.1  million for the year
ended  February  28, 2002  compared to $72.4  million for the same period of the
prior year, an increase of $56.7 million or 78.2%. This increase reflects higher
outstanding  debt due to  acquisitions  consummated  since March 1, 2000, all of
which were financed with debt  (including our 12.5% senior discount notes issued
March 2001),  partially  offset by lower  interest  rates on our  floating  rate
senior bank debt.

     With respect to EOC, interest expense was $104.1 million for the year ended
February  28, 2002  compared  to $72.4  million for the same period of the prior
year,  an increase of $31.7  million or 43.7%.  This  increase  reflects  higher
outstanding debt due to acquisitions  consummated since March 1, 2000, partially
offset by lower  interest rates on our floating rate senior debt. The difference
between interest expense for Emmis and EOC is due to interest expense associated
with the senior  discount  notes,  for which ECC is the obligor,  and thus it is
excluded from the operations of EOC.

Income (loss) before income taxes, extraordinary loss and accounting change:

     With respect to Emmis, loss before income taxes and extraordinary  loss for
the year ended  February 28, 2002 was $88.6 million  compared to income of $31.4
million  for the  same  period  of the  prior  year.  This  decrease  is  mainly
attributable to: (1) lower operating income, as discussed above, higher interest
expense,  as  discussed  above,  and the  decrease in other  income as the prior
year's other income included a $22.0 million gain on exchange of assets,  offset
by valuation adjustments on certain investments and a $17.0 million break-up fee
received  in  connection  with the sale of  WALR-FM in  Atlanta,  Georgia to Cox
Radio,  Inc., net of related  expenses.  With respect to EOC, loss before income
taxes and  extraordinary  loss was  $64.6  million  compared  to income of $31.4
million  for the  same  period  of the  prior  year.  This  decrease  is  mainly
attributable to: (1) lower operating income, as discussed above, higher interest
expense,  as  discussed  above,  and the  decrease in other  income as the prior
year's other income included a $22.0 million gain on exchange of assets,  offset
by valuation adjustments on certain investments and a $17.0 million break-up fee
received  in  connection  with the sale of  WALR-FM in  Atlanta,  Georgia to Cox
Radio, Inc., net of related expenses.
<PAGE>

Net loss:

     With  respect  to Emmis,  net loss was  $64.1  million  for the year  ended
February 28, 2002 compared to net income of $13.7 million for the same period of
the prior  year.  The  decrease  in net income is mainly  attributable  to lower
operating income and higher interest expense, each described above, and each net
of taxes.  During the year ended February 28, 2002, EOC repaid $128.0 million of
indebtedness  under its  credit  facility,  which  permanently  reduced  amounts
available thereunder.  As a result of the early payoff of the indebtedness,  the
Company recorded an extraordinary  loss of  approximately  $1.1 million,  net of
taxes, related to unamortized deferred debt costs. With respect to EOC, net loss
was $47.9 million for the year ended February 28, 2002 compared to net income of
$13.7 million for the same period of the prior year.  The decrease in net income
is mainly  attributable to lower operating  income and higher interest  expense,
each described above, and each net of taxes.  During the year ended February 28,
2002, EOC repaid $128.0 million of indebtedness under its credit facility, which
permanently  reduced  amounts  available  thereunder.  As a result  of the early
payoff of the  indebtedness,  the  Company  recorded  an  extraordinary  loss of
approximately $1.1 million,  net of taxes,  related to unamortized deferred debt
costs.

LIQUIDITY AND CAPITAL RESOURCES

    OFF-BALANCE SHEET FINANCINGS AND LIABILITIES

     Other than lease commitments,  legal  contingencies  incurred in the normal
course of  business,  agreements  for future  barter and program  rights not yet
available for broadcast at February 28, 2003, and  employment  contracts for key
employees,  all of which are disclosed in Note 9 to the  consolidated  financial
statements,  the  Company  does not have any  off-balance  sheet  financings  or
liabilities.  The Company does not have any majority-owned subsidiaries that are
not included in the consolidated financial statements, nor does the Company have
any interests in or relationships with any  "special-purpose  entities" that are
not reflected in the consolidated financial statements or disclosed in the Notes
to Consolidated Financial Statements.

    SUMMARY DISCLOSURES ABOUT CONTRACTUAL CASH OBLIGATIONS

The following table reflects a summary of our contractual cash obligations as of
February 28, 2003:
<TABLE>
<CAPTION>


                                                                    PAYMENTS DUE BY PERIOD
                                                                    (AMOUNTS IN THOUSANDS)
                                                              Less than     1 to 3          4 to 5             After 5
Contractual Cash Obligations:                  Total           1 Year        Years           Years              Years
-----------------------------                  -----           ------        -----           -----              -----

<S>            <C>                           <C>              <C>          <C>             <C>              <C>
Long-term debt (1)                           $ 1,311,219      $ 14,912     $ 88,759        $ 93,738         $ 1,113,810
Operating leases                                  66,101         9,494       15,311          11,692              29,604
TV program rights payable (2)                     59,468        27,424       22,513           7,695               1,836
Future TV program rights payable (2)              57,279        10,877       32,963          11,252               2,187
Radio broadcast agreements                         5,994         1,640        2,369           1,905                  80
Employment agreements                             49,771        25,743       19,959           2,689               1,380
                                                  ------        ------       ------           -----               -----

Total Contractual Cash Obligations           $ 1,549,832      $ 90,090    $ 181,874       $ 128,971         $ 1,148,897
                                             ===========      ========    =========       =========         ===========
</TABLE>

(1)  ECC's senior  discount  notes accrete to a face value of $286.3  million in
     March 2006 and become due in March  2011.  As of  February  28,  2003,  the
     carrying  value of the  senior  discount  notes was  $197.8  million.  With
     respect to EOC,  the above  table  would be the same  except  ECC's  senior
     discount notes would be excluded.

(2)  TV program rights payable represents payments to be made to various program
     syndicators and  distributors in accordance with current  contracts for the
     rights to broadcast  programs.  Future TV program rights payable represents
     commitments  for program  rights not available for broadcast as of February
     28, 2003.

We expect to fund these payments primarily with cash flows from operations,  but
we may also issue additional debt or equity or sell assets.


<PAGE>


SOURCES OF LIQUIDITY

     Our primary  sources of liquidity are cash provided by operations  and cash
available  through  revolving loan  borrowings  under our credit  facility.  Our
primary uses of capital have been historically,  and are expected to continue to
be, funding acquisitions, capital expenditures, working capital and debt service
and, in the case of ECC, preferred stock dividend requirements.  Since we manage
cash on a  consolidated  basis,  any  cash  needs  of a  particular  segment  or
operating entity are met by intercompany transactions.  See Investing Activities
below for discussion of specific segment needs.

     At February 28, 2003, we had cash and cash equivalents of $16.1 million and
net  working  capital  for Emmis  and EOC of $28.0  million  and $29.1  million,
respectively.  At February 28, 2002,  we had cash and cash  equivalents  of $6.4
million  and net working  capital  for Emmis and EOC of $19.8  million and $21.0
million,   respectively,   excluding   assets  held  for  sale  and   associated
liabilities.  The  increase  in net  working  capital  primarily  relates to the
increase in cash and accounts  receivable  increasing  more than the increase in
current liabilities.

     Operating Activities

     With respect to Emmis, net cash flows provided by operating activities were
$95.1 million for the year ended February 28, 2003 compared to $69.4 million for
the same period of the prior year.  With respect to EOC, net cash flows provided
by operating  activities were $94.2 million for the year ended February 28, 2003
compared to net cash flows provided by operating activities of $67.4 million for
the same  period of the prior  year.  The  increase  in cash flows  provided  by
operating  activities  for the year ended  February  28, 2003 as compared to the
same  period in the  prior  year is due to our  increase  in net  revenues  less
station  operating  expenses and corporate  expenses,  partially  driven by cash
savings  generated  by  our  stock  compensation   program.   We  experienced  a
significant increase in cash flows provided by operating activities in our third
fiscal  quarter  of the  current  year.  The third  quarter  of the  prior  year
reflected the immediate  impacts of the events of September 11, 2001. Cash flows
provided by operating  activities are  historically the highest in our third and
fourth  fiscal  quarters as a  significant  portion of our  accounts  receivable
collections  is derived from revenues  recognized in our second and third fiscal
quarters, which are our highest revenue quarters.

     Investing Activities

     Cash flows  provided by investing  activities  were $106.3  million for the
year ended  February  28,  2003  compared  to cash used in  investing  of $175.1
million  in the same  period of the  prior  year.  This  increase  is  primarily
attributable  to our sales of radio stations in the year ended February 28, 2003
as opposed to our  purchase  of radio  stations in the year ended  February  28,
2002.   Investment   activities   include  capital   expenditures  and  business
acquisitions and dispositions.

     As  discussed  in  results  of  operations  above  and  in  Note  6 to  the
accompanying  condensed  consolidated  financial  statements,  Emmis  sold radio
stations  KALC-FM and KXPK-FM in Denver,  Colorado for $135.5 million in cash in
the quarter  ended May 31, 2002.  The net cash  proceeds of $135.5  million were
used to repay outstanding  borrowings under the credit facility. As disclosed in
the  supplemental  disclosures to the  statements of cash flows,  Emmis acquired
radio stations KKLT-FM, KTAR-AM and KMVP-AM, in Phoenix, Arizona, in the quarter
ended  May 31,  2001  for cash of  $140.7  million.  The  Company  financed  the
acquisition  through a $20.0 million advance  payment  borrowed under the credit
facility  in June  2000 and the  remainder  with  borrowings  under  the  credit
facility  and proceeds  from ECC's March 2001 senior  discount  notes  offering.
Emmis began programming and selling  advertising on the radio stations on August
1, 2000 under a time brokerage agreement.

     Capital expenditures  primarily relate to leasehold improvements to various
office and studio facilities,  broadcast equipment purchases, tower upgrades and
computer equipment replacements.  In the years ended February 28, 2001, 2002 and
2003, we had capital  expenditures  of $26.2 million,  $30.1 million,  and $30.5
million,  respectively.  These capital expenditures primarily relate to the WALA
operating facility project,  leasehold improvements to various office and studio
facilities,  broadcast equipment purchases,  tower upgrades and costs associated
with  our  conversion  to  digital   television.   We  anticipate   that  future
requirements for capital expenditures will include capital expenditures incurred
during the ordinary course of business,  including approximately $6.5 million in
fiscal 2004 for the  conversion to digital  television.  Although we expect that
substantially  all of our stations will broadcast a digital signal by the end of
our fiscal 2004, we will incur  approximately  $8 million of  additional  costs,
after fiscal 2004, to upgrade the digital signals of three of our local stations
and six of our satellite stations.  We expect to fund such capital  expenditures
with cash generated from  operating  activities and borrowings  under our credit
facility.


<PAGE>



     Financing Activities

     Cash  flows  used in  financing  activities  for Emmis and EOC were  $191.7
million and $190.8 million,  respectively, for the year ended February 28, 2003.
Cash flows provided by financing activities for Emmis and EOC were $52.2 million
and $54.2 million, respectively, for the same period of the prior year.

     As discussed in Note 2 to the accompanying condensed consolidated financial
statements,  in April 2002,  ECC completed the sale of 4.6 million shares of its
Class A common stock at $26.80 per share  resulting in total  proceeds of $123.3
million.  The net proceeds of $120.2 million were  contributed to EOC and 50% of
the net proceeds were used in April 2002 to repay  outstanding  borrowings under
our credit facility. The remainder was invested, and in July 2002 distributed to
ECC to redeem  approximately  22.6% of ECC's $370.0 million,  face value, senior
discount  notes (see  discussion  below).  As indicated in Investing  Activities
above,  net proceeds of $135.5  million  from the sale of two radio  stations in
Denver  were  also  used to repay  outstanding  indebtedness  under  the  credit
facility during the year ended February 28, 2003.

     On March 27,  2001,  ECC  received  $202.6  million  of  proceeds  from the
issuance of $370.0 million face value,  12 1/2% senior  discount notes due 2011.
The net proceeds of $190.6  million,  less $93.0  million held in escrow at ECC,
were  distributed  to EOC and used to fund the  acquisition of the Phoenix radio
stations discussed in Investing  Activities above. In June 2001, upon completion
of the Company's  reorganization to form EOC and make ECC a holding company, the
proceeds held in escrow were released and used to reduce outstanding  borrowings
under the credit facility.

     As of February 28, 2003, EOC had $1,006.9 million of corporate indebtedness
outstanding  under our credit facility ($706.9 million) and senior  subordinated
notes ($300.0 million),  and other indebtedness ($18.0 million).  As of February
28,  2003,  total  indebtedness  outstanding  for  Emmis  included  all of EOC's
indebtedness as well as $197.8 million of ECC's senior discount notes.  ECC also
had  $143.8  million  of  our  convertible  preferred  stock  outstanding.   All
outstanding amounts under our credit facility bear interest, at our option, at a
rate equal to the Eurodollar rate or an alternative Base Rate plus a margin.  As
of February  28,  2003,  our weighted  average  borrowing  rate under our credit
facility,  including the effects of interest rate swaps (see  discussion in Item
7A. below),  was  approximately  4.7% and our overall weighted average borrowing
rate,   after  taking  into  account  amounts   outstanding   under  our  senior
subordinated  notes and senior  discount  notes,  was  approximately  6.8%.  The
overall weighted average  borrowing rate for EOC, which would exclude the senior
discount notes, was approximately 5.7%.

     The debt service requirements of EOC over the next twelve month period (net
of interest under our credit  facility) are expected to be $34.4  million.  This
amount is comprised of $24.4 million for interest under our senior  subordinated
notes and $10.0 million for  repayment of term notes under our credit  facility.
Although  interest  will be paid under the credit  facility at least every three
months,  the amount of interest  is not  presently  determinable  given that the
credit  facility bears interest at variable  rates.  ECC has no additional  debt
service  requirements  in the next  twelve-month  period  since  interest on its
senior  discount  notes  accretes into the principal  balance of the notes until
March 2006.  However,  ECC has preferred  stock  dividend  requirements  of $9.0
million for the next  twelve-month  period.  The terms of ECC's  preferred stock
provide for a quarterly  dividend  payment of $.78125 per share on each  January
15,  April 15, July 15 and October 15. While Emmis had  sufficient  liquidity to
declare and pay the  dividends as they become due, it was not permitted to do so
for the April 15, 2002 payment  because  Emmis'  leverage ratio under the senior
discount  notes  indenture  exceeded 8:1 and its leverage ratio under the senior
subordinated notes indenture exceeded 7:1. ECC's board of directors set a record
date for the April 15, 2002 payment, but did not declare the dividend.  Instead,
a  wholly-owned,  unrestricted  subsidiary  of EOC made a payment of $.78125 per
share to each  preferred  shareholder of record.  This  subsidiary was permitted
under the senior discount notes and senior subordinated notes indentures to make
the payment to the preferred shareholders.  Currently,  Emmis meets its leverage
ratio requirements under both the senior discount notes indenture and the senior
subordinated notes indenture. On July 2, 2002, ECC's board of directors declared
the April 15, 2002 dividend,  as well as dividends  payable October 15, 2001 and
January 15, 2002,  and deemed the  obligation  to pay each dividend to have been
discharged by the subsidiary's  prior payment.  On April 5, 2003, ECC's board of
directors declared the April 15, 2003 dividend.

     At  April 3,  2003,  we had  $208.9  million  available  under  our  credit
facility,  less $1.4 million in outstanding letters of credit.  Emmis has agreed
to acquire,  for a purchase price of $105.2 million,  a controlling  interest of
50.1% in LBJS  Broadcasting  Company,  L.P.  LBJS owns radio  stations  KLBJ-AM,
KLBJ-FM,  KXMG-FM,  KROX-FM and KGSR-FM,  all in the Austin,  Texas metropolitan
area. The remaining  49.9% interest in LBJS will be held by Sinclair  Telecable,
Inc.  which will  contribute to LBJS a sixth Austin radio station,  KEYI-FM.  We
expect this  acquisition  to close in the second  quarter of our fiscal 2004. As

<PAGE>

part of our business strategy, we continually evaluate potential acquisitions of
radio and television stations, as well as publishing properties.  If we elect to
take advantage of future acquisition opportunities, we may incur additional debt
or issue additional  equity or debt securities,  depending on market  conditions
and  other  factors.  In  addition,  Emmis  will  have the  option,  but not the
obligation,  to purchase  Sinclair's  entire  interest in LBJS after a period of
approximately five years based on an 18-multiple of trailing 12-month cash flow.

     Emmis has explored the  possibility  of separating its radio and television
businesses into two publicly traded companies. However, in the current operating
environment,  Emmis  does not  intend  to  effectuate  the  separation  absent a
significant acquisition of either radio or television properties.

INTANGIBLES

     At February 28, 2003,  approximately  80% of our total assets  consisted of
intangible assets, such as FCC broadcast licenses, goodwill,  subscription lists
and  similar  assets,  the  value  of  which  depends   significantly  upon  the
operational  results of our businesses.  In the case of our radio and television
stations, we would not be able to operate the properties without the related FCC
license  for  each  property.  FCC  licenses  are  renewed  every  eight  years;
consequently,  we  continually  monitor  the  activities  of  our  stations  for
compliance with all regulatory requirements.  Historically,  all of our licenses
have been  renewed at the end of their  respective  eight-year  periods,  and we
expect that all FCC licenses will continue to be renewed in the future.

NEW ACCOUNTING PRONOUNCEMENTS

     In June 2001, the FASB issued SFAS No. 141, "Business  Combinations."  SFAS
No. 141 addresses financial  accounting and reporting for business  combinations
and supersedes  Accounting  Principle  Board ("APB")  Opinion No. 16,  "Business
Combinations" and SFAS No. 38, "Accounting for  Preacquisition  Contingencies of
Purchased  Enterprises." SFAS No. 141 is effective for all business combinations
initiated after June 30, 2001 and eliminates the  pooling-of-interest  method of
accounting for business combinations except for qualifying business combinations
that  were  initiated  prior to July 1,  2001.  SFAS No.  141 also  changes  the
criteria to recognize intangible assets apart from goodwill. The Company adopted
this Statement on July 1, 2001. The Company has  historically  used the purchase
method  to  account  for all  business  combinations  and the  adoption  of this
Statement did not have a material  impact on the Company's  financial  position,
cash flows or results of operations.

     In June 2001,  the FASB issued SFAS No. 142 "Goodwill and Other  Intangible
Assets" that requires  companies to cease amortizing  goodwill and certain other
indefinite-lived  intangible assets,  including broadcast  licenses.  Under SFAS
142,  goodwill and certain  indefinite-lived  intangibles  will not be amortized
into  results  of  operations,   but  instead  the  recorded  value  of  certain
indefinite-lived  intangibles  will be tested for  impairment at least  annually
with impairment being measured as the excess of the asset's carrying amount over
its fair value. Intangible assets that have finite useful lives will continue to
be amortized  over their useful lives and measured for  impairment in accordance
with SFAS 121. In connection  with the adoption of SFAS 142  effective  March 1,
2002, we recorded an impairment loss of $167.4 million, net of tax, reflected as
the  cumulative  effect of an accounting  change in the  accompanying  condensed
consolidated statements of operations.  The adoption of this accounting standard
reduced our  amortization  of goodwill and  intangibles by  approximately  $61.0
million in the year ended  February 28,  2003.  However,  our future  impairment
reviews may result in additional periodic write-downs.

     In June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
Retirement  Obligations" that applies to legal  obligations  associated with the
retirement  of a tangible  long-lived  asset that results from the  acquisition,
construction,  or development and/or the normal operation of a long-lived asset.
Under this  standard,  guidance is  provided  on  measuring  and  recording  the
liability.  Adoption of this Statement by the Company will be effective on March
1, 2003.  The Company does not believe that the adoption of this  Statement will
materially  impact the Company's  financial  position,  cash flows or results of
operations.

     Effective  March 1, 2002, the Company  adopted SFAS No. 144 "Accounting for
the  Impairment  or Disposal of  Long-Lived  Assets"  that  addresses  financial
accounting  and reporting for the  impairment or disposal of long-lived  assets.
While SFAS No. 144 supersedes  SFAS No. 121,  "Accounting  for the Impairment of
Long-Lived  Assets  and for  Long-Lived  Assets to Be  Disposed  Of," it removes
certain assets such as deferred tax assets,  goodwill and intangible  assets not
being  amortized  from its scope and  retains the  requirements  of SFAS No. 121
regarding the recognition of impairment  losses on other long-lived  assets held
for use. SFAS No. 144 also supersedes the accounting and reporting provisions of
APB Opinion No. 30, "Reporting the Results of  Operations-Reporting  the Effects
of  Disposal  of a  Segment  of  a  Business,  and  Extraordinary,  Unusual  and
Infrequently Occurring events and Transactions" for the disposal of a segment of
a  business.  However,  SFAS No. 144 retains  the  requirement  in Opinion 30 to

<PAGE>

report  separately  discontinued  operations  and extends  that  reporting  to a
component of an entity that either has been  disposed of (by sale,  abandonment,
or in a distribution  to owners) or is classified as held for sale.  Adoption of
this  statement  did not  have a  material  impact  on the  Company's  financial
position, cash flows or results of operations.

     In April 2002, the FASB issued SFAS No. 145,  "Rescission of Statements No.
4, 44, and 64,  Amendment of SFAS No. 13, and Technical  Corrections".  SFAS No.
145 rescinds  SFAS No. 4,  "Reporting  Gains and Losses from  Extinguishment  of
Debt", and an amendment of that Statement,  and SFAS No. 64, "Extinguishments of
Debt Made to Satisfy Sinking-Fund Requirements". SFAS No. 145 also rescinds SFAS
No. 44,  "Accounting  for Leases",  to eliminate  an  inconsistency  between the
required accounting for sale-leaseback  transactions and the required accounting
for certain lease  modifications  that have economic effects that are similar to
sale-leaseback   transactions.   SFAS  No.  145  also  amends   other   existing
authoritative  pronouncements  to make various  technical  corrections,  clarify
meanings, or describe their applicability under changed conditions.  Adoption of
this Statement by the Company will be effective on March 1, 2003. The effects of
this  pronouncement  will  result in future  gains and  losses  related  to debt
transactions to be classified in income from continuing operations. In addition,
we are required to  reclassify  all of the  extraordinary  items related to debt
transactions recorded in prior periods, including those recorded in fiscal 2003,
to income from continuing operations.

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal  Activities." SFAS No. 146 supersedes  Emerging
Issues Task Force Issue No. 94-3. SFAS No. 146 requires that the liability for a
cost  associated  with an exit or  disposal  activity  be  recognized  when  the
liability is incurred,  not at the date of an entity's  commitment to an exit or
disposal plan. The provisions of SFAS No. 146 are effective for exit or disposal
activities  initiated  after  December 31, 2002. The Company does not anticipate
that  the  adoption  of  SFAS  No.  146  will  have  a  material  impact  on its
consolidated financial position, results of operations or cash flows.

     As of December 2002, we adopted SFAS No. 148,  "Accounting  for Stock-Based
Compensation-Transaction and Disclosure, an Amendment of SFAS No. 123." SFAS No.
148 revises  the methods  permitted  by SFAS No. 123 of  measuring  compensation
expense for stock-based employee  compensation plans. We use the intrinsic value
method  prescribed in Accounting  Principles  Board Opinion No. 25, as permitted
under SFAS No. 123. Therefore, this change did not have a material effect on our
financial statements. SFAS No. 148 requires us to disclose pro forma information
related to  stock-based  compensation,  in  accordance  with SFAS No.  123, on a
quarterly  basis in addition to the current  annual  basis  disclosure.  We will
report the pro forma  information on an interim basis beginning with our May 31,
2003 Form 10-Q.

SEASONALITY

     Our results of  operations  are usually  subject to seasonal  fluctuations,
which result in higher second and third quarter  revenues and operating  income.
For our radio  operations,  this  seasonality is due to the younger  demographic
composition of many of our stations.  Advertisers  increase  spending during the
summer  months to target these  listeners.  In addition,  advertisers  generally
increase  spending  across all of our segments  during the months of October and
November,  which are part of our third quarter,  in  anticipation of the holiday
season.  Finally,  particularly  in our  television  operations,  revenues  from
political advertising tend to be higher in even numbered calendar years.

INFLATION

     The impact of inflation on our operations has not been significant to date.
However,  there can be no assurance  that a high rate of inflation in the future
would not have an adverse effect on our operating  results,  particularly  since
our senior bank debt is largely floating rate debt.

FORWARD-LOOKING STATEMENTS

     This report includes or incorporates  forward-looking statements within the
meaning of Section 21E of the Securities  Exchange Act of 1934, as amended.  You
can  identify  these  forward-looking  statements  by our use of  words  such as
"intend," "plan," "may," "will," "project," "estimate," "anticipate," "believe,"
"expect,"  "continue,"  "potential,"  "opportunity,"  and  similar  expressions,
whether in the negative or  affirmative.  We cannot  guarantee  that we actually
will achieve these plans,  intentions or expectations.  All statements regarding
our   expected   financial   position,   business   and   financing   plans  are
forward-looking statements.

     Actual results or events could differ materially from the plans, intentions
and expectations  disclosed in the  forward-looking  statements we make. We have
included important facts in various cautionary statements in this report that we

<PAGE>

believe could cause our actual results to differ materially from forward-looking
statements that we make. These include, but are not limited to, the following:

     o    material adverse changes in economic  conditions in the markets of our
          company;

     o    the  ability of our  stations  and  magazines  to  attract  and retain
          advertisers;

     o    loss of key personnel

     o    the ability of our  stations to attract  quality  programming  and our
          magazines to attract good editors, writers, and photographers;

     o    uncertainty  as to the ability of our  stations to increase or sustain
          audience  share for their  programs  and our  magazines to increase or
          sustain subscriber demand;

     o    competition from other media and the impact of significant competition
          for advertising revenues from other media;

     o    future regulatory actions and conditions in the operating areas of our
          company;

     o    the  necessity for  additional  capital  expenditures  and whether our
          programming  and  other  expenses  increase  at  a  rate  faster  than
          expected;

     o    financial  community  and rating agency  perceptions  of our business,
          operations  and  financial  condition  and the  industry  in  which we
          operate;

     o    the effects of terrorist attacks, political instability, war and other
          significant events;

     o    whether pending  transactions,  if any, are completed on the terms and
          at the times set forth, if at all;

     o    other risks and  uncertainties  inherent  in the radio and  television
          broadcasting and magazine publishing businesses.

The forward-looking statements do not reflect the potential impact of any future
acquisitions,  mergers or dispositions.  We undertake no obligation to update or
revise any forward-looking statements because of new information,  future events
or otherwise.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

GENERAL

     Market  risk  represents  the risk of loss that may  impact  the  financial
position, results of operations or cash flows of Emmis due to adverse changes in
financial and commodity market prices and rates. Emmis is exposed to market risk
from changes in domestic and international interest rates (i.e. prime and LIBOR)
and foreign  currency  exchange  rates.  To manage  interest rate exposure Emmis
periodically enters into interest rate derivative agreements. Emmis does not use
financial  instruments  for  trading  and  is  not  a  party  to  any  leveraged
derivatives.

     On June 15, 1998, the FASB issued SFAS No. 133,  "Accounting for Derivative
Instruments and Hedging Activities," as amended in June of 2000 by SFAS No. 138,
"Accounting   for  Derivative   Instruments  and  Hedging   Activities."   These
statements,  which  were  effective  for  Emmis  on  March  1,  2001,  establish
accounting and reporting standards for derivative instruments, including certain
derivative  instruments  embedded in other contracts.  These statements  require
that every  derivative  instrument be recorded in the balance sheet as either an
asset or a liability  measured  at its fair value.  Changes in the fair value of
derivatives are to be recorded each period in earnings or comprehensive  income,
depending on whether the  derivative  is  designated  and effective as part of a
hedged  transaction,  and on the type of hedge  transaction.  Gains or losses on
derivative  instruments  reported  in the  other  comprehensive  income  must be
reclassified  as earnings in the period in which  earnings  are  affected by the
underlying  hedged  item,  and the  ineffective  portion of all  hedges  must be
recognized  in  earnings  in the  current  period.  These  standards  result  in
additional  volatility  in  reported  assets,  liabilities,  earnings  and other
comprehensive income.

     SFAS  No.  133  requires  that  as of the  date  of  initial  adoption  the
difference  between the fair value of the derivative  instruments to be recorded
on the balance sheet and the previous  carrying  amount of those  derivatives be
reported in net income or other  comprehensive  income,  as appropriate,  as the
cumulative effect of a change in accounting  principle in accordance with APB 20
"Accounting Changes."

     On March 1, 2001, Emmis recorded the effect of the adoption of SFAS No. 133
which  resulted in an  immaterial  impact to the results of  operations  and the
financial position of Emmis.
<PAGE>

     SFAS No. 133 further requires that the fair value and effectiveness of each
hedging  instrument must be measured  quarterly.  The result of each measurement
could  result  in   fluctuations   in  reported   assets,   liabilities,   other
comprehensive   income  and  earnings  as  these   changes  in  fair  value  and
effectiveness are recorded to the financial statements.

INTEREST RATES

     At February  28,  2003,  the entire  outstanding  balance  under our credit
facility, approximately 47% of EOC's total outstanding debt (credit facility and
senior  subordinated  debt) and 40% of Emmis' total outstanding debt (EOC's debt
plus our senior  discount  notes),  bears  interest  at  variable  rates.  Emmis
currently  hedges a portion  of its  outstanding  debt with  interest  rate swap
arrangements that effectively set the credit facility's  underlying base rate at
a weighted  average rate of 4.76% on the  three-month  LIBOR for  agreements  in
place as of February 28, 2003.  The credit  facility  requires EOC to have fixed
interest  rates for a two year  period on at least 50% of its total  outstanding
debt, as defined (including the senior  subordinated  debt). After the first two
years,  this ratio of fixed to floating  rate debt must be  maintained  if EOC's
total leverage  ratio,  as defined,  is greater than 6:1 at any quarter end. The
notional  amount of the  interest  rate swap  agreements  at  February  28, 2003
totaled $230.0 million, and the agreements expire at various dates beginning May
8, 2003 to February 8, 2004.

     Based on amounts  outstanding at February 28, 2003, if the interest rate on
our variable debt, including the effect of interest rate swaps, were to increase
by 1.0%,  our annual  interest  expense  would be higher by  approximately  $4.8
million.

FOREIGN CURRENCY

     Emmis owns a 59.5% interest in a Hungarian subsidiary which is consolidated
in the  accompanying  financial  statements.  This  subsidiary's  operations are
measured in its local currency (forint). Emmis has a natural hedge since some of
the  subsidiary's  long-term  obligations are denominated in Hungarian  forints.
Emmis owns a 75% interest in an Argentinean  subsidiary which is consolidated in
the accompanying financial statements. This subsidiary's operations are measured
in its local  currency  (peso),  which until January 2002,  was tied to the U.S.
dollar through the Argentine government's  convertibility plan. In January 2002,
the Argentine  government allowed the peso to devalue and trade against the U.S.
dollar  independently.  While Emmis  management  cannot  predict the most likely
average or end-of-period peso to dollar, or forint to dollar, exchange rates for
calendar  2003, we believe any further  devaluation  of the forint or peso would
have an immaterial  effect on our financial  statements taken as a whole, as the
Hungarian and Argentine  stations accounted for approximately 2% of Emmis' total
revenues  and  approximately  1% of Emmis'  total assets as of, and for the year
ended, February 28, 2003.

     At February 28, 2003,  the  Hungarian  subsidiary  had $1.3 million of U.S.
dollar  denominated  loans  outstanding.  No amounts were repaid under the loans
during fiscal 2003. The Argentinean  subsidiary had no U.S.  dollar  denominated
loans outstanding during fiscal 2003 or at February 28, 2003.

     Emmis  maintains  no  derivative  instruments  to mitigate  the exposure to
foreign currency  translation  and/or transaction risk.  However,  this does not
preclude the adoption of specific hedging strategies in the future.




<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                FOR THE YEARS ENDED FEBRUARY 28,
                                                             2001             2002             2003
                                                             ----             ----             ----

<S>                                                       <C>              <C>              <C>
GROSS REVENUES                                            $ 552,800        $ 620,456        $ 646,157

LESS:  AGENCY COMMISSIONS                                    79,455           80,634           83,794
                                                             ------           ------           ------

NET REVENUES                                                473,345          539,822          562,363
OPERATING EXPENSES:
    Station operating expenses, excluding
       noncash compensation                                 299,132          354,157          349,251
    Corporate expenses, excluding
       noncash compensation                                  17,601           20,283           21,359
    Time brokerage fees                                       7,344              479                -
    Depreciation and amortization                            74,018          100,258           43,370
    Noncash compensation                                      5,400            9,095           22,528
    Restructuring fees                                        2,057              768                -
    Impairment loss and other                                 2,000           10,672                -
                                                            -------          -------          -------
       Total operating expenses                             407,552          495,712          436,508
OPERATING INCOME                                             65,793           44,110          125,855
                                                             ------           ------          -------

OTHER INCOME (EXPENSE):
    Interest expense                                        (72,444)        (129,100)        (103,835)
    Gain on sale of assets                                        -                -            9,313
    Gain (loss) in unconsolidated affiliates                 (1,360)          (5,003)          (4,544)
    Other income, net                                        39,397            1,346              525
                                                             ------            -----              ---
       Total other income (expense)                         (34,407)        (132,757)         (98,541)

INCOME (LOSS) BEFORE INCOME TAXES
    EXTRAORDINARY LOSS AND ACCOUNTING CHANGE                 31,386          (88,647)          27,314
PROVISION (BENEFIT) FOR INCOME TAXES                         17,650          (25,623)          13,265
                                                             ------          -------           ------
INCOME(LOSS) BEFORE EXTRAORDINARY LOSS
    AND ACCOUTNING CHANGE                                    13,736          (63,024)          14,049
EXTRAORDINARY LOSS, NET OF TAX
    OF $664 IN 2002 AND $2,389 IN 2003                            -           (1,084)         (11,117)
CUMULATIVE EFFECT OF ACCOUNTING
     CHANGE, NET OF TAX OF $102,600                               -                -         (167,400)
                                                             ------          -------         --------
NET INCOME (LOSS)                                            13,736          (64,108)        (164,468)
PREFERRED STOCK DIVIDENDS                                     8,984            8,984            8,984
                                                             ------          -------         --------
NET INCOME (LOSS) AVAILABLE TO COMMON
    SHAREHOLDERS                                            $ 4,752        $ (73,092)      $ (173,452)
                                                            =======        =========       ==========

BASIC NET INCOME (LOSS) AVAILABLE TO
    COMMON SHAREHOLDERS:
    Before accounting change and extraordinary loss          $ 0.10          $ (1.52)          $ 0.10
    Extraordinary item, net of tax                                -            (0.02)           (0.21)
    Cumulative effect of accounting change, net of tax            -                -            (3.16)
    Net income (loss) available to common                    ------          -------          -------
       shareholders                                          $ 0.10          $ (1.54)         $ (3.27)
                                                             ======          =======          =======

DILUTED NET INCOME (LOSS) AVAILABLE TO
    COMMON SHAREHOLDERS:
    Before accounting change and extraordinary loss          $ 0.10          $ (1.52)          $ 0.10
    Extraordinary item, net of tax                                -            (0.02)           (0.21)
    Cumulative effect of accounting change, net of tax            -                -            (3.16)
    Net income (loss) available to common                    ------          -------          -------
       shareholders                                          $ 0.10          $ (1.54)         $ (3.27)
                                                             ======          =======          =======
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these statements.

     In the years ended February 28, 2001,  2002, and 2003,  $4.4 million,  $8.3
million,  and  $19.0  million  respectively,  of our  noncash  compensation  was
attributable to our stations, while $1.0 million, $0.8 million, and $3.5 million
was attributable to corporate.


<PAGE>


                EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                                               FEBRUARY 28,
                                                            2002          2003
                                                            ----          ----
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                 $ 6,362     $ 16,079
  Accounts receivable, net of allowance for doubtful
     accounts of $2,800 and $3,240, respectively             95,240      102,345
  Current portion of TV program rights                        9,837       11,309
  Prepaid expenses                                           14,847       15,596
  Other                                                      13,820       14,352
  Assets held for sale                                      123,416            -
                                                            -------      -------
                    Total current assets                    263,522      159,681
                                                            -------      -------

PROPERTY AND EQUIPMENT:
  Land and buildings                                         88,209       93,660
  Leasehold improvements                                     12,341       14,591
  Broadcasting equipment                                    151,496      172,489
  Office equipment and automobiles                           49,160       54,082
  Construction in progress                                   16,735        7,111
                                                             ------        -----
                                                            317,941      341,933
  Less-Accumulated depreciation and amortization             86,802      118,503
                                                             ------      -------
                     Total property and equipment, net      231,139      223,430
                                                            -------      -------

INTANGIBLE ASSETS:
  Indefinite lived intangibles                            1,743,235    1,508,886
  Goodwill                                                  175,132      138,986
  Other intangibles                                          63,677       64,189
                                                             ------       ------
                                                          1,982,044    1,712,061
  Less-Accumulated amortization                              28,713       35,328
                                                             ------       ------
                    Total intangible assets, net          1,953,331    1,676,733
                                                          ---------    ---------

OTHER ASSETS:
  Deferred debt issuance costs, net of accumulated
     amortization of $12,227 and $11,482, repectively        37,745       29,260
  TV program rights, net of current portion                   8,818       10,416
  Investments                                                12,315        9,261
  Deposits and other                                          3,199        7,632
                                                              -----        -----
     Total other assets, net                                 62,077       56,569
                                                             ------       ------

                    Total assets                        $ 2,510,069   $2,116,413
                                                        ===========   ==========



The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.



<PAGE>


                EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS - (CONTINUED)
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                        <TABLE>
<CAPTION>
                                                                               FEBRUARY 28,
                                                                               ------------
                                                                            2002          2003
                                                                            ----          ----

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
<S>                                                                      <C>            <C>
    Accounts payable                                                      $ 38,995     $ 39,526
    Current maturities of long-term debt                                     7,933       14,912
    Current portion of TV program rights payable                            27,507       27,424
    Accrued salaries and commissions                                         7,852       14,247
    Accrued interest                                                        14,068       11,641
    Deferred revenue                                                        16,392       15,805
    Other                                                                    7,531        8,102
    Credit facility debt to be repaid with proceeds
        of assets held for sale                                            135,000            -
    Liabilities associated with assets held for sale                            63            -
                                                                           -------      -------
                      Total current liabilities                            255,341      131,657

CREDIT FACILITY AND SENIOR SUBORDINATED
    DEBT, NET OF CURRENT PORTION                                         1,117,000      996,945
SENIOR DISCOUNT NOTES                                                      226,507      197,844
OTHER LONG-TERM DEBT, NET OF CURRENT PORTION                                 6,949       13,087
TV PROGRAM RIGHTS PAYABLE, NET OF CURRENT PORTION                           40,551       32,044
OTHER NONCURRENT LIABILITIES                                                26,966       17,786
DEFERRED INCOME TAXES                                                      101,198       22,345
                                                                           -------      -------
                      Total liabilities                                  1,774,512    1,411,708
                                                                         ---------    ---------

COMMITMENTS AND CONTINGENCIES (NOTE 9)

SHAREHOLDERS' EQUITY:

    Series A cumulative convertible preferred stock, $0.01 par value;
        $50.00 liquidation preference; authorized 10,000,000 shares;
        issued and outstanding 2,875,000 shares in 2002 and 2003                29           29
    Class A common stock, $0.01 par value; authorized 170,000,000
        shares; issued and outstanding 42,761,299 shares and
        48,874,017 shares in 2002 and 2003, respectively                       428          489
    Class B common stock, $0.01 par value; authorized 30,000,000
        shares; issued and outstanding 5,250,127 shares and
        5,011,348 shares in 2002 and 2003, respectively                         53           50
    Additional paid-in capital                                             843,254      990,770
    Accumulated deficit                                                    (95,822)    (269,274)
    Accumulated other comprehensive income                                 (12,385)     (17,359)
                                                                         ---------    ---------
                      Total shareholders' equity                           735,557      704,705
                                                                         ---------    ---------
                      Total liabilities and shareholders' equity       $ 2,510,069  $ 2,116,413
                                                                       ===========  ===========
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.



<PAGE>


                EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                   FOR THE THREE YEARS ENDED FEBRUARY 28, 2003
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                            Class A                   Class B                    Series A
                                                          Common Stock              Common Stock              Preferred Stock
                                                          ------------              ------------              ---------------
                                                      Shares        Amount       Shares        Amount        Shares       Amount
                                                      ------        ------       ------        ------        ------       ------
<S>                                               <C>                <C>      <C>                <C>      <C>               <C>
BALANCE, FEBRUARY 29, 2000                          41,232,811         $ 412    4,738,582          $ 47     2,875,000         $ 29

Issuance of Class A Common Stock in
     exchange for Class B Common Stock                  17,875             -      (17,875)            -             -            -
Exercise of stock options and
     related income tax benefits                       482,991             5      509,689             5             -            -
Issuance of Class A Common Stock
     to profit sharing plan                             47,281             1            -             -             -            -
Issuance of Class A Common Stock to employees
     and officers and related income tax benefits       82,688             1            -             -             -            -
Sale of Class A common stock
     to employees through ESPP                          36,669             -            -             -             -            -
Preferred stock dividends paid
                                                             -             -            -             -             -            -
Comprehensive Income:
Net income (loss)                                            -             -            -             -             -            -
Cumulative translation adjustment                            -             -            -             -             -            -
Total comprehensive income                                   -             -            -             -             -            -
                                                    ----------           ---    ---------            --     ---------           --
BALANCE, FEBRUARY 28, 2001                          41,900,315           419    5,230,396            52     2,875,000           29
                                                    ----------           ---    ---------            --     ---------           --

Issuance of Class A Common Stock in
     exchange for Class B Common Stock                       -             -            -             -             -            -
Exercise of stock options and
     related income tax benefits                       314,258             3            -             -             -            -
Issuance of Class A Common Stock
     to profit sharing plan                                  -             -            -             -             -            -
Issuance of Class A Common Stock to employees
     and officers and related income tax benefits      520,579             6       19,731             1             -            -
Sale of Class A Common Stock
     to employees through ESPP                          26,147             -            -             -             -            -
Preferred stock dividends paid                               -             -            -             -             -            -

Comprehensive Income:
Net income (loss)                                            -             -            -             -             -            -
Cumulative translation adjustment                            -             -            -             -             -            -
Net unrealized gain (loss) on hedged derivatives             -             -            -             -             -            -
Total comprehensive income                                   -             -            -             -             -            -
                                                    ----------           ---    ---------            --     ---------           --
BALANCE, FEBRUARY 28, 2002                          42,761,299           428    5,250,127            53     2,875,000           29
                                                    ----------           ---    ---------            --     ---------           --

Issuance of Class A Common Stock in
     exchange for Class B Common Stock                 300,000             3     (300,000)           (3)            -            -
Issuance of common stock to employees
     and related income tax benefits                 1,212,718            12       61,221             -             -            -
Sale of Class A Common Stock
     via secondary offering                          4,600,000            46            -             -             -            -
Preferred stock dividends paid                               -             -            -             -             -            -

Comprehensive Income:
Net income (loss)                                            -             -            -             -             -            -
Cumulative translation adjustment                            -             -            -             -             -            -
Net unrealized gain (loss) on hedged derivatives             -             -            -             -             -            -
Total comprehensive income                                   -             -            -             -             -            -
                                                    ----------           ---    ---------            --     ---------           --
BALANCE FEBRUARY 28, 2003                           48,874,017         $ 489    5,011,348          $ 50     2,875,000         $ 29
                                                    ==========           ===    =========            ==     =========           ==

</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these statements.

<PAGE>


                EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - (CONTINUED)
                   FOR THE THREE YEARS ENDED FEBRUARY 28, 2003
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


                                                <TABLE>
<CAPTION>
                                                                                        Accumulated
                                                     Additional                            Other            Total
                                                      Paid-in       Accumulated         Comprehensive   Shareholders'
                                                      Capital         Deficit              Income           Equity
                                                      -------         -------              ------           ------
<S>                                                <C>             <C>                 <C>             <C>
BALANCE, FEBRUARY 29, 2000                           $ 804,820       $ (27,482)          $ (1,459)       $ 776,367

Issuance of Class A Common Stock in
     exchange for Class B Common Stock                       -               -                  -                -
Exercise of stock options and
     related income tax benefits                        18,707               -                  -           18,717
Issuance of Class A Common Stock
     to profit sharing plan                              1,250               -                  -            1,251
Issuance of Class A Common Stock to employees
     and officers and related income tax benefits        4,586               -                  -            4,587
Sale of Class A common stock
     to employees through ESPP                             936               -                  -              936
Preferred stock dividends paid                               -          (8,984)                 -           (8,984)

Comprehensive Income:
Net income (loss)                                            -          13,736                  -
Cumulative translation adjustment                            -               -                861
Total comprehensive income                                   -               -                  -           14,597
                                                     ---------       ---------             ------        ---------
BALANCE, FEBRUARY 28, 2001                           $ 830,299       $ (22,730)            $ (598)       $ 807,471
                                                     ---------       ---------             ------        ---------

Issuance of Class A Common Stock in
     exchange for Class B Common Stock                       -               -                  -                -
Exercise of stock options and
     related income tax benefits                         3,610               -                  -            3,613
Issuance of Class A Common Stock
     to profit sharing plan                                  -               -                  -                -
Issuance of Class A Common Stock to employees
     and officers and related income tax benefits        8,770               -                  -            8,777
Sale of Class A common stock
     to employees through ESPP                             575               -                  -              575
Preferred stock dividends paid                               -          (8,984)                 -           (8,984)

Comprehensive Income:
Net income (loss)                                            -         (64,108)                 -
Cumulative translation adjustment                            -               -             (6,303)
Net unrealized gain (loss) on hedged derivatives             -               -             (5,484)
Total comprehensive income                                   -               -                  -          (75,895)
                                                     ---------       ---------             ------        ---------
BALANCE, FEBRUARY 28, 2002                           $ 843,254       $ (95,822)         $ (12,385)       $ 735,557
                                                     ---------       ---------             ------        ---------

Issuance of Class A Common Stock in
     exchange for Class B Common Stock                       -               -                  -                -
Issuance of common stock to employees
     and related income tax benefits                    27,323               -                  -           27,335
Sale of Class A Common Stock
     via secondary offering                            120,193               -                  -          120,239
Preferred stock dividends paid                               -          (8,984)                 -           (8,984)

Comprehensive Income:
Net income (loss)                                            -        (164,468)                 -
Cumulative translation adjustment                            -               -             (8,079)
Net unrealized gain (loss) on hedged derivatives             -               -              3,105
Total comprehensive income                                   -               -                  -         (169,442)
                                                     ---------       ---------             ------        ---------
BALANCE, FEBRUARY 28, 2003                           $ 990,770      $ (269,274)         $ (17,359)       $ 704,705
                                                     =========      ==========          =========        =========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these statements.


<PAGE>


                EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                            FOR THE YEARS ENDED FEBRUARY 28,
                                                                          2001           2002             2003
                                                                          ----           ----             ----
OPERATING ACTIVITIES:
<S>                                                                  <C>               <C>              <C>
Net income (loss)                                                      $ 13,736       $ (64,108)      $ (164,468)
     Adjustments to reconcile net income (loss)
        to net cash provided by operating activities -
           Extraordinary item                                                 -           1,084           11,117
           Cumulative effect of accounting change                             -               -          167,400
           Depreciation and amortization                                 94,454         124,335           68,193
           Accretion of interest on senior discount note
              including amortization of related debt costs                    -          24,998           25,777
           Provision for bad debts                                        3,713           4,005            4,102
           Provision (benefit) for deferred income taxes                 15,810         (25,623)          13,265
           Noncash compensation                                           5,400           9,095           22,528
           Gain on sale of assets                                             -               -           (9,313)
           Gain on exchange of assets                                   (22,000)              -                -
           Impairment of asset                                                -           9,063                -
           Tax benefits of exercise of stock options                     10,859             999              958
           Other                                                          1,464          (5,928)          (8,079)
     Changes in assets and liabilities -
           Accounts receivable                                           (9,316)         (2,118)         (11,207)
           Prepaid expenses and other current assets                    (24,627)          5,127           (3,392)
           Other assets                                                  12,099          (5,953)          (4,181)
           Accounts payable and accrued liabilities                      15,341          (2,709)             804
           Deferred revenue                                                 569            (963)            (587)
           Other liabilties                                             (19,772)         (1,927)         (17,768)
                                                                        -------          ------          -------
              Net cash provided by operating activities                  97,730          69,377           95,149
                                                                         ------          ------           ------

INVESTING ACTIVITIES:
     Purchases of property and equipment                                (26,225)        (30,135)         (30,549)
     Disposal of property and equipment                                       -           1,719            2,354
     Cash paid for acquisitions                                      (1,060,681)       (140,746)               -
     Proceeds from sale of assets, net                                        -               -          135,500
     Deposits on acquisitions and other                                 (23,849)         (5,943)          (1,004)
                                                                        -------          ------           ------
              Net cash provided by (used in) investing activities    (1,110,755)       (175,105)         106,301
                                                                     ----------        --------          -------

FINANCING ACTIVITIES:
     Payments on long-term debt                                      (1,051,549)       (133,000)        (313,525)
     Proceeds from long-term debt                                     2,128,388           5,000           15,000
     Proceeds from the issuance of the Company's
        Class A Common Stock, net of transaction costs                        -               -          120,239
     Purchase of Class A Common Stock                                         -               -           (1,937)
     Proceeds from senior discount notes offering                             -         202,612
     Premium paid to redeem senior discount notes                             -               -           (6,678)
     Proceeds from exercise of stock options
        and employee stock purchases                                      8,794           3,189            6,906
     Payments for debt related costs                                    (21,095)        (16,626)          (2,754)
     Preferred stock dividends                                           (8,984)         (8,984)          (8,984)
                                                                         ------          ------           ------
              Net cash provided by (used in) financing activities     1,055,554          52,191         (191,733)
                                                                      ---------          ------         --------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                         42,529         (53,537)           9,717

CASH AND CASH EQUIVALENTS:
     Beginning of period                                                 17,370          59,899            6,362
                                                                         ------          ------            -----
     End of period                                                     $ 59,899         $ 6,362         $ 16,079
                                                                       ========         =======         ========

</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these statements.


<PAGE>


                EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)
                                              FOR THE YEARS ENDED FEBRUARY 28,
                                                  2001         2002        2003
                                                  ----         ----        ----
SUPPLEMENTAL DISCLOSURES:
  Cash paid for-
     Interest                                  $ 58,362     $ 99,824    $ 77,090
     Income taxes                                   550        1,281         887

ACQUISITION OF LOS ANGELES MAGAZINE:
  Fair value of assets aquired                 $ 39,520
  Cash paid                                      36,827
                                                 ------
  Liabilities recorded                         $  2,693
                                                =======

ACQUISITION OF KKFR-FM AND KXPK-FM:
  Fair value of assets aquired                 $110,210
  Cash paid                                     109,052
                                                 ------
  Liabilities recorded                         $  1,158
                                                =======

ACQUISITION OF TELEVISION PROPERTIES
        FROM LEE ENTERPRISES, INC.:
  Fair value of assets aquired                 $633,639
  Cash paid                                     582,994
                                                -------
  Liabilities recorded                         $ 50,645
                                               ========

ACQUISITION OF KIHT-FM, KFTK-FM, KPNT-FM
        WVRV-FM, WIL-FM, AND WRTH-AM:
  Fair value of assets aquired                 $230,891
  Cash paid                                     230,891
                                                -------
  Liabilities recorded                         $      -
                                              =========


EXCHANGE OF ASSETS FOR KZLA-FM:
  Fair value of assets aquired                 $185,000
  Basis in assets echanged                      163,000
  Gain on exchange of assets                     22,000
  Cash paid                                           -
                                                -------
  Liabilities recorded                         $      -
                                              =========

ACQUISITION OF KALC-FM:
  Fair value of assets aquired                 $100,917
  Cash paid                                     100,917
                                                -------
  Liabilities recorded                         $      -
                                              =========

ACQUISITION OF KKLT-FM, KTAR-AM, AND KMVP-AM:
  Fair value of assets aquired                             $ 160,746
  Cash paid, net of deposit                                  140,746
  Deposit paid in June 2000                                   20,000
                       ----                                   ------
  Liabilities recorded                                     $       -
                                                           =========


The accompanying notes to consolidated financial statements are an integral part
of these statements.


<PAGE>


                    EMMIS OPERATING COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)

                                                FOR THE YEARS ENDED FEBRUARY 28,
                                                2001        2002         2003
                                                ----        ----         ----

GROSS REVENUES                              $ 552,800    $ 620,456    $ 646,157

LESS:  AGENCY COMMISSIONS                     79,455       80,634       83,794
                                              ------       ------       ------

NET REVENUES                                  473,345      539,822      562,363
OPERATING EXPENSES:
    Station operating expenses, excluding
      noncash compensation                    299,132      354,157      349,251
    Corporate expenses, excluding
      noncash compensation                     17,601       20,283       21,359
    Time brokerage fees                         7,344          479            -
    Depreciation and amortization              74,018      100,258       43,370
    Noncash compensation                        5,400        9,095       22,528
    Restructuring fees                          2,057          768            -
    Impairment loss and other                   2,000       10,672            -
                                              -------      -------      -------
      Total operating expenses                407,552      495,712      436,508
OPERATING INCOME                               65,793       44,110      125,855
                                               ------       ------      -------

OTHER INCOME (EXPENSE):
    Interest expense                          (72,444)    (104,102)     (78,058)
    Gain on sale of assets                          -            -        9,313
    Gain (loss) in unconsolidated affiliates   (1,360)      (5,003)      (4,544)
    Other income, net                          39,397          360          524
                                               ------          ---          ---
      Total other income (expense)            (34,407)    (108,745)     (72,765)
                                              -------     --------      -------

INCOME (LOSS) BEFORE INCOME TAXES
    EXTRAORDINARY LOSS AND ACCOUNTING CHANGE   31,386      (64,635)      53,090
PROVISION (BENEFIT) FOR INCOME TAXES           17,650      (17,833)      22,366
                                               ------      -------       ------
INCOME(LOSS) BEFORE EXTRAORDINARY LOSS
    AND ACCOUTNING CHANGE                      13,736      (46,802)      30,724
EXTRAORDINARY LOSS, NET OF TAX
    OF $664 IN 2002 AND $1,555 IN 2003              -       (1,084)      (2,889)
CUMULATIVE EFFECT OF ACCOUNTING
     CHANGE, NET OF TAX OF $102,600                 -            -     (167,400)
                                             --------    ---------   ----------
NET INCOME (LOSS)                            $ 13,736    $ (47,886)  $ (139,565)
                                             ========    =========   ==========



The accompanying notes to consolidated financial statements are an integral part
of these statements.

     In the years ended February 28, 2001,  2002, and 2003,  $4.4 million,  $8.3
million,  and  $19.0  million  respectively,  of our  noncash  compensation  was
attributable to our stations, while $1.0 million, $0.8 million, and $3.5 million
was attributable to corporate.


<PAGE>




                    EMMIS OPERATING COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

                                                                FEBRUARY 28,
                                                             2002         2003
                                                             ----         ----
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                $ 6,362     $ 16,079
   Accounts receivable, net of allowance for doubtful
     accounts of $2,800 and $3,240, respectively             95,240      102,345
   Current portion of TV program rights                       9,837       11,309
   Prepaid expenses                                          14,847       15,596
   Other                                                     13,820       14,352
   Assets held for sale                                     123,416            -
                                                            -------      -------
                  Total current assets                      263,522      159,681
                                                            -------      -------

PROPERTY AND EQUIPMENT:
   Land and buildings                                        88,209       93,660
   Leasehold improvements                                    12,341       14,591
   Broadcasting equipment                                   151,496      172,489
   Office equipment and automobiles                          49,160       54,082
   Construction in progress                                  16,735        7,111
                                                            -------      -------
                                                            317,941      341,933
   Less-Accumulated depreciation and amortization            86,802      118,503
                                                            -------      -------
                  Total property and equipment, net         231,139      223,430
                                                            -------      -------

INTANGIBLE ASSETS:
   Indefinite lived intangibles                           1,743,235    1,508,886
   Goodwill                                                 175,132      138,986
   Other intangibles                                         63,677       64,189
                                                            -------      -------
                                                          1,982,044    1,712,061
   Less-Accumulated amortization                             28,713       35,328
                                                            -------      -------
                  Total intangible assets, net            1,953,331    1,676,733
                                                          ---------    ---------

OTHER ASSETS:
   Deferred debt issuance costs, net of accumulated
     amortization of $11,122 and $9,704, repectively         26,815       21,731
   TV program rights, net of current portion                  8,818       10,416
   Investments                                               12,315        9,261
   Deposits and other                                         3,199        7,632
                                                          ---------    ---------
     Total other assets, net                                 51,147       49,040
                                                          ---------    ---------

                  Total assets                          $ 2,499,139   $2,108,884
                                                        ===========   ==========

The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.



<PAGE>


                    EMMIS OPERATING COMPANY AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS - (CONTINUED)
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                                       FEBRUARY 28,
                                                                    2002           2003
                                                                    ----           ----
LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES:
<S>                                                              <C>            <C>
   Accounts payable                                               $ 38,995     $ 39,526
   Current maturities of long-term debt                              7,933       14,912
   Current portion of TV program rights payable                     27,507       27,424
   Accrued salaries and commissions                                  7,852       14,247
   Accrued interest                                                 14,068       11,641
   Deferred revenue                                                 16,392       15,805
   Other                                                             6,408        6,979
   Credit facility debt to be repaid with proceeds
    of assets held for sale                                        135,000            -
   Liabilities associated with assets held for sale                     63            -
                                                                   -------      -------
                  Total current liabilities                        254,218      130,534

CREDIT FACILITY AND SENIOR SUBORDINATED
   DEBT, NET OF CURRENT PORTION                                  1,117,000      996,945
OTHER LONG-TERM DEBT, NET OF CURRENT PORTION                         6,949       13,087
TV PROGRAM RIGHTS PAYABLE, NET OF CURRENT PORTION                   40,551       32,044
OTHER NONCURRENT LIABILITIES                                        26,966       17,786
DEFERRED INCOME TAXES                                              108,988       40,070
                                                                   -------      -------
                  Total liabilities                              1,554,672    1,230,466
                                                                 ---------    ---------

COMMITMENTS AND CONTINGENCIES (NOTE 9)

SHAREHOLDER'S EQUITY:

   Common stock, no par value; authorized, issued and
    outstanding 1,000 shares at February 28, 2002 and 2003       1,027,221    1,027,221
   Additional paid-in capital                                        8,108       95,582
   Accumulated deficit                                             (78,477)    (227,026)
   Accumulated other comprehensive income                          (12,385)     (17,359)
                                                                   -------      -------
                  Total shareholder's equity                       944,467      878,418
                                                                   -------      -------

                  Total liabilities and shareholder's equity   $ 2,499,139  $ 2,108,884
                                                               ===========  ===========

</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these balance sheets.



<PAGE>


                    EMMIS OPERATING COMPANY AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
                   FOR THE THREE-YEARS ENDED FEBRUARY 28, 2003
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                             Common Stock
                                          -------------------
                                                                                               Accumulated
                                                                     Additional                     Other        Total
                                         Shares                       Paid-in     Accumulated    Comprehensive  Shareholder's
                                        Outstanding     Amount        Capital       Deficit         Income       Equity
                                        -----------     ------        -------       -------         ------       ------
<S>                                       <C>        <C>              <C>         <C>            <C>           <C>
BALANCE, FEBRUARY 29, 2000                   1000      $ 805,308          $ -     $ (27,482)      $ (1,459)    $ 776,367

Distrubutions to parent                         -              -            -        (8,984)             -        (8,984)
Contributions from parent                       -         25,491            -             -              -        25,491

Comprehensive Income:
Net income (loss)                               -              -            -        13,736              -
Cumulative translation adjustment               -              -            -             -            861
Total comprehensive income                      -              -            -             -              -        14,597
                                            -----      ---------        -----       -------        -------       -------
BALANCE, FEBRUARY 28, 2001                  1,000        830,799            -       (22,730)          (598)      807,471
                                            -----      ---------        -----       -------        -------       -------

Accrued dividend at reorganization              -              -            -         1,123              -         1,123
Distrubutions to parent                         -              -            -        (8,984)             -        (8,984)
Contributions from parent                       -        196,422        8,108             -              -       204,530

Comprehensive Income:
Net income (loss)                               -              -            -       (47,886)             -
Cumulative translation adjustment               -              -            -             -         (6,303)
Net unrealized loss on hedged derivatives       -              -            -             -         (5,484)
Total comprehensive income                      -              -            -             -              -       (59,673)
                                            -----      ---------        -----       -------        -------       -------
BALANCE, FEBRUARY 28, 2002                  1,000      1,027,221        8,108       (78,477)       (12,385)      944,467
                                            -----      ---------        -----       -------        -------       -------

Distrubutions to parent                         -              -            -        (8,984)             -        (8,984)
Contributions from parent                       -                      87,474             -              -        87,474

Comprehensive Income:
Net income (loss)                               -              -            -      (139,565)             -
Cumulative translation adjustment               -              -            -             -         (8,079)
Net unrealized loss on hedged derivatives       -              -            -             -          3,105
Total comprehensive income                      -              -            -             -              -      (144,539)
                                            -----      ---------        -----       -------        -------       -------
BALANCE, FEBRUARY 28, 2003                  1,000     $ 1,027,221    $ 95,582    $ (227,026)     $ (17,359)    $ 878,418
                                            =====     ===========    ========    ==========      =========     =========

</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these statements.



<PAGE>



                    EMMIS OPERATING COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                        FOR THE YEARS ENDED FEBRUARY 28,
                                                                     2001             2002            2003
                                                                     ----             ----            ----
OPERATING ACTIVITIES:
<S>                                                                  <C>             <C>            <C>
   Net income (loss)                                                 $ 13,736        $ (47,886)     $ (139,565)
   Adjustments to reconcile net income (loss)
    to net cash provided by operating activities -
      Extraordinary item                                                    -            1,084           2,889
      Cumulative effect of accounting change                                -                -         167,400
      Depreciation and amortization                                    94,454          124,335          68,193
      Provision for bad debts                                           3,713            4,005           4,102
      Provision (benefit) for deferred income taxes                    15,810          (17,833)         22,366
      Noncash compensation                                              5,400            9,095          22,528
      Gain on sale of assets                                                -                -          (9,313)
      Gain on exchange of assets                                      (22,000)               -               -
      Impairment of asset                                                   -            9,063               -
      Other                                                             1,464           (5,928)         (8,079)
   Changes in assets and liabilities -
      Accounts receivable                                              (9,316)          (2,118)        (11,207)
      Prepaid expenses and other current assets                       (24,627)           5,127          (3,392)
      Other assets                                                     12,099           (5,952)         (4,182)
      Accounts payable and accrued liabilities                         15,341           (2,709)            804
      Deferred revenue                                                    569             (963)           (587)
      Other liabilties                                                (19,772)          (1,927)        (17,768)
                                                                      -------           ------         -------
        Net cash provided by operating activities                      86,871           67,393          94,189
                                                                      -------           ------         -------

INVESTING ACTIVITIES:
   Purchases of property and equipment                                (26,225)         (30,135)        (30,549)
   Disposal of property and equipment                                       -            1,719           2,354
   Cash paid for acquisitions                                      (1,060,681)        (140,746)              -
   Proceeds from sale of assets, net                                        -                -         135,500
   Deposits on acquisitions and other                                 (23,849)          (5,943)         (1,004)
                                                                      -------           ------         -------
        Net cash provided by (used in) investing activities        (1,110,755)        (175,105)        106,301
                                                                   ----------         --------         -------

FINANCING ACTIVITIES:
   Payments on long-term debt                                      (1,051,549)        (133,000)       (260,101)
   Proceeds from long-term debt                                     2,128,388            5,000          15,000
   Distributions to parent                                             (8,984)          (8,984)         (8,984)
   Contributions from parent                                           19,653          195,753          66,066
   Payments for debt related costs                                    (21,095)          (4,594)         (2,754)
                                                                      -------           ------         -------
        Net cash provided by (used in) financing activities         1,066,413           54,175        (190,773)
                                                                    ---------           ------        --------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                       42,529          (53,537)          9,717

CASH AND CASH EQUIVALENTS:
   Beginning of period                                                 17,370           59,899           6,362
                                                                      -------           ------         -------
   End of period                                                     $ 59,899          $ 6,362        $ 16,079
                                                                     ========          =======        ========
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these statements.


<PAGE>


                    EMMIS OPERATING COMPANY AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS - (CONTINUED)
                             (DOLLARS IN THOUSANDS)

                                               FOR THE YEARS ENDED FEBRUARY 28,
                                                2001          2002        2003
                                                ----          ----        ----
SUPPLEMENTAL DISCLOSURES:
     Cash paid for-
        Interest                              $ 58,362      $ 99,824    $ 77,090
        Income taxes                               550         1,281         887

ACQUISITION OF LOS ANGELES MAGAZINE:
     Fair value of assets aquired             $ 39,520
     Cash paid                                  36,827
                                                ------
     Liabilities recorded                     $  2,693
                                               =======

ACQUISITION OF KKFR-FM AND KXPK-FM:
     Fair value of assets aquired             $110,210
     Cash paid                                 109,052
                                               -------
     Liabilities recorded                      $ 1,158
                                               =======

ACQUISITION OF TELEVISION PROPERTIES
        FROM LEE ENTERPRISES, INC.:
     Fair value of assets aquired             $633,639
     Cash paid                                 582,994
                                               -------
     Liabilities recorded                     $ 50,645
                                               =======

ACQUISITION OF KIHT-FM, KFTK-FM, KPNT-FM
        WVRV-FM, WIL-FM, AND WRTH-AM:
     Fair value of assets aquired             $230,891
     Cash paid                                 230,891
                                               -------
     Liabilities recorded                     $      -
                                               =======

EXCHANGE OF ASSETS FOR KZLA-FM:
     Fair value of assets aquired             $185,000
     Basis in assets echanged                  163,000
     Gain on exchange of assets                 22,000
     Cash paid                                       -
                                               -------
     Liabilities recorded                     $      -
                                               =======

ACQUISITION OF KALC-FM:
     Fair value of assets aquired             $100,917
     Cash paid                                 100,917
                                               -------
     Liabilities recorded                      $     -
                                               =======

ACQUISITION OF KKLT-FM, KTAR-AM, AND KMVP-AM:
     Fair value of assets aquired                          $ 160,746
     Cash paid, net of deposit                               140,746
     Deposit paid in June 2000                                20,000
                          ----                                ------
     Liabilities recorded                                  $       -
                                                             =======


The accompanying notes to consolidated financial statements are an integral part
of these statements.


<PAGE>



                EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                  AND EMMIS OPERATING COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      (DOLLARS IN THOUSANDS UNLESS INDICATED OTHERWISE, EXCEPT SHARE DATA)


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a. Principles of Consolidation

     The  following  discussion  pertains  to Emmis  Communications  Corporation
("ECC") and its subsidiaries (collectively, "Emmis", the "Company", or "We") and
to Emmis Operating Company and its subsidiaries (collectively "EOC"). EOC became
a wholly owned subsidiary of ECC in connection with the Company's reorganization
(see Note 1c. below) on June 22, 2001.  Unless  otherwise noted, all disclosures
contained in these Notes to Consolidated Financial Statements apply to Emmis and
EOC.  Emmis' foreign  subsidiaries  report on a fiscal year ending  December 31,
which  Emmis   consolidates  into  its  fiscal  year  ending  February  28.  All
significant intercompany balances and transactions have been eliminated.

     b. Organization

     Emmis Communications  Corporation is a diversified media company with radio
broadcasting,  television broadcasting and magazine publishing operations. Emmis
operates  eighteen FM radio  stations and three AM radio  stations in the United
States that serve the nation's three largest radio markets of New York City, Los
Angeles and  Chicago,  as well as Phoenix,  St.  Louis,  Indianapolis  and Terre
Haute,   Indiana.   The  fifteen   television   stations  Emmis  operates  serve
geographically  diverse,  mid-sized  markets  in the U.S.,  as well as the large
markets  of  Portland  and  Orlando,  and have a variety of  television  network
affiliations,  including  five with CBS, five with Fox, three with NBC, one with
ABC and one with WB.  Emmis  Communications  Corporation  also  publishes  Texas
Monthly,  Los  Angeles,  Atlanta,  Indianapolis  Monthly,  Cincinnati,   Country
Sampler,  and  Country  Marketplace  magazines,  and has a 59.5%  interest  in a
national radio station in Hungary (Slager  Radio),  a 75% interest in one FM and
one AM radio  station in Buenos  Aires,  Argentina  (Votionis),  and  engages in
certain businesses ancillary to broadcasting, such as broadcast tower leasing.

     c. Reorganization

     On June 22, 2001, ECC transferred all of its assets and  substantially  all
of its  liabilities,  including its credit facility and its  outstanding  senior
subordinated notes, to EOC, a newly formed,  wholly-owned subsidiary in exchange
for 1,000 shares of no par value common stock.  As a result,  effective June 22,
2001,  EOC became  the only  direct  subsidiary  of ECC and ECC became a holding
company that conducts its business  operations through EOC and its subsidiaries.
ECC remains the issuer of the Class A, Class B and Class C common  stock and the
convertible  preferred  stock,  and is the obligor of the senior discount notes.
However,  EOC is the obligor of the senior  subordinated  notes and the borrower
under the credit  facility.  Pursuant  to the terms of the  senior  subordinated
notes, EOC is required to file with the SEC periodic reports on Forms 10-Q, 10-K
and 8-K as if EOC were required to do so pursuant to SEC rules and  regulations.
EOC's financial  statements are presented  herein for all periods required as if
EOC had existed at the beginning of the earliest  period  presented  because the
corporate reorganization was accounted for as a reorganization of entities under
common control.

     Substantially  all of ECC's business is conducted through its subsidiaries.
The credit  facility and senior  subordinated  notes  indenture  contain certain
provisions that may restrict the ability of ECC's subsidiaries to transfer funds
to ECC in the form of cash dividends,  loans or advances.  See the  accompanying
financial  statements  of EOC and its  subsidiaries  for the net  assets  of the
restricted subsidiaries.

     d. Revenue Recognition

     Broadcasting revenue is recognized as advertisements are aired. Publication
revenue is recognized in the month of delivery of the publication.


<PAGE>


     e. Allowance for Doubtful Accounts

     A  provision  for  doubtful  accounts  is  recorded  based on  management's
judgement  of  the   collectibility   of   receivables.   When   assessing   the
collectibility  of  receivables,   management  considers,  among  other  things,
historical loss activity and existing economic  conditions.  The activity in the
allowance for doubtful  accounts  during the years ended February 2001, 2002 and
2003 was as follows:

                                 Balance At                              Balance
                                 Beginning                                At End
                                  Of Year     Provision    Write-Offs    Of Year
                                  -------     ---------    ----------    -------
Year ended February 28, 2001     $ 1,924      $ 3,713      $ (3,435)    $ 2,202
Year ended February 28, 2002       2,202        4,005        (3,407)      2,800
Year ended February 28, 2003       2,800        4,102        (3,662)      3,240


     f. Television Programming

     Emmis  has  agreements  with  distributors  for the  rights  to  television
programming  over contract  periods which  generally run from one to five years.
Each  contract is recorded as an asset and a liability at an amount equal to its
gross  contractual  commitment when the license period begins and the program is
available for its first showing.  The portion of program  contracts which become
payable within one year is reflected as a current  liability in the accompanying
consolidated balance sheets.

     The  rights  to  program   materials  are  reflected  in  the  accompanying
consolidated  balance sheets at the lower of  unamortized  cost or estimated net
realizable  value.  Estimated net realizable  values are based upon management's
expectation of future  advertising  revenues,  net of sales  commissions,  to be
generated by the program  material.  Amortization  of program  contract costs is
computed under either the straight-line method over the contract period or based
on usage,  whichever  yields  the  greater  amortization  for each  program on a
monthly basis. Program contract costs that management expects to be amortized in
the  succeeding  year  are  classified  as  current  assets.   Program  contract
liabilities  are  typically  paid on a scheduled  basis and are not  affected by
adjustments for amortization or estimated net realizable value.  Certain program
contracts  provide  for the  exchange  of  advertising  air time in lieu of cash
payments for the rights to such programming. These contracts are recorded as the
programs are aired at the estimated fair value of the advertising air time given
in exchange for the program rights.

     g. Time Brokerage Fees

     The Company  generally enters into time brokerage  agreements in connection
with acquisitions,  pending  regulatory  approval of transfer of license assets.
Under  the terms of these  agreements,  the  Company  makes  specified  periodic
payments to the  owner-operator  in exchange for the grant to the Company of the
right to program and sell  advertising  of a specified  portion of the station's
inventory  of  broadcast  time.  The  Company  records   revenues  and  expenses
associated  with the portion of the  station's  inventory of  broadcast  time it
manages.  Nevertheless,  as the holder of the FCC  license,  the  owner-operator
retains control and responsibility  for the operation of the station,  including
responsibility over all programming broadcast on the station.

     Included in the accompanying  consolidated statements of operations for the
years ended  February 2001 and 2002 are time  brokerage fees of $7.3 million and
$0.5 million, respectively.

     h. Noncash Compensation

     Noncash  compensation  includes  compensation expense associated with stock
options  granted,   the  issuance  of  restricted  common  stock,  common  stock
contributed  to the Company's  Profit  Sharing Plan,  and common stock issued to
employees  at our  discretion.  The  Company  has  adopted  the  disclosure-only
provisions  of  Statement  of  Financial  Accounting  Standards  (SFAS) No. 123,
"Accounting for Stock-Based Compensation."

     In December 2001, Emmis instituted a 10% pay cut for  substantially  all of
its non-contract employees and also began a stock compensation program under its
2001 Equity Incentive Plan. All Emmis employees who were affected by the pay cut
were automatically eligible to participate in the stock compensation program and
all other  employees  are  eligible  to  participate  in the program by taking a
voluntary  pay cut. Each  participant  in the program could elect to receive the
portion of their compensation that was cut in the form of payroll stock that was
issued  every two weeks or in the form of  restricted  stock that vested and was
issued after the end of the award year in January  2003.  The payroll  stock was
awarded  based on the fair market  value of Emmis'  Class A Common  Stock on the

<PAGE>

date it is issued.  The restricted stock was awarded based on a discount off the
initial  value of Emmis' Class A Common Stock.  During the years ended  February
2002 and 2003, the stock compensation  program reduced cash compensation expense
by  approximately  $3.1  million  and $16.5  million  respectively,  but noncash
compensation  increased by the same amount. We issued  approximately 0.7 million
shares  during the first award  year.  The  program  has been  extended  through
December  2003,  but no formal  decisions  have been made  regarding  its status
beyond December 2003.

     i. Restructuring Fees

     In fiscal 2001 and 2002,  Emmis incurred  restructuring  fees of $2,057 and
$768, respectively. The fiscal 2001 restructuring fees reflect professional fees
associated  with the  evaluation  of  structural  alternatives.  The fiscal 2002
restructuring   fees  principally   consists  of  severance  and  related  costs
associated  with  centralizing  certain  technical  functions of the  television
division.

     j. Cash and Cash Equivalents

     Emmis  considers  time deposits,  money market fund shares,  and all highly
liquid debt instruments  with original  maturities of three months or less to be
cash equivalents.

     k. Property and Equipment

     Property  and  equipment  are recorded at cost.  Depreciation  is generally
computed by the  straight-line  method over the  estimated  useful  lives of the
related assets which are 31.5 years for buildings, not more than 32 years or the
life of the lease,  whichever is lower for  leasehold  improvements,  and 5 to 7
years for broadcasting equipment, office equipment and automobiles. Maintenance,
repairs and minor  renewals are expensed;  improvements  are  capitalized.  On a
continuing  basis,  the Company  reviews  the  carrying  value of  property  and
equipment for impairment in accordance  with SFAS No. 144,  "Accounting  for the
Impairment  or  Disposal  of  Long-Lived   Assets."  If  events  or  changes  in
circumstances  were  to  indicate  that  an  asset  carrying  value  may  not be
recoverable,  a  write-down  of the asset would be recorded  through a charge to
operations.  Depreciation  expense for the years ended February 2001,  2002, and
2003 was $22.1 million, $34.3 million, and $36.3 million, respectively.

     l. Intangible Assets

     Intangible  assets are recorded at cost. The cost of the broadcast  license
for Slager  Radio is being  amortized  over the seven year  initial  term of the
license. The cost of the broadcast license for the two stations in Buenos Aires,
Argentina is being  amortized  over the  twenty-three  year term of the license.
Other  definite-lived  intangibles are amortized using the straight-line  method
over varying  periods,  not in excess of 10 years.  Effective  March 1, 2002, we
ceased amortization of goodwill and FCC licenses in connection with our adoption
of SFAS No.  142,  "Goodwill  and Other  Intangible  Assets"  (See Note 7).  FCC
licenses are renewed every eight years for a nominal amount and historically all
of our FCC licenses have been renewed at the end of their respective  eight-year
periods.  Since we  expect  that all of our FCC  licenses  will  continue  to be
renewed in the future, we believe they have indefinite lives.

     Subsequent to the  acquisition  of an  intangible  asset,  Emmis  evaluates
whether later events and circumstances  indicate the remaining  estimated useful
life of that asset may warrant revision or that the remaining  carrying value of
such an asset may not be recoverable in accordance with SFAS No. 142,  "Goodwill
and other Intangible Assets".

     In fiscal 2001,  the Company  determined an intangible  balance  related to
WTLC-AM was impaired and as a result incurred a $2.0 million  impairment  charge
to record the  intangible  asset at its fair value.  This  impairment  charge is
reflected  in  impairment  loss  and  other  in  the  accompanying  consolidated
statements of operations. This station was sold in April 2001.

     In fiscal 2002,  the Company  determined an intangible  balance  related to
KALC-FM was impaired and as a result incurred a $9.1 million  impairment  charge
to record the  intangible  asset at its fair value.  This  impairment  charge is
reflected  in  impairment  loss  and  other  in  the  accompanying  consolidated
statements of operations. This station was sold in May 2002.

     m. Assets held for sale

     Effective May 1, 2002 Emmis completed the sale of substantially  all of the
assets of radio station KALC-FM in Denver,  Colorado to Entercom  Communications
Corporation for $88.0 million.  Also effective May 1, 2002,  Emmis completed the
sale of  substantially  all of the  assets of radio  station  KXPK-FM in Denver,
Colorado  to  Entravision  Communications  Corporation  for $47.5  million.  The
proceeds  from  the  sale of  these  stations  were  used to  repay  outstanding
obligations under the credit facility. As of February 28, 2002, the net carrying
amount of the assets held for sale was $123.4 million.
<PAGE>

     Combined  revenues  of the assets  held for sale were  approximately  $11.9
million for the year ended February  2002.  Combined  operating  expenses of the
assets held for sale were approximately $8.6 million for the year ended February
2002.  Combined  depreciation  and amortization of the assets held for sale were
approximately $3.6 million for the year ended February 2002.

     n. Advertising and Subscription Acquisition Costs

     Advertising and subscription  acquisition costs are expensed the first time
the  advertising  takes place,  except for certain  direct-response  advertising
related to the identification of new magazine  subscribers,  the primary purpose
of which is to elicit sales from  customers  who can be shown to have  responded
specifically  to the  advertising  and that results in probable  future economic
benefits. These direct-response  advertising costs are capitalized as assets and
amortized over the estimated  period of future benefit,  ranging from six months
to two years  subsequent to the  promotional  event. As of February 28, 2002 and
2003,  we had  approximately  $1.2 million and $1.6  million,  respectively,  in
direct-response  advertising  costs  capitalized as assets. On an interim basis,
the Company defers major advertising  campaigns for which future benefits can be
demonstrated. These costs are amortized over the shorter of the period benefited
or the  remainder  of the fiscal year.  Advertising  expense for the years ended
February 2001, 2002 and 2003 was $23.9 million, $15.0 million and $19.5 million,
respectively.

     o. Investments

     Emmis has a 50% ownership interest (approximately $5,114 as of February 28,
2003 and  2002) in a  partnership  in  which  the sole  asset is land on which a
transmission  tower is  located.  The other  owner  has  voting  control  of the
partnership. Emmis has a 25% ownership interest (approximately $2,060 and $2,627
as of February 28, 2003 and 2002,  respectively)  in a company  that  operates a
tower  site  in  Portland,   Oregon.   Emmis  has  a  51%   ownership   interest
(approximately $175 and $740 as of February 28, 2003 and 2002,  respectively) in
a company  that  operates  crafting  stores,  but  Emmis  does not  control  the
operations of the entity.  These  investments are accounted for using the equity
method of accounting. Emmis owns less than 3% (approximately $970 as of February
28,  2003  and  2002)  of an  over-the-air  digital  content  distributor.  This
investment is accounted for using the cost method of  accounting.  During fiscal
2001,  Emmis reduced the carrying value of its investment in  BuyItNow.com  from
$5.0 million to zero as the decline in the value of the investment was deemed to
be other  than  temporary.  To  determine  the fair  value of  BuyItNow.com,  we
analyzed the public equity values of its competitors.  This expense is reflected
in other income in the accompanying consolidated statements of operations.

     In fiscal 2003,  the Company and other partners in the local media internet
venture (LMIV) agreed to dissolve the joint venture.  Consequently,  in addition
to recording  our share of LMIV's  losses for the year,  the Company  recorded a
$2.1  million  charge  to write  off our  investment  in LMIV.  This  charge  is
reflected  in  loss  from   unconsolidated   affiliates   in  the   accompanying
consolidated statements of operations.

     p. Deferred Revenue and Barter Transactions

     Deferred  revenue  includes  deferred  magazine  subscription  revenue  and
deferred barter revenue.  Magazine  subscription  revenue is recognized when the
publication is shipped.  Barter  transactions are recorded at the estimated fair
value  of the  product  or  service  received.  Broadcast  revenue  from  barter
transactions  is recognized  when  commercials  are broadcast or  publication is
delivered.  The appropriate  expense or asset is recognized when  merchandise or
services are used or  received.  Barter  revenues  for the years ended  February
2001,  2002,  and 2003 were $12.0  million,  $15.8  million,  and $15.3 million,
respectively,  and barter expenses were, $12.0 million, $15.2 million, and $16.1
million, respectively.

     q. Foreign Currency Translation

     The  functional  currency of Slager Radio is the Hungarian  forint.  Slager
Radio's  balance sheet has been translated from forints to the U.S. dollar using
the  current  exchange  rate in effect at the  subsidiary's  balance  sheet date
(December 31). Slager Radio's  results of operations have been translated  using
an average exchange rate for the period.  The translation  adjustment  resulting
from the conversion of Slager Radio's financial  statements was ($861),  ($754),
and $2,474 for the years ended February 2001, 2002, and 2003, respectively. This
adjustment is reflected in shareholders' equity in the accompanying consolidated
balance sheets.

     The functional currency of the two stations in Argentina is the Argentinean
peso, which until January 2002 was tied to the U.S. dollar through the Argentine
government's  convertibility  plan.  In January 2002,  the Argentine  government

<PAGE>

allowed the peso to devalue and trade  against  the U.S.  dollar  independently.
These two  stations'  balance  sheets  have been  translated  from pesos to U.S.
dollars  using the exchange  rate in effect at the  subsidiary's  balance  sheet
date. The results of operations have been translated  using an average  exchange
rate for the period. The translation adjustment resulting from the conversion of
their  financial  statements  was $7,057 and $5,605 for the years ended February
2002 and 2003,  respectively.  This  adjustment  is reflected  in  shareholders'
equity in the accompanying consolidated balance sheets.

     r. Earnings Per Share

         Emmis

     Statement of Financial  Accounting  Standards (SFAS) No. 128, "Earnings Per
Share",  requires  dual  presentation  of basic and diluted  earnings  per share
("EPS")  on the face of the  income  statement  for all  entities  with  complex
capital  structures.  Basic EPS is computed by dividing net income  available to
common shareholders by the weighted-average  number of common shares outstanding
for the period (46,869,050, 47,334,038 and 53,014,268 shares for the years ended
February 2001, 2002, and 2003, respectively). Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted.  Potentially  dilutive securities at February 2001,
2002,  and 2003  consisted  of stock  options and the 6.25%  Series A cumulative
convertible  preferred  stock.  The  conversion  of the  preferred  stock is not
included in the  calculation  of diluted net income per common share for each of
the three years ended February 28, 2003 as the effect of these conversions would
be antidilutive.  Additionally,  the conversion of stock options is not included
in the  calculation  of diluted net income per common  share for the years ended
February  28,  2002  and  2003  as the  effect  of  their  conversion  would  be
antidilutive.  Weighted  average common  equivalent  shares  outstanding for the
period for  purposes of computing  diluted EPS are  47,940,265,  47,334,038  and
53,014,268  for the years ended February  2001,  2002,  and 2003,  respectively.
Excluded  from the  calculation  of diluted net income per share are 3.7 million
weighted  average  shares that would  result from the  conversion  of  preferred
shares for the years ended February 2001, 2002, and 2003,  respectively.  In the
year ended February 28, 2001,  approximately  0.7 million  options were excluded
from the  calculation  of  diluted  net  income per share as the effect of their
conversion would be antidilutive.

         EOC

     Because EOC is a wholly-owned  subsidiary of Emmis,  disclosure of earnings
per share for EOC is not required.

     s. Estimates

     The  preparation  of financial  statements  in accordance  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions   that  affect  the  reported   amounts  of  assets,
liabilities,   revenues  and  expenses  in  the  financial   statements  and  in
disclosures of contingent  assets and  liabilities.  Actual results could differ
from those estimates.

    t.   Fair Value of Financial Instruments

     The carrying  amounts of cash,  accounts  receivable,  and accounts payable
approximate  fair  value  because  of the  short  maturity  of  these  financial
instruments.  The carrying  amounts of interest rate swaps are recorded at their
fair value of $4.3  million,  as of February  28, 2003 and are included in other
noncurrent  liabilities in the  accompanying  consolidated  balance sheets.  The
cumulative  amount  of  change  in fair  value of  interest  rate  swaps is $2.4
million,  net of tax, and is recorded in accumulated other comprehensive  income
in  the  accompanying   consolidated  balance  sheets.  Except  for  the  senior
subordinated  notes and senior discount notes, the carrying amounts of long-term
debt approximate  fair value due to the variable  interest rate on such debt. On
February 28, 2003 and 2002, the fair value of the senior  subordinated notes was
approximately  $308.8  million and $308.3  million,  respectively,  and the fair
value of the senior discount notes was  approximately  $234.6 million and $268.3
million,  respectively.  Fair value  estimates  are made at a specific  point in
time, based on relevant market information about the financial instrument.

     u. Derivative Financial Instruments

     On March 1, 2001,  Emmis adopted SFAS No. 133,  "Accounting  for Derivative
Instruments and Hedging Activities," as amended by SFAS No. 138, "Accounting for
Derivative  Instruments  and Hedging  Activities."  These  statements  establish
accounting and reporting standards for derivative instruments, including certain
derivative  instruments  embedded in other contracts.  These statements  require
that every  derivative  instrument be recorded in the balance sheet as either an
asset or a liability  measured  at its fair value.  Changes in the fair value of
derivatives are to be recorded each period in earnings or comprehensive  income,
depending on whether the  derivative  is  designated  and effective as part of a
hedged  transaction,  and on the type of hedge  transaction.  Gains or losses on

<PAGE>

derivative  instruments  reported  in the  other  comprehensive  income  must be
reclassified  as earnings in the period in which  earnings  are  affected by the
underlying  hedged  item,  and the  ineffective  portion of all  hedges  must be
recognized  in  earnings  in the  current  period.  These  standards  result  in
additional  volatility  in  reported  assets,  liabilities,  earnings  and other
comprehensive  income.  SFAS No. 133  further  requires  that the fair value and
effectiveness of each hedging instrument must be measured quarterly.  The result
of  each   measurement   could  result  in  fluctuations  in  reported   assets,
liabilities,  other  comprehensive  income and earnings as these changes in fair
value and effectiveness are recorded to the financial statements.

     SFAS  No.  133  requires  that  as of the  date  of  initial  adoption  the
difference  between the fair value of the derivative  instruments to be recorded
on the balance sheet and the previous  carrying  amount of those  derivatives be
reported in net income or other  comprehensive  income,  as appropriate,  as the
cumulative effect of a change in accounting  principle in accordance with APB 20
"Accounting  Changes."  On March 1,  2001,  Emmis  recorded  the  effect  of the
adoption of SFAS No. 133 which  resulted in an immaterial  impact to the results
of operations and the financial position of Emmis. See footnote 4 for discussion
of the interest  rate swap  agreements in effect during fiscal 2002 and 2003 and
at February 28, 2003.

     v. Recent Accounting Pronouncements

     In June 2001, the Financial  Accounting  Standards Board (FASB) issued SFAS
No. 141, "Business  Combinations." SFAS No. 141 addresses  financial  accounting
and reporting for business  combinations  and  supersedes  Accounting  Principle
Board  ("APB")  Opinion  No.  16,  "Business  Combinations"  and  SFAS  No.  38,
"Accounting for Preacquisition Contingencies of Purchased Enterprises." SFAS No.
141 is effective for all business combinations initiated after June 30, 2001 and
eliminates   the   pooling-of-interest   method  of   accounting   for  business
combinations  except for qualifying  business  combinations  that were initiated
prior to July 1, 2001.  SFAS No. 141 also  changes  the  criteria  to  recognize
intangible  assets apart from  goodwill.  The Company  adopted this Statement on
July 1, 2001. The Company has  historically  used the purchase method to account
for all  business  combinations  and adoption of this  Statement  did not have a
material impact on the Company's  financial  position,  cash flows or results of
operations.

     In June 2001, the FASB issued SFAS No. 142,  "Goodwill and Other Intangible
Assets." See Note 7 for a discussion of SFAS No. 142.

     In June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
Retirement  Obligations" that applies to legal  obligations  associated with the
retirement  of a tangible  long-lived  asset that results from the  acquisition,
construction,  development  and/or the normal  operation of a long-lived  asset.
Under this  standard,  guidance is  provided  on  measuring  and  recording  the
liability.  Adoption of this Statement by the Company will be effective on March
1, 2003.  The Company does not believe that the adoption of this  Statement will
materially  impact the Company's  financial  position,  cash flows or results of
operations.

     Effective  March 1, 2002, the Company  adopted SFAS No. 144 "Accounting for
the  Impairment or Disposal of  Long-Lived  Assets"  which  addresses  financial
accounting  and reporting for the  impairment or disposal of long-lived  assets.
While SFAS No. 144 supersedes  SFAS No. 121,  "Accounting  for the Impairment of
Long-Lived  Assets  and for  Long-Lived  Assets to Be  Disposed  Of," it removes
certain assets such as deferred tax assets,  goodwill and intangible  assets not
being  amortized  from its scope and  retains the  requirements  of SFAS No. 121
regarding the recognition of impairment  losses on other long-lived  assets held
for use. SFAS No. 144 also supersedes the accounting and reporting provisions of
APB Opinion No. 30, "Reporting the Results of  Operations-Reporting  the Effects
of  Disposal  of a  Segment  of  a  Business,  and  Extraordinary,  Unusual  and
Infrequently Occurring events and Transactions" for the disposal of a segment of
a business.  However,  SFAS No. 144 retains the requirement in Opinion No. 30 to
report  separately  discontinued  operations  and extends  that  reporting  to a
component of an entity that either has been  disposed of (by sale,  abandonment,
or in a distribution  to owners) or is classified as held for sale. The adoption
of this  statement  did not have a material  impact on the  Company's  financial
position, cash flows or results of operations.

     In April 2002,  the FASB issued SFAS No. 145,  "Rescission  of SFAS Nos. 4,
44, and 64, Amendment of SFAS No. 13, and Technical  Corrections".  SFAS No. 145
rescinds SFAS No. 4, "Reporting Gains and Losses from  Extinguishment  of Debt",
and an amendment of that Statement,  and SFAS No. 64,  "Extinguishments  of Debt
Made to Satisfy Sinking-Fund Requirements".  SFAS No. 145 also rescinds SFAS No.
44, "Accounting for Leases", to eliminate an inconsistency  between the required
accounting  for  sale-leaseback  transactions  and the required  accounting  for
certain  lease  modifications  that have  economic  effects  that are similar to
sale-leaseback   transactions.   SFAS  No.  145  also  amends   other   existing
authoritative  pronouncements  to make various  technical  corrections,  clarify
meanings, or describe their applicability under changed conditions.  Adoption of
this Statement by the Company will be effective on March 1, 2003. The effects of
this  pronouncement  will  result in future  gains and  losses  related  to debt
transactions to be classified in income from continuing operations. In addition,
we are required to  reclassify  all of the  extraordinary  items related to debt
transactions recorded in prior periods, including those recorded in fiscal 2003,
to income from continuing operations.
<PAGE>

     In June  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal  Activities." SFAS No. 146 supersedes  Emerging
Issues Task Force Issue No. 94-3. SFAS No. 146 requires that the liability for a
cost  associated  with an exit or  disposal  activity  be  recognized  when  the
liability is incurred,  not at the date of an entity's  commitment to an exit or
disposal plan. The provisions of SFAS No. 146 are effective for exit or disposal
activities  initiated  after  December 31, 2002. The Company does not anticipate
that  the  adoption  of  SFAS  No.  146  will  have  a  material  impact  on its
consolidated financial position, results of operations or cash flows.

     As of December 2002, we adopted SFAS No. 148,  "Accounting  for Stock-Based
Compensation-Transaction and Disclosure, an Amendment of SFAS No. 123." SFAS No.
148 revises  the methods  permitted  by SFAS No. 123 of  measuring  compensation
expense for stock-based employee  compensation plans. We use the intrinsic value
method  prescribed in Accounting  Principles  Board Opinion No. 25, as permitted
under SFAS No. 123. Therefore, this change did not have a material effect on our
financial statements. SFAS No. 148 requires us to disclose pro forma information
related to  stock-based  compensation,  in  accordance  with SFAS No.  123, on a
quarterly  basis in addition to the current  annual  basis  disclosure.  We will
report the pro forma  information on an interim basis beginning with our May 31,
2003 Form 10-Q.

     w. Pro Forma Information Related To Stock-Based Compensation

     As permitted under SFAS No. 123, "Accounting for Stock-Based Compensation,"
the  Company  measures   compensation   expense  for  its  stock-based  employee
compensation  plans using the  intrinsic  value method  prescribed by Accounting
Principles Board Option No. 25,  "Accounting for Stock Issued to Employees," and
provides  pro forma  disclosures  of net income and earnings per share as if the
fair value-based method prescribed by SFAS No. 123 had been applied in measuring
compensation expense.

     Had  compensation  cost for the  Company's  2001,  2002 and 2003 grants for
stock-based compensation plans been determined consistent with SFAS No. 123, the
Company's net income  (loss)  available to common  shareholders  for these years
would  approximate  the pro forma amounts below (in thousands,  except per share
data):

                                               Year Ended February 28,
                                         2001            2002            2003
                                         ----            ----            ----
Net Income (Loss) Available to
 Common Shareholders:
     As Reported                        $ 4,752        $ (73,092)    $ (173,452)
     Pro Forma                          $   113        $ (85,760)    $ (179,695)

Basic EPS:
     As Reported                         $ 0.10          $ (1.54)       $ (3.27)
     Pro Forma                           $    -          $ (1.81)       $ (3.39)

Diluted EPS:
     As Reported                         $ 0.10          $ (1.54)       $ (3.27)
     Pro Forma                           $    -          $ (1.81)       $ (3.39)


     Because the fair value method of accounting has not been applied to options
prior to March 1, 1995,  the  resulting pro forma  compensation  cost may not be
representative  of that to be expected in future  years.  The fair value of each
option granted is estimated on the date of grant using the Black-Scholes  option
pricing model utilizing the following weighted average assumptions:

                                          Year Ended February 28,
                                2001                 2002                2003
                                ----                 ----                ----
Risk-Free Interest Rate:       4.54%                5.41%               3.86%
Expected Dividend Yield:          0%                   0%                 0%
Expected Life (Years):          6.4                  8.3                 8.6
Expected Volatility:          56.79%               57.67%              58.00%



<PAGE>


     x. Reclassifications

     Certain  reclassifications  have  been made to the  prior  years  financial
statements to be consistent with the February 28, 2003 presentation.

2. COMMON STOCK

     Emmis has authorized  170,000,000 shares of Class A common stock, par value
$.01 per share,  30,000,000  shares of Class B common stock,  par value $.01 per
share, and 30,000,000  shares of Class C common stock, par value $.01 per share.
The rights of these three  classes are  essentially  identical  except that each
share of Class A common  stock has one vote with  respect to  substantially  all
matters,  each  share of Class B common  stock  has 10  votes  with  respect  to
substantially all matters,  and each share of Class C common stock has no voting
rights with respect to substantially all matters.  Class B common stock is owned
by the principal shareholder (Jeffrey H. Smulyan).  All shares of Class B common
stock  convert to Class A common  stock upon sale or other  transfer  to a party
unaffiliated with the principal  shareholder.  At February 28, 2002 and 2003, no
shares  of Class C common  stock  were  issued  or  outstanding.  The  financial
statements presented reflect the issuance of Class A and Class B common stock.

     In April 2002,  ECC completed the sale of 4.6 million shares of its Class A
common stock at $26.80 per share  resulting in total proceeds of $123.3 million.
The net proceeds of $120.2  million were  contributed  to EOC and 50% of the net
proceeds  were used in April  2002 to repay  outstanding  obligations  under our
credit facility. The remainder was invested, and in July 2002 distributed to ECC
and used to  redeem  approximately  22.6% of ECC's  outstanding  12 1/2%  senior
discount notes (see Note 4).

3. PREFERRED STOCK

     Emmis has authorized  10,000,000  shares of preferred  stock,  which may be
issued with such designations,  preferences,  limitations and relative rights as
Emmis' Board of Directors may authorize.

     Emmis has 2.875  million  shares of 6.25% Series A  cumulative  convertible
preferred  stock  outstanding,  which have a  liquidation  preference of $50 per
share and a par value of $.01 per share.  Each preferred share is convertible at
the option of the holder  into 1.28 shares of Class A common  stock,  subject to
certain  events.  Dividends are cumulative  and payable  quarterly in arrears on
January 15,  April 15, July 15, and October 15 of each year at an annual rate of
$3.125 per preferred share.

     Beginning on October 15, 2002,  and each October 15  thereafter,  Emmis may
redeem the preferred stock for cash at the following  redemption premiums (which
are expressed as a percentage of the liquidation  preference per share), plus in
each case accumulated and unpaid  dividends,  if any, whether or not declared to
the redemption date:


         Year                                    Amount
         ----                                   --------
         2002                                   103.571%
         2003                                   102.679%
         2004                                   101.786%
         2005                                   100.893%
         2006 and thereafter                    100.000%


The terms of ECC's preferred stock provide for a quarterly  dividend  payment of
$.78125 per share on each  January 15,  April 15, July 15 and October 15.  While
Emmis had  sufficient  liquidity to declare and pay the dividends as they become
due, it was not  permitted to do so for the October 15, 2001,  January 15, 2002,
and April 15,  2002  payments  because  Emmis'  leverage  ratio under the senior
discount  notes  indenture  exceeded 8:1 and its leverage ratio under the senior
subordinated notes indenture exceeded 7:1. ECC's board of directors set a record
date for payments,  but did not declare the dividends.  Instead, a wholly-owned,
unrestricted  subsidiary  of EOC made a  payment  of  $.78125  per share to each
preferred  shareholder  of record.  This  subsidiary  was  permitted to make the
payments  to the  preferred  shareholders  under the senior  discount  notes and
senior subordinated notes indentures.  Currently, Emmis meets its leverage ratio
requirements  under  both the senior  discount  notes  indenture  and the senior
subordinated notes indenture. On July 2, 2002, ECC's board of directors declared
the April 15, 2002 dividend,  as well as dividends  payable October 15, 2001 and
January 15, 2002,  and deemed the  obligation  to pay each dividend to have been
discharged by the subsidiary's prior payment.


<PAGE>



4. CREDIT FACILITY, SENIOR SUBORDINATED NOTES AND SENIOR DISCOUNT NOTES

     The credit facility,  senior  subordinated  notes and senior discount notes
were comprised of the following at February 28, 2002 and 2003:

                                                          2002            2003
                                                          ----            ----
Credit Facility
     Revolver                                         $        -    $     2,112
     Term Note A                                          398,453       204,786
     Term Note B                                          553,547       500,000
8 1/8% Senior Subordinated Notes Due 2009                 300,000       300,000
                                                          -------       -------
                                                        1,252,000     1,006,898
Less:  Credit facility debt to be repaid with proceeds
     of assets held for sale and current maturities       135,000         9,953
                                                          -------         -----
         EOC total                                      1,117,000       996,945

12 1/2% Senior Discount Notes Due 2011                    226,507       197,844
                                                        ---------       -------
         Emmis total                                  $ 1,343,507   $ 1,194,789
                                                      ===========   ===========


CREDIT FACILITY

     On  December  29,  2000 ECC entered  into an amended  and  restated  credit
facility for $1.4 billion  (consisting  of a $320.0 million  revolver,  a $480.0
million  term  note A and a $600.0  million  term note B).  In June  2001,  upon
completion of the  Company's  reorganization  (see Note 1c), the Company  repaid
$93.0  million of term notes and  transferred  the credit  facility to EOC.  The
repayment  resulted in the  cancellation  of a portion of the term notes and the
Company recorded an extraordinary  loss of  approximately  $1.1 million,  net of
taxes,  related to  unamortized  deferred debt issuance costs for the year ended
February 28, 2002.  During  fiscal 2002,  EOC repaid and cancelled an additional
$35.0  million in term notes.  On November 30, 2001,  EOC amended the  financial
covenants of its credit facility through November 30, 2002,  which,  among other
things,  reduced  total  availability  under the revolver to $220.0  million and
resulted in the  amortization  of $1.4 million of deferred debt  issuance  costs
into interest expense during the year ended February 28, 2002.

     In the first quarter of fiscal 2003, we repaid approximately $195.1 million
of credit  facility  debt with the net proceeds  from our Denver  radio  station
asset sales and 50% of the net proceeds from our April 2002 equity offering.  In
connection  with the repayment of existing term loans  outstanding,  the Company
recorded a $2.3  million  extraordinary  charge,  net of taxes of $1.3  million,
relating to the write off of deferred debt fees.

     On June 21,  2002,  EOC amended  its credit  facility to (1) issue a $500.0
million new Term B Loan which was used to repay  amounts  outstanding  under the
existing  $552.1  million Term B loan,  (2) reset  financial  covenants  for the
remaining  term of the  credit  facility,  and (3) permit EOC to make a one time
cash  distribution  to ECC for the purpose of redeeming a portion of its 12 1/2%
senior  discount  notes. In connection with the repayment of the existing Term B
Loan, the Company recorded a $0.5 million  extraordinary charge, net of taxes of
$0.3 million, relating to the write off of deferred debt fees.

     The revolver  and term note A mature  February 28, 2009 and the term note B
matures August 31, 2009. Net deferred debt costs of approximately  $15.8 million
and $20.0 million,  respectively,  relating to the credit facility are reflected
in the  accompanying  consolidated  balance  sheets as of February  28, 2003 and
2002,  and are  being  amortized  over  the  life of the  credit  facility  as a
component of interest expense.

     Prior to the existing credit facility,  EOC entered into a bridge financing
arrangement  in October 2000 that  provided up to $1.0 billion in capacity.  The
bridge  financing was replaced by the existing  credit  facility and accordingly
$3.4 million of fees  associated  with the bridge  financing were amortized into
interest expense during the year ended February 28, 2001.

     The amended and restated credit facility  provides for letters of credit to
be made available to EOC not to exceed $100.0 million.  The aggregate  amount of
outstanding  letters of credit and amounts  borrowed  under the revolver  cannot
exceed the revolver commitment. At February 28, 2003, $1.4 million in letters of
credit were outstanding.


<PAGE>



     All  outstanding  amounts under the credit  facility bear interest,  at the
option of EOC, at a rate equal to the  Eurodollar  Rate or an  alternative  base
rate (as  defined in the credit  facility)  plus a margin.  The margin  over the
Eurodollar Rate or the alternative base rate varies (ranging from 0% to 2.9% and
0.5% to 2.5%),  depending  on Emmis' ratio of debt to  operating  cash flow,  as
defined in the  agreement.  The  weighted-average  interest  rate on  borrowings
outstanding  under the credit  facility,  including the effects of interest rate
swaps was  approximately  4.7% and 6.3% at February  28, 2003 and  February  28,
2002,  respectively.  Interest  is due on a  calendar  quarter  basis  under the
alternative base rate and at least every three months under the Eurodollar Rate.
The credit  facility  requires EOC to have fixed  interest  rates for a two year
period on at least 50% of its total outstanding debt, as defined  (including the
senior  subordinated  debt).  After the first two years,  this ratio of fixed to
floating rate debt must be maintained if EOC's total leverage ratio, as defined,
is greater than 6:1 at any quarter end.  The  notional  amount of interest  rate
protection  agreements at February 28, 2003 totaled $230  million.  The interest
rate swap  agreements,  which expire at various  dates  beginning May 8, 2003 to
February 8, 2004,  effectively establish interest rates on the credit facility's
underlying  base rate  approximating  a  weighted  average  rate of 4.76% on the
three-month LIBOR interest rate.

     As  indicated  in footnote  1u.,  Emmis  accounts  for  interest  rate swap
arrangements  under SFAS No. 133 as amended  by SFAS No.  138.  The fair  market
value of these swaps at February 28, 2003, was a liability of $4.3 million which
is reflected in the accompanying consolidated balance sheets, with an associated
income tax asset of $1.7 million.  As Emmis has  designated  these interest rate
swap agreements as cash flow hedges and the swaps were highly  effective  during
the year ended  February 28, 2003, the net liability was recorded as a component
of comprehensive income and the ineffectiveness was not material.  Interest paid
under these swap  arrangements  was $3.6 million and $11.0 million for the years
ended February 28, 2002 and 2003, respectively.

     The  aggregate  amount of term notes A and B begin  amortizing  in December
2003. The annual amortization and reduction schedules for debt outstanding as of
February 28, 2003, are as follows:

               SCHEDULED AMORTIZATION/REDUCTION OF CREDIT FACILITY


                         Term Loan A/
    Year Ended             Revolver            Term Loan B             Total
  February 28 (29),      Amortization         Amortization         Amortization
  -----------------      ------------         ------------         ------------
       2004               $   8,703           $   1,250            $   9,953
       2005                  35,838               5,000               40,838
       2006                  37,886               5,000               42,886
       2007                  38,909               5,000               43,909
       2008                  40,957               5,000               45,957
       2009                  44,605               5,000               49,605
       2010                       -             473,750              473,750
                          ---------           ---------            ---------
       Total              $ 206,898           $ 500,000            $ 706,898
                          =========           =========            =========


     Proceeds from raising  additional equity,  issuing additional  subordinated
debt, or from asset sales, as well as excess cash flow beginning in fiscal 2004,
may be required to repay amounts  outstanding  under the credit facility.  These
mandatory  repayment  provisions  may apply  depending  on EOC's total  leverage
ratio,  as defined  under the credit  facility.  Additionally,  EOC may reborrow
amounts paid in accordance with these provisions under certain circumstances.

     The credit facility contains various financial and operating  covenants and
other  restrictions  with  which  EOC  must  comply,  including,  among  others,
restrictions  on  additional  indebtedness,  incurrence  of liens,  engaging  in
businesses  other than its primary  business,  paying cash  dividends  on common
stock,  redeeming or repurchasing  capital stock of ECC,  acquisitions and asset
sales, as well as  requirements  to maintain  certain  financial  ratios.  After
giving  effect to the July 2002  amendment,  EOC was in  compliance  with  these
covenants at February 28, 2003.  The credit  facility  provides that an event of
default will occur if there is a change of control of ECC, as defined.  A change
of control  includes,  but is not limited to, Jeffrey H. Smulyan ceasing to own,
directly or indirectly, at least 35% of the general voting rights of the capital
stock of ECC. Substantially all of Emmis' assets,  including the stock of Emmis'
wholly-owned subsidiaries, are pledged to secure the credit facility.


<PAGE>



SENIOR SUBORDINATED NOTES

     On February 12, 1999, ECC issued $300 million of 8 1/8% senior subordinated
notes. The senior  subordinated  notes were sold at 100% of the face amount.  In
March 1999, EOC filed an Exchange Offer  Registration  Statement with the SEC to
exchange the senior  subordinated  notes for new series B notes registered under
the  Securities  Act. The terms of the series B notes are identical to the terms
of the senior  subordinated  notes.  In June 2001,  ECC  transferred  the senior
discount notes to EOC as part of the company's reorganization (see Note 1c).

     On or after  March 15,  2004 and until  March  14,  2007,  the notes may be
redeemed  at the  option  of EOC in  whole  or in part at  prices  ranging  from
104.063% to 101.354%  plus  accrued and unpaid  interest.  On or after March 15,
2007, the notes may be redeemed at 100% plus accrued and unpaid interest. Upon a
change of control (as defined), EOC is required to make an offer to purchase the
notes then outstanding at a purchase price equal to 101% plus accrued and unpaid
interest.  Interest  on the notes is  payable  semi-annually.  The notes have no
sinking fund requirements and are due in full on March 15, 2009.

     The notes are  guaranteed  by  certain  subsidiaries  of EOC and  expressly
subordinated in right of payment to all existing and future senior  indebtedness
(as  defined)  of EOC.  The notes will rank pari  passu  with any future  senior
subordinated   indebtedness   (as  defined)  and  senior  to  all   subordinated
indebtedness (as defined) of EOC.

     The indenture  relating to the notes contains covenants with respect to EOC
which  include  limitations  of  indebtedness,  restricted  payments  (including
preferred stock dividend  payments,  see Note 3),  transactions with affiliates,
issuance and sale of capital  stock of restricted  subsidiaries,  sale/leaseback
transactions and mergers,  consolidations or sales of substantially all of EOC's
assets. EOC was in compliance with these covenants at February 28, 2003.

SENIOR DISCOUNT NOTES

     On March 27,  2001,  Emmis  received  $202.6  million of proceeds  from the
issuance of senior discount notes due 2011, less approximately  $12.0 million of
debt issuance costs. The notes,  for which ECC is the obligor,  accrete interest
at a rate of 12.5% per year, compounded  semi-annually to an aggregate principal
amount of $286.3  million on March 15,  2006,  after  considering  the July 2002
redemption.  Commencing  on September  15, 2006,  interest is payable in cash on
each March 15 and September 15, with the  aggregate  principal  amount of $286.3
million due on March 15,  2011.  The notes have no sinking fund  requirement.  A
portion of the net  proceeds  was used to fund the  acquisition  of three  radio
stations in Phoenix, Arizona and the remaining net proceeds ($93.0 million) were
placed in escrow. In June 2001, upon completion of the Company's  reorganization
(see Note 1c),  the  proceeds  held in escrow were  released  and used to reduce
outstanding borrowings under the credit facility.

     On July 1, 2002, ECC redeemed  approximately  22.6% of its senior  discount
notes. Approximately $60.1 million of the proceeds from the Company's April 2002
equity offering were used to repay  approximately  $53.4 million of the carrying
value of the discount notes at July 1, 2002 and pay  approximately  $6.7 million
for a redemption premium.  The redemption premium and approximately $1.6 million
of  deferred  debt fees  related  to the  discount  notes,  net of taxes of $0.8
million, were recorded as an extraordinary charge in the year ended February 28,
2003.

     Prior to March 15, 2004,  the Company may, at its option,  use the net cash
proceeds of one or more Public Equity Offerings (as defined), to redeem up to an
additional 12.4% of the aggregate  principal amount of the notes at a redemption
price equal to 112.5% plus accrued and unpaid  interest,  provided that at least
$240.5  million  of the  aggregate  principal  amount at  maturity  of the notes
originally issued remains outstanding after such redemption.  Additionally,  any
time prior to March 15, 2006, the Company may redeem all or part of the notes at
a redemption price equal to 100% of the accreted value (as defined) of the notes
plus the  applicable  premium (as  defined) as of, and  liquidating  damages (as
defined),  if any,  to the date of  redemption.  On or after  March 15, 2006 and
until March 14, 2009,  the notes may be redeemed at the option of the Company in
whole or in part at prices  ranging  from  106.25% to 102.083%  plus accrued and
unpaid  interest.  On or after March 15, 2009, the notes may be redeemed at 100%
plus accrued and unpaid  interest.  Upon a change of control (as  defined),  the
Company is  required to make an offer to  purchase  the notes then  outstanding.
Prior to March 15, 2006,  the purchase  price will be 101% of the accreted value
of the notes. On or after March 15, 2006, the purchase price will be 101% of the
outstanding principal amount of the notes plus accrued and unpaid interest.

     In June 2001, ECC filed an Exchange Offer  Registration  Statement with the
SEC to  exchange  the  senior  discount  notes  for new  senior  discount  notes
registered  under the Securities Act. The terms of the new senior discount notes
are identical to the terms of the senior discount notes they replaced.
<PAGE>

     The notes are  unsecured  obligations  of ECC and will rank pari passu with
all future  senior  indebtedness  (as defined) and senior in right of payment to
future subordinated indebtedness (as defined). The notes are subordinated to all
indebtedness and liabilities (as defined) of ECC's subsidiaries.

     The indenture  relating to the notes contains covenants with respect to the
Company  which  include   limitations  of  indebtedness,   restricted   payments
(including  preferred stock dividend  payments,  see Note 3),  transactions with
affiliates,  issuance and sale of capital stock of restricted subsidiaries,  and
mergers,  consolidations  or sales of substantially all of the Company's assets.
The Company was in compliance with these covenants at February 28, 2003.


5. OTHER LONG-TERM DEBT

     Other  long-term  debt was  comprised of the following at February 28, 2002
and 2003:

                                                2002                    2003
                                                ----                    ----
Hungary:
     License Obligation                       $ 11,285                $ 13,363
     Bonds Payable                               2,261                   3,099
     Notes Payable                                 659                   1,277
Other                                              677                     307
                                                ------                  ------
Total Other Long-Term Debt                      14,882                  18,046
Less:  Current Maturities                        7,933                   4,959
                                                ------                  ------
Other Long-Term Debt, Net of
     Current Maturities                        $ 6,949                $ 13,087
                                               =======                ========



     Subsequent to the license  restructuring  completed in December  2002,  the
license obligation is comprised of the original  obligation due in November 2004
and five  additional  equal annual  installments  that will commence in November
2005 and end in November 2009. The original obligation is non-interest  bearing;
however, in accordance with the license purchase agreement,  a Hungarian cost of
living  adjustment is calculated  annually and is payable,  concurrent  with the
principal payments, on the outstanding obligation. The cost of living adjustment
is estimated  each  reporting  period and is included in interest  expense.  The
original  license  obligation has been discounted at an imputed interest rate of
approximately  3% to reflect the  obligation at its fair value.  The  additional
obligation that stems from the restructuring is also non-interest bearing and no
cost of living adjustment  applies.  Prevailing market interest rates in Hungary
exceed inflation by approximately 7%.  Accordingly,  the License  Obligation has
been discounted at an imputed  interest rate of  approximately 7% to reflect the
additional  obligation at its fair value. The total License  Obligation of $13.4
million as of February 28, 2003, is reflected net of an unamortized  discount of
$ 1.5 million.

     The Bonds and Notes Payable are payable by Emmis'  Hungarian  subsidiary to
the minority  shareholders  of the subsidiary.  The Bonds,  payable in Hungarian
forints, are due on maturity at November 2004 and bear interest at the Hungarian
State Bill rate plus 3% (approximately  17.5% and 12.4% at February 28, 2002 and
2003,  respectively).  Interest is payable semi-annually.  The Notes Payable and
accrued interest,  payable in U.S.  dollars,  are due December 31, 2003 and bear
interest at the prime rate plus 2%.


6. ACQUISITIONS, DISPOSITONS AND INVESTMENTS

     Effective May 1, 2002 Emmis completed the sale of substantially  all of the
assets of KALC-FM in Denver, Colorado to Entercom Communications Corporation for
$88.0  million.  Emmis had  purchased  KALC-FM on January 17,  2001,  from Salem
Communications  Corporation  for $98.8 million in cash plus a commitment  fee of
$1.2 million and  transaction  related  costs of $0.9  million.  On February 12,
2002, Emmis entered into a definitive  agreement to sell KALC-FM to Entercom and
Entercom began operating  KALC-FM under a time brokerage  agreement on March 16,
2002. Proceeds were used to repay amounts outstanding under our credit facility.
The  assets  of  KALC-FM  are  reflected  as held for  sale in the  accompanying
consolidated  balance sheet as of February 28, 2002. Since the agreed-upon sales
price for this  station was less than its  carrying  amount as of  February  28,
2002,  we  recognized  an  impairment  loss  of $9.1  million  in  fiscal  2002.

<PAGE>

Additionally,  in fiscal 2003 we recorded an  incremental  $1.3  million loss in
connection  with the sale. The $87.7 million of credit facility debt repaid with
the net  proceeds  of the  sale  is  reflected  as a  current  liability  in the
accompanying consolidated balance sheet as of February 28, 2002.

     Effective May 1, 2002 Emmis completed the sale of substantially  all of the
assets of KXPK-FM in Denver, Colorado to Entravision  Communications Corporation
for $47.5 million.  Emmis had purchased  KXPK-FM on August 24, 2000,  from AMFM,
Inc. for an allocated  purchase price of $35.0 million in cash plus  liabilities
recorded of $1.2 million and  transaction  related costs of $0.4 million.  Emmis
entered into a definitive  agreement to sell KXPK-FM to  Entravision on February
12,  2002.  Proceeds  were used to repay  amounts  outstanding  under our credit
facility.  In fiscal 2003 we recorded a gain on sale of assets of $10.2 million.
The  assets  of  KXPK-FM  are  reflected  as held for  sale in the  accompanying
consolidated  balance sheet as of February 28, 2002. The $47.3 million of credit
facility debt repaid with the net proceeds of the sale is reflected as a current
liability  in the  accompanying  consolidated  balance  sheet as of February 28,
2002.

     On March 28, 2001, Emmis completed its acquisition of substantially  all of
the assets of radio stations  KTAR-AM,  KMVP-AM and KKLT-FM in Phoenix,  Arizona
from Hearst-Argyle Television, Inc. for $160.0 million in cash, plus transaction
related costs of $0.7 million.  The Company  financed the acquisition  through a
$20.0 million  advance  payment  borrowed under the credit facility in June 2000
and the remainder with  borrowings  under the credit  facility and proceeds from
ECC's March 2001 senior discount notes  offering.  The acquisition was accounted
for as a purchase.  Emmis began programming and selling advertising on the radio
stations on August 1, 2000 under a time brokerage agreement.  The total purchase
price was allocated to property and equipment and broadcast licenses based on an
appraisal.   Broadcast  licenses  are  included  in  intangible  assets  in  the
accompanying  consolidated  balance sheets and,  effective March 1, 2002, are no
longer amortized in the consolidated statements of operations in accordance with
SFAS No. 142.

     On January 15,  2001,  Emmis  entered into an agreement to sell WTLC-AM and
the intellectual property of WTLC-FM (both located in Indianapolis,  Indiana) to
Radio One, Inc., for $8.0 million. The FM sale occurred on February 15, 2001 and
the AM sale occurred on April 25, 2001.  Emmis retained the FCC license at 105.7
and reformatted the station as WYXB-FM.

     On October 6, 2000, Emmis acquired certain assets of radio stations WIL-FM,
WRTH-AM,  WVRV-FM,  KPNT-FM, KXOK-FM (reformatted as KFTK-FM) and KIHT-FM in St.
Louis,  Missouri from Sinclair Broadcast Group, Inc. for $220.0 million in cash,
plus  transaction  related costs of $10.9 million (the "Sinclair  Acquisition").
The  agreement  also  included the  settlement  of  outstanding  lawsuits by and
between Emmis and Sinclair. The settlement resulted in no gain or loss by either
party.  This  acquisition was financed  through  borrowings  under Emmis' credit
facility  and was  accounted  for as a purchase.  The total  purchase  price was
allocated  to  property  and  equipment  and  broadcast  licenses  based  on  an
appraisal.   Broadcast  licenses  are  included  in  intangible  assets  in  the
accompanying  consolidated  balance sheets and,  effective March 1, 2002, are no
longer amortized in the consolidated statements of operations in accordance with
SFAS No. 142.

     On October 6, 2000,  Emmis  acquired  certain  assets of KZLA-FM (the "KZLA
Acquisition")   in  Los  Angeles,   California  from  Bonneville   International
Corporation in exchange for radio stations  WIL-FM,  WRTH-AM and WVRV-FM,  which
Emmis  acquired  from  Sinclair,  as well as radio  station  WKKX-FM which Emmis
already owned (all in the St. Louis,  Missouri market).  Since the fair value of
WKKX exceeded the book value of the station at the date of the  exchange,  Emmis
recorded  a gain on  exchange  of assets  of $22.0  million.  The fair  value of
WKKX-FM was determined by an  independent  appraiser.  In connection  therewith,
tangible  assets were valued using  either  replacement  cost or current  market
value,  depending  on  the  asset  being  valued.   Intangible  assets  with  an
identifiable revenue stream were valued using discounted cash flows.  Intangible
assets not  producing a readily  identifiable  income  stream were valued  using
residual  fair market value.  This gain is included in other income,  net in the
accompanying consolidated statements of operations.  From August 1, 2000 through
the  date  of  acquisition,  Emmis  operated  KZLA-FM  under  a  time  brokerage
agreement.  The exchange was  accounted  for as a purchase.  The total  purchase
price of $185.0  million was  allocated to property and  equipment and broadcast
licenses  based on an appraisal.  Broadcast  licenses are included in intangible
assets in the accompanying  consolidated  balance sheets and, effective March 1,
2002, are no longer  amortized in the  consolidated  statements of operations in
accordance with SFAS No. 142.

     Effective  October 1, 2000 (closed October 2, 2000),  Emmis purchased eight
network-affiliated and seven satellite television stations from Lee Enterprises,
Inc.  for $559.5  million in cash,  the  payment of $21.3  million  for  working
capital and transaction  related costs of $2.2 million (the "Lee  Acquisition").
In connection with the acquisition, Emmis recorded $31.3 million of deferred tax
liabilities and $17.5 million in contract  liabilities.  Also,  Emmis recorded a
severance  related  liability of $1.8  million,  of which $1.3  million  remains
outstanding  as of February  28, 2003.  This  transaction  was financed  through
borrowings under Emmis' credit facility and was accounted for as a purchase. The
Lee Acquisition consisted of the following stations:
<PAGE>

     -    KOIN-TV (CBS) in Portland, Oregon

     -    KRQE-TV (CBS) in Albuquerque, New Mexico (including satellite stations
          KBIM-TV,     Roswell,    New    Mexico    and    KREZ-TV,     Durango,
          Colorado-Farmington, New Mexico)

     -    WSAZ-TV (NBC) in Charleston-Huntington, West Virginia

     -    KSNW-TV  (NBC)  in  Wichita,   Kansas  (including  satellite  stations
          KSNG-TV, Garden City, Kansas, KSNC-TV, Great Bend, Kansas and KSNK-TV,
          Oberlin, Kansas-McCook, Nebraska)

     -    KGMB-TV  (CBS)  in  Honolulu,  Hawaii  (including  satellite  stations
          KGMD-TV, Hilo, Hawaii and KGMV-TV, Wailuku, Hawaii)

     -    KGUN-TV (ABC) in Tucson, Arizona

     -    KMTV-TV (CBS) in Omaha, Nebraska and

     -    KSNT-TV (NBC) in Topeka, Kansas.

     The  total   purchase  price  was  allocated  to  property  and  equipment,
television program rights,  working capital related items and broadcast licenses
based on an appraisal.  Broadcast  licenses are included in intangible assets in
the accompanying  consolidated  balance sheets and, effective March 1, 2002, are
no longer amortized in the  consolidated  statements of operations in accordance
with SFAS No. 142.

     Because we already  own  KHON-TV in  Honolulu,  and both KHON and KGMB were
rated  among  the top four  television  stations  in the  Honolulu  market,  FCC
regulations  prohibited  us from owning both  stations.  However,  we received a
temporary  waiver from the FCC that has allowed us to operate both stations (and
their  related  "satellite"   stations).   As  a  result  of  recent  regulatory
developments,  we have requested a stay of  divestiture  until the FCC completes
its biennial review. We are currently awaiting the FCC's decision. No assurances
can be given that the FCC will grant us the stay of divestiture  and we may need
to sell one of the two stations in Hawaii.

     On August 24, 2000,  Emmis acquired the assets of radio station  KKFR-FM in
Phoenix,  Arizona from AMFM,  Inc. for an allocated  $72.0 million in cash, plus
transaction  related  costs of $0.5  million  (the  "AMFM  Acquisition").  Emmis
financed the  acquisition  through  borrowings  under its credit  facility.  The
acquisition  was  accounted  for as a  purchase.  The total  purchase  price was
allocated  to  property  and  equipment  and  broadcast  licenses  based  on  an
appraisal.   Broadcast  licenses  are  included  in  intangible  assets  in  the
accompanying  consolidated  balance sheets and,  effective March 1, 2002, are no
longer amortized in the consolidated statements of operations in accordance with
SFAS No. 142.

     In May,  2000,  Emmis made an offer to purchase the stock of a company that
owns and  operates  WALR-FM in Atlanta,  Georgia.  Because an  affiliate  of Cox
Radio, Inc. held a right of first refusal to purchase WALR-FM,  Emmis' offer was
made on the condition  that Emmis would receive a $17.0 million  break-up fee if
WALR-FM was sold pursuant to the right of first refusal.  In June, 2000, the Cox
affiliate  submitted  an offer to  purchase  WALR-FM  under  the  right of first
refusal and an application to transfer the station's FCC licenses was filed with
the FCC. Emmis received the break-up fee upon the closing of the sale of WALR-FM
under the right of first refusal on August 31, 2000,  which is included in other
income in the accompanying consolidated statements of operations.

     On March 3, 2000,  Emmis acquired all of the  outstanding  capital stock of
Los Angeles Magazine Holding Company,  Inc. for  approximately  $36.8 million in
cash plus  liabilities  recorded  of $2.7  million  (the "Los  Angeles  Magazine
Acquisition").   Los  Angeles  Magazine  Holding   Company,   Inc.,   through  a
wholly-owned  subsidiary,  owns and operates Los Angeles,  a city magazine.  The
acquisition was accounted for as a purchase and was financed through  additional
borrowings under its credit facility.  The excess of the purchase price over the
estimated fair value of identifiable assets was $36.0 million, which is included
in  intangible  assets in the  accompanying  consolidated  balance  sheets  and,
effective March 1, 2002, are no longer amortized in the consolidated  statements
of operations in accordance with SFAS No. 142.

7. INTANGIBLE ASSETS AND GOODWILL

     Effective  March 1, 2002, the Company  adopted SFAS No. 142,  "Goodwill and
Other  Intangible  Assets,"  which  requires  the  Company  to cease  amortizing
goodwill  and certain  intangibles.  Instead,  these  assets will be reviewed at
least annually for  impairment,  and will be written down and charged to results
of  operations  in periods in which the  recorded  value of goodwill and certain
intangibles  is more than its fair value.  On February  28,  2002,  prior to the
adoption  of SFAS No.  142,  the  Company  reflected  unamortized  goodwill  and
unamortized FCC licenses in the amounts of $175.1 million and $1,743.2  million,
respectively.  FCC licenses are renewed  every eight years for a nominal  amount
and  historically  all of our FCC licenses have been renewed at the end of their
respective eight-year periods. Since we expect that all of our FCC licenses will
continue to be renewed in the future, we believe they have indefinite lives. The
Company had previously amortized these assets over the maximum period allowed of

<PAGE>

40  years.  Adoption  of  this  accounting  standard  eliminated  the  Company's
amortization expense for goodwill and FCC licenses. For comparison purposes, for
the years ended  February 28, 2001 and 2002, the Company  recorded  amortization
expense  for  goodwill  and FCC  licenses of $39.5  million  and $58.2  million,
respectively.

     The following  unaudited pro forma summary presents the Company's  estimate
of the effect of the adoption of SFAS No. 142 as of the beginning of the periods
presented.  Reported  income (loss)  before  extraordinary  loss and  accounting
change and reported net loss  available  to common  shareholder  are adjusted to
eliminate  the  amortization  expense  recognized  in those  periods  related to
goodwill  and FCC  licenses  as these  assets are not  amortized  under this new
accounting standard.

EMMIS

<TABLE>
<CAPTION>

(Dollars in thousands, except per share data)
                                                                                  Years ended February 28,
                                                                            2001             2002              2003
                                                                            ----             ----              ----
<S>                                                                       <C>             <C>                <C>
Reported income (loss) before extraordinary loss
     and accounting change                                                $ 13,736        $ (63,024)         $ 14,049
Add back:  amortization of goodwill, net of tax
     provision of $2,119 and $2,343 for the years
     ended February 28, 2001 and 2002                                        4,560            5,348                 -
Add back:  amortization of FCC licenses,
     net of tax provision of $10,427 and $15,378 for the years
     ended February 28, 2001 and 2002                                       22,434           35,098                 -
Adjusted income (loss) before extraordinary loss                          --------        ---------          --------
     and accounting change                                                $ 40,730        $ (22,578)         $ 14,049
                                                                          ========        =========          ========

Reported net income (loss) available to common shareholders                $ 4,752        $ (73,092)       $ (173,452)
Add back:  amortization of goodwill, net of tax
     provision of $2,119 and $2,343 for the years
     ended February 28, 2001 and 2002                                        4,560            5,348                 -
Add back:  amortization of FCC licenses,
     net of tax provision of $10,427 and $15,378 for the years
     ended February 28, 2001 and 2002                                       22,434           35,098                 -
                                                                          --------        ---------        ----------
Adjusted net income (loss) available to common shareholders               $ 31,746        $ (32,646)       $ (173,452)
                                                                          ========        =========        ==========

Basic net loss available to common shareholders:
     Reported net income (loss) available to common shareholders            $ 0.10          $ (1.54)          $ (3.27)
     Amortization of goodwill, net of taxes                                   0.10             0.11                 -
     Amortization of FCC licenses, net of taxes                               0.48             0.74                 -
                                                                            ------          -------           -------
     Adjusted net income (loss) available to common shareholders            $ 0.68          $ (0.69)          $ (3.27)
                                                                            ======          =======           =======

Diluted net loss available to common shareholders:
     Reported net income (loss) available to common shareholders            $ 0.10          $ (1.54)          $ (3.27)
     Amortization of goodwill, net of taxes                                   0.09             0.11                 -
     Amortization of FCC licenses, net of taxes                               0.47             0.74                 -
                                                                            ------          -------           -------
     Adjusted net income (loss) available to common shareholders            $ 0.66          $ (0.69)          $ (3.27)
                                                                            ======          =======           =======

     Basic Shares                                                           46,869           47,334            53,014
     Diluted Shares                                                         47,940           47,334            53,014

</TABLE>


<PAGE>



         EOC

                                    <TABLE>
<CAPTION>
(Dollars in thousands)                                                   Years Ended Feburary 28,
                                                                   2001             2002            2003
                                                                   ----             ----            ----
<S>                                                              <C>              <C>             <C>
Reported income (loss) before extraordinary
     loss and accounting change                                  $ 13,736         $(46,802)       $ 30,724
Add back:  amortization of goodwill, net of tax
     provision of $2,119 and $2,343 for the years
     ended February 28, 2001 and 2002                               4,560            5,348               -
Add back:  amortization of FCC licenses, net of
     tax provision of $10,427 and $15,378 for the
     years ended February 28, 2001 and 2002                        22,434           35,098               -
                                                                 --------         --------        --------
Adjusted income before extraordinary
     loss and accounting change                                  $ 40,730         $ (6,356)       $ 30,724
                                                                 ========         ========        ========

Reported net income (loss)                                       $ 13,736         $(47,886)      $(139,565)
Add back:  amortization of goodwill, net of tax
     provision of $2,119 and $2,343 for the years
     ended February 28, 2001 and 2002                               4,560            5,348               -
Add back:  amortization of FCC licenses, net of
     tax provision of $10,427 and $15,378 for the
     years ended February 28, 2001 and 2002                        22,434           35,098               -
                                                                 --------         --------        --------
Adjusted net income (loss)                                       $ 40,730         $ (7,440)      $(139,565)
                                                                 ========         ========       =========
</TABLE>


Because EOC is a wholly-owned subsidiary of Emmis, per share data is excluded.


<PAGE>



         Indefinite-lived Intangibles

     Under  the  guidance  in SFAS No.  142,  the  Company's  FCC  licenses  are
considered  indefinite-lived  intangibles.   These  assets,  which  the  Company
determined  were its  only  indefinite-lived  intangibles,  are not  subject  to
amortization,  but  will be  tested  for  impairment  at least  annually.  As of
February 28, 2003 and 2002 (prior to the adoption of SFAS No. 142), the carrying
amounts of the  Company's  FCC  licenses  were  $1,508.9  million  and  $1,743.2
million, respectively.

     In accordance with SFAS No. 142, the Company tested these  indefinite-lived
intangible  assets for  impairment  as of March 1, 2002 by comparing  their fair
value to  their  carrying  value at that  date.  Prior  to  March  1,  2002,  an
impairment  adjustment was recorded if the carrying value of an intangible asset
exceeded its estimated  undiscounted cash flows in accordance with SFAS No. 121.
Upon  adoption of SFAS No. 142,  the Company  recognized  impairment  on its FCC
licenses of approximately  $145.0 million,  net of $88.8 million in tax benefit,
which is recorded as a component of the cumulative  effect of accounting  change
during the year ended  February 28,  2003.  Approximately  $14.8  million of the
charge,  net of tax,  related to our radio  segment  and  $130.2  million of the
charge, net of tax, related to our television segment. The fair value of our FCC
licenses used to calculate the  impairment  charge was determined by management,
using an  enterprise  valuation  approach.  Enterprise  value was  determined by
applying an estimated  market  multiple to the broadcast  cash flow generated by
each  reporting  unit.  Market  multiples were  determined  based on information
available  regarding  publicly  traded peer  companies,  recently  completed  or
contemplated  transactions within the industry, and reporting units' competitive
position in their  respective  markets.  Appropriate  allocation was made to the
tangible assets with the residual amount  representing  the estimated fair value
of our  indefinite  lived  intangible  assets  and  goodwill.  To the extent the
carrying amount of the indefinite-lived  intangible exceeded its fair value, the
difference was recorded in the statement of operations,  as described  above. In
the case of radio,  the Company  determined  the reporting unit to be all of our
stations in a local market,  and in the case of television and  publishing,  the
Company determined the reporting unit to be each individual station or magazine.
Throughout our fiscal 2002,  unfavorable  economic  conditions  persisted in the
industries in which the Company engages.  These  conditions  caused customers to
reduce the amount of advertising  dollars spent on the Company's media inventory
as compared to prior periods, adversely impacting the cash flow projections used
to determine the fair value of each reporting unit and public trading  multiples
of media stocks,  resulting in the write-off of a portion of the carrying amount
of our FCC licenses. The required impairment tests may result in future periodic
write-downs,  but the annual  impairment test for fiscal 2003,  completed in the
fourth quarter, did not result in any further write-downs.

         Goodwill

     SFAS No. 142 requires the Company to test goodwill for  impairment at least
annually  using a two-step  process.  The first  step is a screen for  potential
impairment, while the second step measures the amount of impairment. The Company
completed  the initial  two-step  impairment  test  during the first  quarter of
fiscal 2003.  As a result of this test,  the Company  recognized  impairment  of
approximately $22.4 million, net of $13.8 million in tax benefit, as a component
of the cumulative  effect of an accounting change during the year ended February
28, 2003.  Approximately $18.5 million of the charge, net of tax, related to our
television  segment and $3.9 million of the charge,  net of tax,  related to our
publishing  segment.  Consistent with the Company's  approach to determining the
fair value of our FCC licenses,  the enterprise  valuation  approach was used to
determine the fair value of each of the Company's reporting units, and a portion
of the carrying value of our goodwill was  written-off due to reductions in cash
flow and public trading multiples of media stocks resulting from the unfavorable
economic conditions that reduced advertising  expenditures throughout our fiscal
2002.  As of February 28, 2003 and 2002 (prior to the adoption of SFAS No. 142),
the carrying  amount of the  Company's  goodwill  was $139.0  million and $175.1
million,  respectively.  The  required  impairment  tests  may  result in future
periodic write-downs,  but the annual impairment test for fiscal 2003, completed
in the fourth quarter, did not result in any further write-downs.

         Definite-lived intangibles

     The Company has definite-lived  intangible assets recorded that continue to
be amortized in accordance with SFAS No. 142. These assets consist  primarily of
foreign broadcasting licenses,  subscription lists, lease rights, customer lists
and non-compete  agreements,  all of which are amortized over the period of time
the assets are expected to  contribute  directly or  indirectly to the Company's
future cash flows. In accordance with the transitional  requirements of SFAS No.
142, the Company reassessed the useful lives of these intangibles and determined
that no changes  to their  useful  lives were  necessary.  The  following  table
presents the gross carrying amount and accumulated  amortization  for each major
class of definite-lived  intangible asset at February 28, 2002 and 2003 (dollars
in thousands):



<PAGE>



<TABLE>
<CAPTION>
                                             February 28, 2002                             February 28, 2003
                                          ------------------------                        ---------------------
                                     Gross                        Net              Gross                        Net
                                   Carrying     Accumulated     Carrying          Carrying    Accumulated     Carrying
                                    Amount     Amortization      Amount            Amount     Amortization     Amount
                                    ------     ------------      ------            ------     ------------     ------
<S>                               <C>              <C>         <C>               <C>            <C>          <C>
Foreign Broadcasting Licenses     $ 22,542         $ 8,694     $ 13,848          $ 23,178       $ 10,993     $ 12,185
Subscription Lists                  12,189          11,077        1,112            12,189         12,176           13
Lease Rights                        11,502             407       11,095            11,502            695       10,807
Customer Lists                       7,371           1,734        5,637             7,371          4,336        3,035
Non-Compete Agreements               5,738           5,561          177             5,738          5,601          137
Other                                4,335           1,240        3,095             4,211          1,527        2,684
                                     -----           -----        -----             -----          -----        -----
  TOTAL                           $ 63,677        $ 28,713     $ 34,964          $ 64,189       $ 35,328     $ 28,861
                                  ========        ========     ========          ========       ========     ========

</TABLE>


     Total amortization  expense from  definite-lived  intangibles for the years
ended February 28, 2001,  2002 and 2003 was $9.5 million,  $7.8 million and $7.1
million,  respectively.  The following table presents the Company's  estimate of
amortization   expense  for  each  of  the  five  succeeding  fiscal  years  for
definite-lived  intangibles  recorded  on our  books  as of  February  28,  2003
(dollars in thousands):

FISCAL YEAR ENDED FEBRUARY,
2004                         $ 4,797
2005                           2,616
2006                           2,175
2007                           2,147
2008                           2,131



8. EMPLOYEE BENEFIT PLANS

     a.   1994 Equity Incentive Plan

     At the 1994 annual  meeting,  the  shareholders  of Emmis approved the 1994
Equity Incentive Plan. Under this Plan, awards equivalent to 2,000,000 shares of
common stock may be granted. The awards, which have certain restrictions, may be
for incentive stock options,  nonqualified  stock options,  shares of restricted
stock,   stock   appreciation   rights,   performance  units  or  limited  stock
appreciation  rights.  Under this Plan,  all awards are granted with an exercise
price  equal  to the fair  market  value  of the  stock  except  for  shares  of
restricted  stock which may be granted with a purchase price at amounts  greater
than or equal to the par value of the underlying  stock.  No more than 1,000,000
shares of Class B common stock are available  for grant and issuance  under this
Plan.  The stock options under this Plan are generally not  exercisable  for one
year  after the date of grant and expire not more than 10 years from the date of
grant.  Under this Plan,  awards equivalent to 22,000 shares of common stock are
available for grant at February 28, 2003.  Certain stock options  awarded remain
outstanding as of February 28, 2002 and 2003.

     b.   1995 Equity Incentive Plan

     At the 1995 annual  meeting,  the  shareholders  of Emmis approved the 1995
Equity Incentive Plan. Under this Plan, awards equivalent to 1,300,000 shares of
common stock may be granted pursuant to employment  agreements.  Under the Plan,
no further  awards are available  for grant at February 28, 2003.  Certain stock
options awarded remain outstanding as of February 28, 2002 and 2003.

     c.   Non-Employee Director Stock Option Plan

     At  the  1995  annual  meeting,   the  shareholders  of  Emmis  approved  a
Non-Employee  Director  Stock Option Plan.  Under this Plan,  each  non-employee
director, as of January 24, 1995, was granted an option to acquire 10,000 shares
of the Company's Class A common stock. Thereafter,  upon election or appointment
of  any  non-employee   director  or  upon  a  continuing  director  becoming  a
non-employee  director,  such  individual will also become eligible to receive a
comparable  option.  In addition,  an  equivalent  option will be  automatically
granted on an annual basis to each non-employee director. All awards are granted
with an exercise  price equal to the fair market  value of the stock on the date
of grant.  Under this Plan, awards equivalent to 20,000 shares of Class A common
stock are  available  for grant at February  28,  2003.  Certain  stock  options
awarded remain outstanding as of February 28, 2002 and 2003.


<PAGE>



     d.   1997 Equity Incentive Plan

     At the 1997 annual  meeting,  the  shareholders  of Emmis approved the 1997
Equity Incentive Plan. Under this plan, awards equivalent to 2,000,000 shares of
common stock may be granted. The awards, which have certain restrictions, may be
for incentive stock options,  nonqualified  stock options,  shares of restricted
stock,  stock  appreciation  rights or performance  units.  Under this Plan, all
awards are granted  with a purchase  price equal to the fair market value of the
stock  except  for  shares of  restricted  stock  which may be  granted  with an
exercise  price  at  amounts  greater  than or  equal  to the par  value  of the
underlying  stock.  No more than  1,000,000  shares of Class B common  stock are
available for grant and issuance  under this Plan.  The stock options under this
Plan are  generally  not  exercisable  for one year  after the date of grant and
expire  not more than 10 years from the date of grant.  Under this Plan,  awards
equivalent to 154,000 shares of common stock are available for grant at February
28, 2003.  Certain stock options and restricted stock awarded remain outstanding
as of February 28, 2002 and 2003.

     e.   1999 Equity Incentive Plan

     At the 1999 annual  meeting,  the  shareholders  of Emmis approved the 1999
Equity Incentive Plan. Under this plan, awards equivalent to 3,000,000 shares of
common stock may be granted. The awards, which have certain restrictions, may be
for incentive stock options,  nonqualified  stock options,  shares of restricted
stock,  stock  appreciation  rights or performance  units.  Under this Plan, all
awards are granted  with a purchase  price equal to the fair market value of the
stock  except  for  shares of  restricted  stock  which may be  granted  with an
exercise  price  at  amounts  greater  than or  equal  to the par  value  of the
underlying  stock.  No more than  1,000,000  shares of Class B common  stock are
available for grant and issuance  under this Plan.  The stock options under this
Plan are  generally  not  exercisable  for one year  after the date of grant and
expire  not more than 10 years from the date of grant.  Under this Plan,  awards
equivalent to 232,000 shares of common stock are available for grant at February
28, 2003.  Certain stock options and restricted stock awarded remain outstanding
as of February 28, 2002 and 2003.

     f.   2001 Equity Incentive Plan

     At the 2001 annual  meeting,  the  shareholders  of Emmis approved the 2001
Equity Incentive Plan. Under this plan, awards equivalent to 3,000,000 shares of
common stock may be granted. The awards, which have certain restrictions, may be
for incentive stock options,  nonqualified  stock options,  shares of restricted
stock,  stock  appreciation  rights or performance  units.  Under this Plan, all
awards are granted  with a purchase  price equal to the fair market value of the
stock  except  for  shares of  restricted  stock  which may be  granted  with an
exercise price, if any, at amounts greater than or equal to the par value of the
underlying  stock.  No more than  1,000,000  shares of Class B common  stock are
available for grant and issuance  under this Plan.  The stock options under this
Plan generally expire not more than 10 years from the date of grant.  Under this
Plan,  awards  equivalent to 1,617,000  shares of common stock are available for
grant at February  28,  2003.  Certain  stock awards  remain  outstanding  as of
February 28, 2002 and 2003.

     g.   2002 Equity Compensation Plan

     At the 2002 annual  meeting,  the  shareholders  of Emmis approved the 2002
Equity Compensation Plan. Under this plan, awards equivalent to 3,000,000 shares
of common stock may be granted. The awards, which have certain restrictions, may
be for incentive stock options, nonqualified stock options, shares of restricted
stock,  stock  appreciation  rights or performance  units.  Under this Plan, all
awards are granted  with a purchase  price equal to the fair market value of the
stock  except  for  shares of  restricted  stock  which may be  granted  with an
exercise price, if any, at amounts greater than or equal to the par value of the
underlying  stock.  No more than  1,000,000  shares of Class B common  stock are
available for grant and issuance  under this Plan.  The stock options under this
Plan generally expire not more than 10 years from the date of grant.  Under this
Plan,  awards  equivalent to 2,550,000  shares of common stock are available for
grant at February  28,  2003.  Certain  stock awards  remain  outstanding  as of
February 28, 2003.


<PAGE>



     h.   Other Disclosures Related to Stock Option and Equity Incentive Plans

     A summary of the status of options and  restricted  stock at February 2001,
2002, and 2003 and the related activity for the year is as follows:


<TABLE>
<CAPTION>
                                                      2001                             2002                           2003
                                                      ----                             ----                           ----
                                             Number of     Weighted         Number of       Weighted       Number of     Weighted
                                             Options/       Average          Options/       Average        Options/       Average
                                            Restricted     Exercise         Restricted      Exercise      Restricted     Exercise
                                               Stock         Price            Stock          Price          Stock         Price
                                               -----         -----            -----          -----          -----         -----
<S>                                            <C>                          <C>                            <C>
Outstanding at Beginning of Year              4,559,168      18.07         4,144,793        23.14         4,753,513       25.39
Granted                                         814,629      34.66         1,089,369        29.01         1,926,228       14.96
Exercised                                    (1,092,688)      9.78          (250,420)       17.56          (311,234)      17.90
Lapsing of restrictions on stock awards        (101,805)         -          (190,162)           -          (920,571)          -
Expired and other                               (34,511)     20.32           (40,067)       23.68          (188,457)      25.75
Outstanding at End of Year                    4,144,793       23.14        4,753,513        25.39         5,259,479       26.53
Exercisable at End of Year                    2,008,680       19.26        2,464,827        21.10         2,602,475       23.90
Total Available for Grant                     1,382,000                    3,333,000                      4,595,000

</TABLE>


     During the years ended  February  2001,  2002 and 2003,  all  options  were
granted  with an exercise  price equal to fair market  value of the stock on the
date of grant.  During  fiscal  2001,  2002 and 2003,  the Company  entered into
employment  agreements  providing for grants of 9,200, 26,190 and 22,500 shares,
respectively,  at a weighted  average  fair value of $35.51,  $27.57 and $27.16,
respectively.

     The following information relates to options outstanding and exercisable at
February 28, 2003:

                        Options Outstanding                Options Exercisable
                  --------------------------------       -----------------------
                              Weighted    Weighted                      Weighted
Range of                      Average      Average                      Average
Exercise         Number of    Exercise    Remaining       Number of     Exercise
Prices            Options      Price     Contract Life     Options       Price
------            -------      -----     -------------     -------       -----
 7.60-11.40      200,000         7.75      4.0 years       200,000        7.75
11.40-15.20       10,163        14.44      0.6 years        10,163       14.44
15.20-19.00      369,972        16.55      3.0 years       369,972       16.55
19.00-22.80      852,003        21.24      2.0 years       802,003       21.33
22.80-26.60      172,528        24.63      3.0 years       172,528       24.63
26.60-30.40    2,985,426        28.76      7.8 years       601,206       28.62
30.40-34.20            -            -        - years             -           -
34.20-38.00      669,387        35.41      7.0 years       446,603       35.39


In addition to the benefit plans noted above,  Emmis has the following  employee
benefit plans:

     i.   Profit Sharing Plan

     In  December  1986,  Emmis  adopted a profit  sharing  plan that covers all
nonunion employees with six months of service.  Contributions to the plan are at
the  discretion  of the Emmis Board of Directors  and can be made in the form of
newly issued Emmis common stock or cash. Historically,  all contributions to the
plan have been in the form of Emmis  common  stock.  Contributions  reflected in
non-cash compensation in the consolidated statements of operations for the years
ended February 2001, 2002 and 2003 were $1,250, $0, and $0 respectively.

     j.   401(k) Retirement Savings Plan

     Emmis sponsors two Section  401(k)  retirement  savings  plans.  One covers
substantially  all nonunion  employees  age 18 years and older who have at least
six months of service and the other  covers  substantially  all union  employees
that meet the same  qualifications.  Employees may make pretax  contributions to
the  plans up to 15% of their  compensation,  not to  exceed  the  annual  limit
prescribed  by the  Internal  Revenue  Service.  Emmis  may  make  discretionary
matching  contributions  to the  plans  in the  form of cash  or  shares  of the
Company's  Class A common  stock.  Emmis'  contributions  to the  plans  totaled
$1,337,  $1,684 and $1,503 for the years  ended  February  2001,  2002 and 2003,
respectively.


<PAGE>



     k.   Defined Contribution Health and Retirement Plan

     Emmis  contributes  to a  multi-employer  defined  contribution  health and
retirement plan for employees who are members of a certain labor union.  Amounts
charged to expense related to the multi-employer  plan were approximately  $441,
$465, and $414 for the years ended February 2001, 2002 and 2003, respectively.

     l.   Employee Stock Purchase Plan

     The  Company  has in place an  employee  stock  purchase  plan that  allows
employees to purchase shares of the Company's Class A common stock at the lesser
of 90% of the  fair  value  of  such  shares  at the  beginning  or end of  each
semi-annual  offering period.  Purchases are subject to a maximum  limitation of
$22.5 annually per employee.  The Company does not record  compensation  expense
pursuant  to this plan as it is  designed  to meet the  requirements  of Section
423(b) of the Internal Revenue Code.


9. OTHER COMMITMENTS AND CONTINGENCIES

     a. TV Program Rights Payable

     The Company has obligations to various program syndicators and distributors
in  accordance  with current  contracts  for the rights to  broadcast  programs.
Future payments  scheduled under contracts for programs available as of February
28, 2003, are as follows:

Fiscal year ended February 28(29),
2004                                             $ 27,424
2005                                               13,516
2006                                                8,997
2007                                                4,856
2008                                                2,839
Thereafter                                          1,836
                                                    -----
                                                   59,468
Less:  Current Portion                             27,424
                                                   ------
TV Program Rights Payable,
        Net of Current Portion                   $ 32,044
                                                 ========

     In addition,  the Company has entered into  commitments  for future program
rights  (programs  not  available  as of February  28,  2003).  Future  payments
scheduled under these commitments are summarized as follows: Year ended February
2004 - $10,877,  2005 - $23,184, 2006 - $9,779, 2007 - $7,036, 2008 - $4,216 and
thereafter - $2,187.

     b. Radio Broadcast Agreements

     The Company has entered into  agreements  to broadcast  certain  syndicated
programs and sporting events.  Future payments  scheduled under these agreements
are  summarized as follows:  Year ended  February 2004 - $1,640,  2005 - $1,454,
2006 - $915, 2007 - $940,  2008 - $965 and thereafter - $80.  Expense related to
these broadcast  rights totaled $2,376,  $2,522,  and $1,771 for the years ended
February 2001, 2002, and 2003, respectively.

     c. Operating Leases

     The Company  leases  certain  office  space,  tower  space,  equipment,  an
airplane  and  automobiles  under  operating  leases  expiring at various  dates
through August 2019.  Some of the lease  agreements  contain renewal options and
annual rental escalation  clauses (generally tied to the Consumer Price Index or
increases in the lessor's operating costs), as well as provisions for payment of
utilities  and  maintenance  costs.  Maintenance  costs are  recorded  using the
accrual method.


<PAGE>



     Future  minimum  rental  payments  (exclusive of future  escalation  costs)
required by non-cancelable operating leases, with an initial term of one year or
more as of February 28, 2003, are as follows:


Fiscal year ended February 28(29),
2004                                       $ 9,494
2005                                         8,481
2006                                         6,830
2007                                         6,046
2008                                         5,646
Thereafter                                  29,604
                                            ------
                                          $ 66,101
                                          ========

     Rent  expense  totaled  $6,457,  $7,995,  and  $9,798  for the years  ended
February 2001,  2002, and 2003,  respectively.  Rent expense for the years ended
February 2001,  2002, and 2003 is net of sublease income of  approximately  $86,
$0, and $34, respectively.

     d. Employment Agreements

     The Company enters into  employment  agreements  with certain  officers and
employees.  These agreements  generally specify base salary,  along with bonuses
and grants of stock  and/or  stock  options  based on certain  criteria.  Future
minimum cash payments  scheduled under terms of these  agreements are summarized
as follows:  Year ended February 2004 - $25,743,  2005 - $13,847, 2006 - $6,112,
2007 - $1,651, 2008 - $1,038 and thereafter - $1,380.

     In addition to future cash payments,  at February 28, 2003, 7,500 shares of
common stock and options to purchase  1,169,000 shares of common stock have been
granted in connection with current employment  agreements.  Additionally,  up to
55,000  shares and options to purchase up to 413,000  shares of common stock may
be granted (or have been granted subject to forfeiture)  under the agreements in
the next two years.

     e. Litigation

     The Company is a party to various legal proceedings arising in the ordinary
course of business.  In the opinion of management  of the Company,  there are no
legal proceedings pending against the Company that are likely to have a material
adverse effect on the Company.

     In  December   2002,   Emmis  reached  an  agreement   with  the  Hungarian
broadcasting  authority,  the National Radio and Television  Board (ORTT),  that
resolved pending legal issues and extended the national license for Slager,  its
subsidiary in Hungary, through 2009. Slager agreed to pay the fees due under the
original broadcast contract in installments  through November 2004, the date the
contract was set to expire.  The license has been  extended an  additional  five
years with payment terms more  reflective of the current  Hungarian  advertising
environment.



<PAGE>


10. INCOME TAXES

     The provision (benefit) for income taxes for the years ended February 2001,
2002, and 2003, consisted of the following:

     EMMIS:


                                               2001         2002          2003
                                               ----         ----          ----
Current:
       Federal                              $  1,540    $       -     $       -
       State                                     300            -             -
                                              ------      -------        ------
                                               1,840            -             -
                                              ------      -------        ------
Deferred:
       Federal                                14,360      (25,189)       12,446
       State                                   1,450         (434)          819
                                              ------      -------        ------
                                              15,810      (25,623)       13,265
                                              ------      -------        ------
Provision (benefit) for
       income taxes                           17,650      (25,623)       13,265

Tax benefit of extraordinary item                  -         (664)       (2,389)
Tax benefit of accounting change                   -            -      (102,600)
                                              ------      -------        ------

Net provision (benefit) for income taxes    $ 17,650    $ (26,287)    $ (91,724)
                                            ========    =========     =========




     EOC:


                                               2001         2002          2003
                                               ----         ----          ----
Current:
       Federal                              $  1,540    $       -     $       -
       State                                     300            -             -
                                              ------      -------        ------
                                               1,840            -             -
                                              ------      -------        ------
Deferred:
       Federal                                14,360      (17,399)       20,773
       State                                   1,450         (434)        1,593
                                              ------      -------        ------
                                              15,810      (17,833)       22,366
                                              ------      -------        ------
Provision (benefit) for
       income taxes                           17,650      (17,833)       22,366

Tax benefit of extraordinary item                  -         (664)       (1,555)
Tax benefit of accounting change                   -            -      (102,600)
                                              ------      -------        ------
Net provision (benefit) for income taxes    $ 17,650    $ (18,497)    $ (81,789)
                                            ========    =========     =========

<PAGE>

     The provision (benefit) for income taxes for the years ended February 2001,
2002, and 2003,  differs from that computed at the Federal  statutory  corporate
tax rate as follows:

     EMMIS:


                                           2001            2002            2003
                                           ----            ----            ----
Computed income taxes at 35%            $ 10,985       $ (31,026)        $ 9,560
State income tax                           1,138            (282)            819
Nondeductible foreign losses               1,778           1,084           1,061
Nondeductible goodwill                     1,537           2,637               -
Nondeductible interest                         -             616             695
Other                                      2,212           1,348           1,130
                                           -----           -----           -----
Provision (benefit) for income taxes    $ 17,650       $ (25,623)       $ 13,265
                                        ========       =========        ========

      EOC:


                                            2001           2002           2003
                                            ----           ----           ----
Computed income taxes at 35%             $ 10,985      $ (22,620)      $ 18,582
State income tax                            1,138           (282)         1,593
Nondeductible foreign losses                1,778          1,084          1,061
Nondeductible goodwill                      1,537          2,637              -
Nondeductible interest                          -              -              -
Other                                       2,212          1,348          1,130
                                            -----          -----          -----
Provision (benefit) for income taxes     $ 17,650      $ (17,833)      $ 22,366
                                         ========      =========       ========

<PAGE>


     The  components  of deferred  tax assets and deferred  tax  liabilities  at
February 2002 and 2003 are as follows:

     EMMIS:

                                                   2002                2003
                                                   ----                ----
Deferred tax assets:
     Net operating loss carryforwards           $ 44,443            $ 61,929
     Compensation relating to stock options        5,601               6,660
     Noncash interest expense                      8,412              14,250
     Impairment loss                               3,444                   -
     Other                                         8,731               6,452
     Valuation allowance                          (2,017)             (5,031)
                                                  ------              ------
         Total deferred tax assets                68,614              84,260
                                                  ------              ------
Deferred tax liabilities
     Intangible assets                          (167,130)           (103,700)
     Other                                        (2,682)             (2,905)
                                                  ------              ------
         Total deferred tax liabilities         (169,812)           (106,605)
                                                  ------              ------
         Net deferred tax liabilities         $ (101,198)          $ (22,345)
                                              ==========           =========


     EOC:

                                                   2002                2003
                                                   ----                ----
Deferred tax assets:
     Net operating loss carryforwards           $ 45,065            $ 58,454
     Compensation relating to stock options        5,601               6,660
     Noncash interest expense                          -                   -
     Impairment loss                               3,444                   -
     Other                                         8,731               6,452
     Valuation allowance                          (2,017)             (5,031)
                                                  ------              ------
         Total deferred tax assets                60,824              66,535
                                                  ------              ------
Deferred tax liabilities
     Intangible assets                          (167,130)           (103,700)
     Other                                        (2,682)             (2,905)
                                                  ------              ------
         Total deferred tax liabilities         (169,812)           (106,605)
                                                --------            --------
         Net deferred tax liabilities         $ (108,988)          $ (40,070)
                                              ==========           =========


     A valuation allowance is provided when it is more likely than not that some
portion of the deferred tax asset will not be  realized.  A valuation  allowance
has been  provided  for the net  operating  loss  carryforwards  related  to the
Company's foreign  subsidiaries  since these subsidiaries have not yet generated
taxable  income  against  which  the net  operating  losses  could be  utilized.
Additionally a valuation  allowance has been provided for the net operating loss
carryforwards related to certain state net operating losses as it is more likely
than  not  that  a  portion  of the  state  net  operating  losses  will  expire
unutilized.  With  respect  to  Emmis,  the  expiration  of net  operating  loss
carryforwards,  excluding those at the Company's  Hungarian  subsidiary which do
not expire,  approximate $1,177 in fiscal 2005, $758 in fiscal 2006 and $142,654
thereafter.   With  respect  to  EOC,  the  expiration  of  net  operating  loss
carryforwards,  excluding those at the Company's  Hungarian  subsidiary which do
not expire,  approximate $1,177 in fiscal 2005, $758 in fiscal 2006 and $104,672
thereafter.



<PAGE>


11. SEGMENT INFORMATION

     The Company's  operations are aligned into three business segments:  Radio,
Television,  and  Publishing.  These business  segments are consistent  with the
Company's  management of these businesses and its financial reporting structure.
Corporate  represents  expense not  allocated to  reportable  segments.  Amounts
included in  Interactive  in prior years have been  reclassified  into the Radio
segment.  Noncash  compensation expense for fiscal 2001 and 2002 attributable to
our stations,  previously  included in Corporate,  has been  reclassified to the
appropriate business segment.

     The  Company's  segments  operate  primarily in the United  States with one
radio station  located in Hungary and two radio  stations  located in Argentina.
Total  revenues of the radio  station in Hungary  for the years  ended  February
2001,  2002,  and 2003  were  $6.2  million,  $7.2  million,  and $9.2  million,
respectively.  This station's long lived assets as of February 28, 2002 and 2003
were $6.9 million and $9.9 million,  respectively.  Total  revenues of the radio
stations in Argentina for the years ended February 2001, 2002 and 2003 were $8.4
million,  $9.5  million and $2.6  million,  respectively.  Long lived assets for
these  stations  as of February  28,  2002 and 2003 were $10.0  million and $4.7
million, respectively.

<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28, 2003          Radio          Television       Publishing       Corporate         Consolidated
----------------------------          -----          ----------       ----------       ---------         ------------
<S>                                 <C>            <C>                 <C>              <C>             <C>
Net revenues                        $ 254,818      $   234,752         $ 72,793        $       -         $  562,363
Station operating expenses,
  excluding noncash compensation      138,385          148,041           62,825                -            349,251
Corporate expenses, excluding
  noncash compensation                      -                -                -           21,359             21,359
Depreciation and amortization           8,133           28,453            1,917            4,867             43,370
Time brokerage fees                         -                -                -                -                  -
Noncash compensation                   10,151            6,528            2,358            3,491             22,528
Impairment loss and other                   -                -                -                -                  -
Restructuring fees                          -                -                -                -                  -
                                    ---------      -----------         --------         --------        -----------
Operating income (loss)             $  98,149      $    51,730         $  5,693        $ (29,717)        $  125,855
                                     ========         ========          =======        =========          =========
Total assets                        $ 898,010      $ 1,050,486         $ 81,073        $  86,844         $2,116,413
                                    =========      ===========         ========         ========        ===========

With respect to EOC, the above information would be identical,  except corporate
total assets would be $79,315 and consolidated total assets would be $2,108,884.

YEAR ENDED FEBRUARY 28, 2002           Radio          Television      Publishing       Corporate         Consolidated
----------------------------           -----          ----------      ----------       ---------         ------------
Net revenues                       $  262,077       $  206,529         $ 71,216        $       -        $   539,822
Station operating expenses,
  excluding noncash compensation      149,059          140,325           64,773                -            354,157
Corporate expenses, excluding
  noncash compensation                      -                -                -           20,283             20,283
Depreciation and amortization          33,516           53,513            8,477            4,752            100,258
Time brokerage fees                       479                -                -                -                479
Noncash compensation                    5,505            2,345              428              817              9,095
Impairment loss and other               9,063            1,609                -                -             10,672
Restructuring fees                          -                -                -              768                768
                                    ---------      -----------         --------         --------        -----------
Operating income (loss)            $   64,455       $    8,737         $ (2,462)       $ (26,620)       $    44,110
                                     ========          =======         ========        =========           ========
Total assets                       $1,037,846       $1,288,428         $ 88,913        $  94,882        $ 2,510,069
                                  ===========      ===========         ========         ========        ===========

With respect to EOC, the above information would be identical,  except corporate
total assets would be $83,952 and consolidated total assets would be $2,499,139.

YEAR ENDED FEBRUARY 28, 2001           Radio           Television     Publishing       Corporate         Consolidated
----------------------------           -----          ----------      ----------       ---------         ------------
Net revenues                        $ 242,207       $  156,993         $ 74,145        $       -         $  473,345
Station operating expenses,
  excluding noncash compensation      136,052           97,485           65,595                -            299,132
Corporate expenses, excluding
  noncash compensation                      -                -                -           17,601             17,601
Depreciation and amortization          21,475           33,574           14,941            4,028             74,018
Time brokerage fees                     7,344                -                -                -              7,344
Noncash compensation                    3,657              500              228            1,015              5,400
Impairment loss and other               2,000                -                -                -              2,000
Restructuring fees                          -                -                -            2,057              2,057
                                    ---------      -----------         --------         --------        -----------
Operating income (loss)             $  71,679       $   25,434         $ (6,619)       $ (24,701)        $   65,793
                                     ========         ========         ========        =========           ========
Total assets                        $ 920,028       $1,312,270         $ 96,550        $ 178,024         $2,506,872
                                    =========      ===========         ========        =========        ===========

</TABLE>
<PAGE>

12. RELATED PARTY TRANSACTIONS

     No loans were made to  directors,  officers  or  employees  during  periods
covered by these financial  statements.  However, one loan to Jeffrey H. Smulyan
remains  outstanding.  The approximate  amount of such loan at February 28, 2002
and 2003 was $1,117 and $1,158,  respectively.  This loan bears  interest at the
Company's  average  borrowing rate of approximately  7.6% and 5.7% for the years
ended February 2002 and 2003.

     During  the  year  ended   February   28,  2003,   the  Company   purchased
approximately  $135 in corporate  gifts and specialty items from a company owned
by the sister of Richard  Leventhal,  one of our  directors.  Also during fiscal
2003,  Emmis  made  payments  of  approximately  $162 to a company  owned by Mr.
Smulyan for use of an airplane to transport employees to various trade shows and
meetings. The Company believes that the terms of these transactions were no less
favorable to the Company than terms available from independent third parties.

     A  significant  amount of business is conducted  between EOC and its parent
company, ECC. This activity includes equity financing and certain debt financing
arrangements  as well as  reimbursement  by EOC to ECC  for  corporate  overhead
expenses.  Corporate  overhead  expenses  are third party costs  incurred in the
ordinary course of conducting  business as a parent holding company and include,
but are not  limited to, SEC filing fees and  expenses,  and legal,  accounting,
trustee and outside director fees.


13.   FINANCIAL   INFORMATION   FOR   SUBSIDIARY   GUARANTORS   AND   SUBSIDIARY
NON-GUARANTORS

     Emmis conducts a significant portion of its business through  subsidiaries.
The senior subordinated notes are fully and unconditionally guaranteed,  jointly
and severally,  by certain  direct and indirect  subsidiaries  (the  "Subsidiary
Guarantors").  As of February 28, 2003,  subsidiaries holding Emmis' interest in
its  radio  stations  in  Hungary  and  Argentina,  as  well  as  certain  other
subsidiaries conducting joint ventures with third parties, did not guarantee the
senior  subordinated  notes  (the  "Subsidiary  Non-Guarantors").  The claims of
creditors  of Emmis  subsidiaries  have  priority  over the  rights  of Emmis to
receive dividends or distributions from such subsidiaries.

     Presented below is condensed  consolidating  financial  information for the
Parent Company Only, the Subsidiary Guarantors and the Subsidiary Non-Guarantors
as of  February  28, 2002 and 2003 and for each of the three years in the period
ended February 28, 2003.

     Emmis uses the equity method with respect to investments  in  subsidiaries.
Separate financial statements for Subsidiary  Guarantors are not presented based
on management's  determination that they do not provide  additional  information
that is material to investors.



<PAGE>


                             Emmis Operating Company
                      Condensed Consolidating Balance Sheet
                             As of February 28, 2003


 <TABLE>
<CAPTION>

                                                                                         Eliminations
                                                  Parent                     Subsidiary        and
                                                  Company      Subsidiary       Non-      Consolidating
                                                   Only        Guarantors    Guarantors      Entries      Consolidated
                                                   ----        ----------    ----------      -------      ------------

CURRENT ASSETS:
<S>                                              <C>           <C>              <C>         <C>             <C>
  Cash and cash equivalents                      $     3,885    $    5,844      $  6,350   $           -    $    16,079
  Accounts receivable, net                                 -        98,799         3,546               -        102,345
  Prepaid expenses                                     2,016        13,462           118               -         15,596
  Income tax refund receivable                             -             -             -               -              -
  Other                                                  222        23,249         2,190               -         25,661
  Assets held for sale                                 ------       ------        ------           ------        ------
    Total current assets                               6,123       141,354        12,204               -        159,681

  Property and equipment, net                         35,874       186,004         1,552               -        223,430
  Intangible assets, net                               3,035     1,661,513        12,185               -      1,676,733
  Investment in affiliates                         1,874,882             -             -      (1,874,882)             -
  Other assets, net                                   52,373        13,916           926         (18,175)        49,040
                                                      ------        ------           ---         -------         ------
    Total assets                                 $ 1,972,287   $ 2,002,787      $ 26,867    $ (1,893,057)   $ 2,108,884
                                                 ===========   ===========      ========    ============    ===========

CURRENT LIABILITIES:
  Accounts payable                                $   13,161    $   18,530      $  7,835     $         -    $    39,526
  Current maturities of other long-term debt           9,976             -         7,151          (2,215)        14,912
  Current portion of TV program rights payable             -        27,424             -               -         27,424
  Accrued salaries and commissions                     3,326        10,746           175               -         14,247
  Accrued interest                                    13,844             -             -          (2,203)        11,641
  Deferred revenue                                         -        15,805             -               -         15,805
  Other                                                3,339         3,640             -               -          6,979
  Credit facility debt to be repaid with assets held
     for sale                                              -             -             -               -              -
  Liabilities associated with assets held for sale    ------        ------        ------           ------        ------
    Total current liabilities                         43,646        76,145        15,161          (4,418)       130,534

Long-term debt, net of current maturities            996,945             -             -               -        996,945
Other long-term debt, net of current maturities           41         2,412        24,391         (13,757)        13,087
TV program rights payable, net of current portion          -        32,044             -               -         32,044
Other noncurrent liabilities                          13,167         3,898           721               -         17,786
Deferred income taxes                                 40,070             -             -               -         40,070
                                                      ------        ------        ------           ------        ------
    Total liabilities                              1,093,869       114,499        40,273         (18,175)     1,230,466

SHAREHOLDER'S EQUITY:
  Common stock                                     1,027,221             -             -               -      1,027,221
  Additional paid-in capital                          95,582             -         4,393          (4,393)        95,582
  Subsidiary investment                                    -     1,564,173        20,249      (1,584,422)             -
  Retained earnings/(accumulated deficit)           (227,026)      324,115       (23,068)       (301,047)      (227,026)
  Accumulated other comprehensive loss               (17,359)            -       (14,980)         14,980        (17,359)
                                                     -------       ------        -------          ------        -------
    Total shareholder's equity                       878,418     1,888,288       (13,406)     (1,874,882)       878,418
                                                     -------     ---------       -------      ----------        -------
    Total liabilities and shareholder's equity    $1,972,287   $ 2,002,787      $ 26,867     $(1,893,057)   $ 2,108,884
                                                 ===========   ===========      ========    ============    ===========

</TABLE>
<PAGE>


                             Emmis Operating Company
                 Condensed Consolidating Statement of Operations
                      For the Year Ended February 28, 2003
<TABLE>
<CAPTION>

                                                                                                Eliminations
                                                    Parent                       Subsidiary         and
                                                    Company       Subsidiary        Non-       Consolidating
                                                     Only         Guarantors     Guarantors       Entries     Consolidated
                                                     ----         ----------     ----------       -------     ------------

<S>                                               <C>             <C>            <C>            <C>          <C>
Net revenues                                      $     923       $ 549,630      $ 11,810       $      -     $  562,363
Operating expenses:
     Station operating expenses,
         excluding noncash compensation                 702         339,176         9,373              -        349,251
     Corporate expenses, excluding
          noncash compensation                       21,359               -             -              -         21,359
     Noncash compensation                             3,491          19,037             -              -         22,528
     Depreciation and amortization                    4,867          35,519         2,984              -         43,370
                                                    -------           -----        ------           ----        -------
          Total operating expenses                   30,419         393,732        12,357              -        436,508
                                                    -------           -----        ------           ----        -------
Operating income (loss)                             (29,496)        155,898          (547)             -        125,855
                                                    -------           -----        ------           ----        -------
Other income (expense)
     Interest expense                               (77,050)           (771)         (912)           675        (78,058)
     Loss from unconsolidated affiliates             (4,544)              -             -              -         (4,544)
     Gain on sale of assets                               -           9,313             -              -          9,313
     Other income (expense), net                        983             873          (229)        (1,103)           524
                                                        ---             ---          ----         ------            ---
          Total other income (expense)              (80,611)          9,415        (1,141)          (428)       (72,765)
                                                    -------           -----        ------           ----        -------

Income (loss) before income taxes,
    extraordinary loss and accounting
    change                                         (110,107)        165,313        (1,688)          (428)        53,090

Provision (benefit) for income taxes                (40,453)         62,819             -              -         22,366
                                                    -------           -----        ------           ----        -------
Income (loss) before extraordinary loss
    and accounting change                           (69,654)        102,494        (1,688)          (428)        30,724
Extraordinary loss, net of tax                       (2,889)              -             -              -         (2,889)
Cumulative effect of accounting change,
    net of tax                                     (167,400)       (167,400)            -        167,400       (167,400)
Equity in earnings (loss) of subsidiaries           100,378               -             -       (100,378)             -
                                                    -------           -----        ------           ----        -------
Net income (loss)                                 $(139,565)      $ (64,906)     $ (1,688)      $ 66,594     $ (139,565)
                                                  =========       =========      ========       ========     ==========


</TABLE>
<PAGE>


                             Emmis Operating Company
                 Condensed Consolidating Statement of Cash Flows
                      For the Year Ended February 28, 2003

<TABLE>
<CAPTION>


                                                                                               Eliminations
                                                     Parent                      Subsidiary        and
                                                     Company      Subsidiary        Non-       Consolidating
                                                      Only        Guarantors     Guarantors      Entries        Consolidated
                                                      ----        ----------     ----------      -------        ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                 <C>             <C>            <C>            <C>          <C>
  Net income (loss)                                 $ (139,565)     $ (64,906)     $ (1,688)      $ 66,594     $ (139,565)
  Adjustments to reconcile net income (loss) to net
     cash provided (used) by operating activities -
      Cumulative effect of accounting change           167,400        167,400             -       (167,400)       167,400
      Extraordinary item                                 2,889              -             -              -          2,889
      Depreciation and amortization                      8,806         56,403         2,984              -         68,193
      Provision for bad debts                                -          4,102             -              -          4,102
      Provision (benefit) for deferred income taxes     22,366              -             -              -         22,366
      Noncash compensation                               3,491         19,037             -              -         22,528
      Gain on sale of assets                                -         (9,313)            -              -         (9,313)
      Equity in earnings of subsidiaries              (100,378)             -             -        100,378              -
      Other                                               (428)             -        (8,079)           428         (8,079)
  Changes in assets and liabilities -
      Accounts receivable                                    -        (11,657)          450              -        (11,207)
      Prepaid expenses and other current assets         (1,355)            11        (2,048)             -         (3,392)
      Other assets                                     (10,398)         6,615          (399)             -         (4,182)
      Accounts payable and accrued liabilities          (2,899)           965         2,738              -            804
      Deferred liabilities                                   -           (587)            -              -           (587)
      Other liabilities                                  1,483        (34,604)       15,353              -        (17,768)
                                                         -----        -------        ------         ------        -------
      Net cash provided (used) by investing activities (48,588)       133,466         9,311              -         94,189
                                                       -------        -------         -----         ------         ------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                   (5,354)       (25,195)            -              -        (30,549)
  Disposals of property and equipment                        -          1,752           602              -          2,354
  Proceeds from sale of assets                               -        135,500             -              -        135,500
  Other                                                 (1,004)             -             -              -         (1,004)
                                                        ------         ------          ------       ------         ------
  Net cash provided (used) by investing activities      (6,358)       112,057           602              -        106,301
                                                        ------        -------           ---         ------        -------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on long-term debt                          (260,101)             -             -              -       (260,101)
  Proceeds from long-term debt                          15,000              -             -              -         15,000
  Intercompany                                         306,686       (244,649)       (4,955)             -         57,082
  Debt related costs                                    (2,754)             -             -              -         (2,754)
                                                        ------         ------        ------         ------         ------
  Net cash provided (used) by investing activities      58,831       (244,649)       (4,955)             -       (190,773)
                                                        ------       --------        ------         ------       --------
INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                            3,885            874         4,958              -          9,717

CASH AND CASH EQUIVALENTS:
  Beginning of period                                        -          4,970         1,392              -          6,362
                                                         -----          -----         -----          -----          -----
  End of period                                     $    3,885      $   5,844      $  6,350       $      -      $  16,079
                                                       =======        =======       =======        =======       ========

</TABLE>




                                     <PAGE>


                             Emmis Operating Company
                      Condensed Consolidating Balance Sheet
                             As of February 28, 2002

<TABLE>
<CAPTION>
                                                                                            Eliminations
                                                   Parent                     Subsidiary        and
                                                  Company       Subsidiary       Non-      Consolidating
                                                    Only        Guarantors    Guarantors      Entries      Consolidated
                                                    ----        ----------    ----------      -------      ------------
CURRENT ASSETS:
<S>                                               <C>            <C>              <C>        <C>             <C>
  Cash and cash equivalents                       $         -    $     4,970      $  1,392   $          -    $     6,362
  Accounts receivable, net                                  -         91,244         3,996              -         95,240
  Prepaid expenses                                        612         14,049           186              -         14,847
  Income tax refund receivable                              -              -             -              -              -
  Other                                                   271         23,312            74              -         23,657
  Assets held for sale                                      -        123,416             -              -        123,416
                                                       ------         ------           ---         ------         ------
    Total current assets                                  883        256,991         5,648              -        263,522

  Property and equipment, net                          35,957        192,690         2,492              -        231,139
  Intangible assets, net                                5,637      1,933,846        13,848              -      1,953,331
  Investment in affiliates                          2,274,321              -             -     (2,274,321)             -
  Other assets, net                                    43,428         12,655           527         (5,463)        51,147
                                                       ------         ------           ---         ------         ------
    Total assets                                  $ 2,360,226    $ 2,396,182      $ 22,515   $ (2,279,784)   $ 2,499,139
                                                  ===========    ===========      ========   ============    ===========

CURRENT LIABILITIES:
  Accounts payable                                $    15,646    $    18,373      $  4,976   $          -    $    38,995
  Current maturities of other long-term debt               34             10        10,722         (2,833)         7,933
  Current portion of TV program rights payable              -         27,507             -              -         27,507
  Accrued salaries and commissions                        214          7,363           275              -          7,852
  Accrued interest                                     14,047              -            21              -         14,068
  Deferred revenue                                          -         16,392             -              -         16,392
  Other                                                 2,813          3,595             -              -          6,408
  Credit facility debt to be repaid with assets held
     for sale                                         135,000              -             -              -        135,000
  Liabilities associated with assets held for sale          -             63             -              -             63
                                                      -------         ------        ------         ------        -------
    Total current liabilities                         167,754         73,303        15,994         (2,833)       254,218

Long-term debt, net of current maturities           1,117,000              -             -              -      1,117,000
Other long-term debt, net of current maturities            41            366         9,172         (2,630)         6,949
TV program rights payable, net of current portion           -         40,551             -              -         40,551
Other noncurrent liabilities                           21,976          4,403           587              -         26,966
Deferred income taxes                                 108,988              -             -              -        108,988
                                                      -------         ------        ------         ------        -------

    Total liabilities                               1,415,759        118,623        25,753         (5,463)     1,554,672

SHAREHOLDER'S EQUITY:
  Common stock                                      1,027,221              -             -              -      1,027,221
  Additional paid-in capital                            8,108              -         4,393         (4,393)         8,108
  Subsidiary investment                                     -      1,888,538        20,650     (1,909,188)             -
  Retained earnings/(accumulated deficit)             (78,477)       389,021       (21,380)      (367,641)       (78,477)
  Accumulated other comprehensive loss                (12,385)             -        (6,901)         6,901        (12,385)
                                                      -------       -------         ------          -----        -------
    Total shareholder's equity                        944,467      2,277,559        (3,238)    (2,274,321)       944,467
                                                      -------      ---------        ------     ----------        -------
    Total liabilities and shareholder's equity    $ 2,360,226    $ 2,396,182      $ 22,515   $ (2,279,784)   $ 2,499,139
                                                  ===========    ===========      ========   ============    ===========
</TABLE>
<PAGE>


                             Emmis Operating Company
                 Condensed Consolidating Statement of Operations
                      For the Year Ended February 28, 2002


<TABLE>
<CAPTION>
                                                                                             Eliminations
                                                  Parent                       Subsidiary        and
                                                  Company       Subsidiary        Non-      Consolidating
                                                   Only         Guarantors     Guarantors      Entries     Consolidated
                                                   ----         ----------     ----------      -------     ------------
<S>                                             <C>               <C>           <C>               <C>       <C>

Net revenues                                     $ 1,695       $ 521,429      $ 16,698      $        -     $  539,822
Operating expenses:
     Station operating expenses,
         excluding noncash compensation            1,204         338,353        14,600               -        354,157
     Time brokerage fees                              -             479             -                -            479
     Corporate expenses, excluding
         noncash compensation                     20,283               -             -               -         20,283
     Noncash compensation                            817           8,278             -               -          9,095
     Depreciation and amortization                 4,752          91,979         3,527               -        100,258
     Impairment loss and other                         -          10,672             -               -         10,672
     Restructuring fees and other                    768               -             -               -            768
                                                  ------         -------        ------          ------        -------
          Total operating expenses                27,824         449,761        18,127               -        495,712
                                                  ------         -------        ------          ------        -------
Operating income (loss)                          (26,129)         71,668        (1,429)              -         44,110
                                                 -------          ------        ------           ------        ------
Other income (expense)
     Interest expense                           (102,109)           (285)       (2,324)            616       (104,102)
     Loss from unconsolidated affiliates          (4,232)           (771)            -               -         (5,003)
     Other income (expense), net                   1,403            (466)         (756)            179            360
                                                   -----            ----          ----             ---            ---
          Total other income (expense)          (104,938)         (1,522)       (3,080)            795       (108,745)
                                                --------          ------        ------             ---       --------

Income (loss) before income taxes,
    extraordinary loss and accounting
    change                                      (131,067)         70,146        (4,509)            795        (64,635)

Provision (benefit) for income taxes             (44,488)         26,655             -               -        (17,833)
                                                 -------          ------        ------          ------        -------

Income (loss) before extraordinary loss
    and accounting change                        (86,579)         43,491        (4,509)           795        (46,802)
Extraordinary loss, net of tax                    (1,084)              -             -              -         (1,084)
Equity in earnings (loss) of subsidiaries         39,777               -             -        (39,777)             -
                                                  ------          ------        ------        -------         ------
Net income (loss)                              $ (47,886)       $ 43,491      $ (4,509)     $ (38,982)     $ (47,886)
                                                =========        ========      ========      =========      =========

</TABLE>
<PAGE>


                             Emmis Operating Company
                 Condensed Consolidating Statement of Cash Flows
                      For the Year Ended February 28, 2002
 <TABLE>
<CAPTION>
                                                                                               Eliminations
                                                      Parent                      Subsidiary        and
                                                      Company      Subsidiary        Non-      Consolidating
                                                       Only        Guarantors     Guarantors      Entries      Consolidated
                                                       ----        ----------     ----------      -------      ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                <C>              <C>           <C>           <C>            <C>
  Net income (loss)                                  $ (47,886)      $ 43,491      $ (4,509)     $ (38,982)      $(47,886)
  Adjustments to reconcile net income (loss) to net
     cash provided (used) by operating activities -
      Extraordinary item                                 1,084              -             -              -          1,084
      Depreciation and amortization                     10,226        110,582         3,527              -        124,335
      Provision for bad debts                               -          4,005             -               -          4,005
      Provision (benefit) for deferred income taxes    (17,833)             -             -              -        (17,833)
      Noncash compensation                                 817          8,278             -              -          9,095
      Equity in earnings of subsidiaries               (39,777)             -             -         39,777              -
      Gain on sale of assets                                 -          9,063             -              -          9,063
      Other                                                795            375        (6,303)          (795)        (5,928)
  Changes in assets and liabilities -
      Accounts receivable                                    -         (3,649)        1,531              -         (2,118)
      Prepaid expenses and other current assets          3,082          1,202           843              -          5,127
      Other assets                                       2,057         (9,364)        1,355              -         (5,952)
      Accounts payable and accrued liabilities           5,035         (6,965)         (779)             -         (2,709)
      Deferred liabilities                                   -           (963)            -              -           (963)
      Other liabilities                                 24,482        (15,553)      (10,856)             -         (1,927)
                                                        ------        -------       -------        -------         ------
      Net cash provided (used) by investing activities (57,918)       140,502       (15,191)             -         67,393
                                                        ------        -------       -------        -------         ------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                   (2,252)       (29,018)        1,135              -        (30,135)
  Disposals of property and equipment                        -          1,719             -              -          1,719
  Cash paid for acquisitions                                 -       (140,746)            -              -       (140,746)
  Other                                                 (5,943)             -             -              -         (5,943)
                                                        ------         ------        ------           -----        ------
  Net cash provided (used) by investing activities      (8,195)      (168,045)        1,135              -       (175,105)
                                                        ------       --------         -----           -----      --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on long-term debt                          (133,000)             -             -              -       (133,000)
  Proceeds from long-term debt                           5,000              -             -              -          5,000
  Intercompany                                         143,532         28,495        14,742              -        186,769
  Debt related costs                                    (4,594)             -             -              -         (4,594)
                                                        ------         ------        ------         ------         ------
  Net cash provided (used) by investing activities      10,938         28,495        14,742              -         54,175
                                                        ------         ------        ------         ------         ------

INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                          (55,175)           952           686              -        (53,537)

CASH AND CASH EQUIVALENTS:
  Beginning of period                                   55,175          4,018           706              -         59,899
                                                        ------          -----           ---          -----         ------

  End of period                                        $     -       $  4,970       $ 1,392        $     -       $  6,362
                                                        =======       =======       =======        =======        =======


</TABLE>

<PAGE>


                             Emmis Operating Company
                 Condensed Consolidating Statement of Operations
                      For the Year Ended February 28, 2001

<TABLE>
<CAPTION>
                                                                                          Eliminations
                                                    Parent                   Subsidiary        and
                                                   Company      Subsidiary      Non-      Consolidating
                                                     Only       Guarantors   Guarantors      Entries     Consolidated
                                                     ----       ----------   ----------      -------     ------------
<S>                                                    <C>                                      <C>

Net revenues                                          $ 1,876     $ 456,891      $ 14,578     $       -      $ 473,345
Operating expenses:
     Station operating expenses,
         excluding noncash compensation                 1,692       284,136        13,304             -        299,132
     Time brokerage fees                                    -         7,344             -             -          7,344
     Corporate expenses, excluding
          noncash compensation                         17,601             -             -             -         17,601
     Noncash compensation                               1,015         4,385             -             -          5,400
     Depreciation and amortization                      4,028        66,527         3,463             -         74,018
     Restructuring fees and other                       2,057         2,000             -             -          4,057
                                                     --------      --------      --------     ---------       --------
          Total operating expenses                     26,393       364,392        16,767             -        407,552
                                                     --------      --------      --------     ---------       --------
Operating income (loss)                               (24,517)       92,499        (2,189)            -         65,793
                                                     --------      --------      --------     ---------       --------
Other income (expense)
     Interest expense                                 (69,608)         (297)       (3,221)          682        (72,444)
     Loss from unconsolidated affiliates               (1,360)            -             -             -         (1,360)
     Other income (expense), net                       13,332        26,977          (354)         (558)        39,397
                                                     --------      --------      --------     ---------       --------
          Total other income (expense)                (57,636)       26,680        (3,575)          124        (34,407)
                                                     --------      --------      --------     ---------       --------

Income (loss) before income taxes,
    extraordinary loss and accounting change          (82,153)      119,179        (5,764)          124         31,386

Provision (benefit) for income taxes                  (27,638)       45,288             -             -         17,650
                                                     --------      --------      --------     ---------       --------
Income (loss) before extraordinary loss
    and accounting change                             (54,515)       73,891        (5,764)          124         13,736
Equity in earnings (loss) of subsidiaries              68,251             -             -       (68,251)             -
                                                     --------      --------      --------     ---------       --------
Net income (loss)                                    $ 13,736      $ 73,891      $ (5,764)    $ (68,127)      $ 13,736
                                                     ========      ========      ========     =========       ========

</TABLE>

<PAGE>


                             Emmis Operating Company
                 Condensed Consolidating Statement of Cash Flows
                      For the Year Ended February 28, 2001


                                      <TABLE>
<CAPTION>

                                                                                              Eliminations
                                                     Parent                      Subsidiary        and
                                                     Company      Subsidiary        Non-      Consolidating
                                                      Only        Guarantors     Guarantors      Entries     Consolidated
                                                      ----        ----------     ----------      -------     ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                <C>            <C>           <C>            <C>             <C>
 Net income (loss)                                    $ 13,736       $ 73,891      $ (5,764)     $ (68,127)      $ 13,736
  Adjustments to reconcile net income (loss) to net
     cash provided (used) by operating activities -
      Depreciation and amortization                      9,758         81,233         3,463              -         94,454
      Provision for bad debts                                -          3,713             -              -          3,713
      Provision (benefit) for deferred income taxes     15,810              -             -              -         15,810
      Noncash compensation                               1,015          4,385             -              -          5,400
      Equity in earnings of subsidiaries               (68,251)             -             -         68,251              -
      Gain on exchange of assets                             -        (22,000)            -              -        (22,000)
      Other                                                379            348           861           (124)         1,464
  Changes in assets and liabilities -
      Accounts receivable                                    -         (7,114)       (2,202)             -         (9,316)
      Prepaid expenses and other current assets        (12,716)       (11,527)         (384)             -        (24,627)
      Other assets                                      10,435          1,216           448              -         12,099
      Accounts payable and accrued liabilities           9,070          5,493           778              -         15,341
      Deferred liabilities                                   -            569             -              -            569
      Other liabilities                                   (220)       (23,096)        3,544              -        (19,772)
                                                          ----        -------         -----           ----        -------
      Net cash provided (used) by investing activities (20,984)       107,111           744              -         86,871
                                                         -----        -------         -----           ----        -------


CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                   (3,683)       (22,323)         (219)             -        (26,225)
  Cash paid for acquisitions                                 -     (1,060,681)            -              -     (1,060,681)
  Other                                                (23,849)             -             -              -        (23,849)
                                                        ------        -------         -----           ----        -------

  Net cash provided (used) by investing activities     (27,532)    (1,083,004)         (219)             -     (1,110,755)
                                                       -------     ----------          ----           ----     ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on long-term debt                        (1,048,388)             -        (3,161)             -     (1,051,549)
  Proceeds from long-term debt                       2,128,388              -             -              -      2,128,388
  Intercompany                                        (955,662)       977,347       (11,016)             -         10,669
  Debt related costs                                   (21,095)             -             -              -        (21,095)
                                                       -------           ----          ----           ----      ---------
  Net cash provided (used) by investing activities     103,243        977,347       (14,177)             -      1,066,413
                                                       -------        -------       -------           ----      ---------

INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                           54,727          1,454       (13,652)             -         42,529

CASH AND CASH EQUIVALENTS:
  Beginning of period                                      448          2,564        14,358              -         17,370
                                                           ---          -----        ------           ----         ------

  End of period                                       $ 55,175       $  4,018      $    706      $       -       $ 59,899
                                                      ========        =======         =====          =====       ========

</TABLE>

<PAGE>



14. SUBSEQUENT EVENTS

     Effective March 1, 2003,  Emmis completed its acquisition of  substantially
all of the assets of television station WBPG-TV in Mobile, AL-Pensacola, FL from
Pegasus   Communications   Corporation  for  approximately  $11.5  million.  The
acquisition was financed  through  borrowings  under the credit facility and was
accounted for as a purchase.

     Emmis has agreed to  acquire,  for a purchase  price of $105.2  million,  a
controlling interest of 50.1% in LBJS Broadcasting Company, L.P. LBJS owns radio
stations  KLBJ-AM,  KLBJ-FM,  KXMG-FM,  KROX-FM and KGSR-FM,  all in the Austin,
Texas  metropolitan  area. The remaining  49.9% interest in LBJS will be held by
Sinclair  Telecable,  Inc.  which will  contribute  to LBJS a sixth Austin radio
station,  KEYI-FM.  We expect this acquisition to close in the second quarter of
our fiscal 2004. We will finance the acquisition  through  borrowings  under the
credit facility and the acquisition will be accounted for as a purchase. We need
an amendment under our credit facility for the  acquisition,  which we expect to
obtain prior to closing.  In addition,  Emmis will have the option,  but not the
obligation,  to purchase  Sinclair's  entire  interest in LBJS after a period of
approximately five years based on an 18-multiple of trailing 12-month cash flow.


15. QUARTERLY FINANCIAL DATA (UNAUDITED)

     EMMIS

<TABLE>
<CAPTION>

                                                                                     Quarter Ended
                                                                       -----------------------------------------
                                                                                                                            Full
                                                                       May 31      Aug. 31    Nov. 30     Feb. 28           Year
                                                                       ------      -------    -------     -------           ----
Year ended February 28, 2003
<S>                                                                  <C>          <C>        <C>         <C>            <C>
     Net revenues                                                    $ 136,806    $ 143,222  $ 155,544   $ 126,791      $ 562,363
     Operating income (loss)                                            29,229       35,843     44,984      15,799        125,855
     Net income (loss) before extraordinary item
         and accounting change                                           4,166        4,221     10,814      (5,152)        14,049
     Net income (loss) available to common shareholders               (167,820)      (6,802)     8,568      (7,398)      (173,452)
     Basic earnings per common share:
         Before extraordinary item and accounting change                $ 0.04       $ 0.04     $ 0.16     $ (0.14)        $ 0.10
         Net income (loss) available to common shareholders            $ (3.28)     $ (0.13)    $ 0.16     $ (0.14)       $ (3.27)
     Diluted earnings per common share:
         Before extraordinary item and accounting change                $ 0.04       $ 0.04     $ 0.16     $ (0.14)        $ 0.10
         Net income (loss) available to common shareholders            $ (3.28)     $ (0.13)    $ 0.16     $ (0.14)       $ (3.27)

Year ended February 28, 2002
     Net revenues                                                    $ 138,253    $ 144,647  $ 138,289   $ 118,633      $ 539,822
     Operating income (loss)                                            15,399       25,691     16,824     (13,804)        44,110
     Net income (loss) before extraordinary item
         and accounting change                                         (13,477)      (6,070)   (11,698)    (31,779)       (63,024)
     Net income (loss) available to common shareholders                (15,723)      (9,400)   (13,944)    (34,025)       (73,092)
     Basic earnings per common share:
         Before extraordinary item and accounting change               $ (0.33)     $ (0.18)   $ (0.29)    $ (0.72)       $ (1.52)
         Net income (loss) available to common shareholders            $ (0.33)     $ (0.20)   $ (0.29)    $ (0.72)       $ (1.54)
     Diluted earnings per common share:
         Before extraordinary item and accounting change               $ (0.33)     $ (0.18)   $ (0.29)    $ (0.72)       $ (1.52)
         Net income (loss) available to common shareholders            $ (0.33)     $ (0.20)   $ (0.29)    $ (0.72)       $ (1.54)

     EOC
                                                                                    Quarter Ended
                                                                       -----------------------------------------
                                                                                                                              Full
                                                                       May 31      Aug. 31    Nov. 30        Feb. 28          Year
                                                                       ------      -------    ------        -------           ----
Year ended February 28, 2003
     Net revenues                                                    $ 136,806    $ 143,222    $ 155,544   $ 126,791      $ 562,363
     Operating income (loss)                                            29,229       35,843       44,984      15,799        125,855
     Net income (loss) before extraordinary item
         and accounting change                                           9,231        8,535       14,772      (1,814)        30,724
     Net income (loss)                                                (160,509)       7,986       14,772      (1,814)      (139,565)

Year ended February 28, 2002
     Net revenues                                                    $ 138,253    $ 144,647    $ 138,289   $ 118,633      $ 539,822
     Operating income (loss)                                            15,399       25,691       16,824     (13,804)        44,110
     Net income (loss) before extraordinary item
         and accounting change                                         (10,862)      (2,079)      (7,268)    (26,593)       (46,802)
     Net income (loss)                                                 (10,862)      (3,163)      (7,268)    (26,593)       (47,886)

</TABLE>

<PAGE>



                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of Emmis  Communications  Corporation
and Subsidiaries:

     We have  audited  the  accompanying  consolidated  balance  sheet  of Emmis
Communications  Corporation  and  Subsidiaries  as of February  28, 2003 and the
related  consolidated  statement of operations,  changes in shareholders' equity
and cash flows for the year then ended.  We have also  audited the  accompanying
consolidated   balance  sheet  of  Emmis  Operating  Company,  (a  wholly  owned
subsidiary of Emmis Communications  Corporation) and Subsidiaries as of February
28,  2003 and the  related  consolidated  statement  of  operations,  changes in
shareholder's  equity and cash flows for the year then  ended.  These  financial
statements   are  the   responsibility   of  the  Companies'   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.  The financial  statements of Emmis  Communications  Corporation and
Subsidiaries  and Emmis  Operating  Company and  Subsidiaries as of February 28,
2002 and for the two years in the period ended  February 28, 2002,  were audited
by other auditors who have ceased operations and whose report dated May 2, 2002,
expressed an unqualified opinion on those statements and included an explanatory
paragraph  that disclosed the adoption of SFAS No. 133 as discussed in Note 1 to
the consolidated financial statements.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position  of  Emmis  Communications
Corporation  and  Subsidiaries as of February 28, 2003, and the results of their
operations  and their cash flows for the year then  ended,  in  conformity  with
accounting  principles generally accepted in the United States and the financial
position of Emmis  Operating  Company and  Subsidiaries as of February 28, 2003,
and the  results  of their  operations  and their  cash  flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States.

     As discussed in Note 7 to the consolidated financial statements,  effective
March 1, 2002,  the  Companies  changed  the manner in which  they  account  for
goodwill and indefinite lived  intangible  assets upon the adoption of Statement
of  Financial  Accounting  Standards  No. 142,  "Goodwill  and Other  Intangible
Assets".

     As  discussed  above,  the  financial  statements  of Emmis  Communications
Corporation and Subsidiaries and Emmis Operating  Company and Subsidiaries as of
February  28, 2002,  and for each of the two years in the period ended  February
28,  2002,  were  audited  by other  auditors  who have  ceased  operations.  As
described in Note 7, these consolidated  financial  statements have been revised
to include the  transitional  disclosures  required by  Statement  of  Financial
Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets". Our
audit  procedures  with  respect to the  disclosures  in Note 7 with  respect to
fiscal 2002 and 2001  included (a) agreeing the  previously  reported net income
(loss)  to  the  previously  issued  financial  statements,   (b)  agreeing  the
amortization  expense and  associated  tax benefit  recognized  in those periods
related  to  goodwill  and other  intangible  assets  that are no  longer  being
amortized  as a result of  applying  SFAS No.  142 to the  Company's  underlying
records  obtained from management and (c) testing the  mathematical  accuracy of
the  reconciliation of adjusted net income (loss) to reported net income (loss),
and the related earnings-per-share  amounts. In our opinion, the disclosures for
fiscal 2002 and 2001 in Note 7 are appropriate.  However, we were not engaged to
audit,  review,  or apply any  procedures to the fiscal 2002 and 2001  financial
statements of the  Companies  other than with respect to such  disclosures  and,
accordingly,  we do not express an opinion or any other form of assurance on the
2002 and 2001 financial statements taken as a whole.

/s/ ERNST & YOUNG LLP

Indianapolis, Indiana,
April 11, 2003.





<PAGE>


THE FOLLOWING IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP AND
HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP.



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of Emmis  Communications  Corporation
and Subsidiaries:

     We have  audited  the  accompanying  consolidated  balance  sheets of EMMIS
COMMUNICATIONS  CORPORATION  (an Indiana  corporation)  and  Subsidiaries  as of
February  28,  2002  and  2001,  and  the  related  consolidated  statements  of
operations, changes in shareholders' equity and cash flows for each of the three
years  in the  period  ended  February  28,  2002.  We  have  also  audited  the
accompanying  consolidated balance sheets of EMMIS OPERATING COMPANY (an Indiana
corporation and wholly owned subsidiary of Emmis Communications Corporation) and
Subsidiaries  as of  February  28, 2002 and 2001,  and the related  consolidated
statements of  operations,  changes in  shareholders'  equity and cash flows for
each of the three years in the period ended February 28, 2002.  These  financial
statements   are  the   responsibility   of  the  Companies'   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all  material  respects,  the  financial  position  of  Emmis  Communications
Corporation  and  Subsidiaries as of February 28, 2002 and 2001, and the results
of their  operations  and their  cash  flows for each of the three  years in the
period  ended  February  28,  2002  in  conformity  with  accounting  principles
generally  accepted  in the United  States and the  financial  position of Emmis
Operating  Company and  Subsidiaries  as of February 28, 2002 and 2001,  and the
results of their  operations and their cash flows for each of the three years in
the period ended  February 28, 2002 in  conformity  with  accounting  principles
generally accepted in the United States.

     As discussed in Note 1v. of the notes to consolidated financial statements,
effective  March 1, 2001,  the Company  changed its  accounting  for  derivative
instruments  and hedging  activities  pursuant to the provisions of Statement of
Financial  Accounting  Standards No. 133,  "Accounting  for  Derivative  Hedging
Activities."


/s/   ARTHUR ANDERSEN LLP

ARTHUR ANDERSEN LLP

Indianapolis, Indiana,
May 2, 2002.



<PAGE>


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

     On June 13, 2002, we dismissed  Arthur Andersen LLP ("Arthur  Andersen") as
our  independent  auditors  and named  Ernst & Young LLP as our new  independent
auditors in accordance with a recommendation of the Audit Committee of our Board
of Directors.  Arthur Andersen  previously  audited our  consolidated  financial
statements for the years ended February 28, 2001 and 2002. The reports of Arthur
Andersen on our consolidated  financial  statements for the years ended February
28, 2001 and 2002 did not contain an adverse  opinion or a disclaimer of opinion
and were not qualified or modified as to uncertainty,  audit scope or accounting
principles.  During the same  period,  there were no  disagreements  with Arthur
Andersen  on  any  matter  of  accounting  principles  or  practices,  financial
statement disclosure or auditing scope or procedure.


                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The information required by this item with respect to directors or nominees
to be directors of Emmis is incorporated by reference from the section  entitled
"Proposal No. 1:  Election of  Directors" in the Emmis 2003 Proxy  Statement and
the section entitled  "Compliance with Section 16(a) of the Securities  Exchange
Act of 1934" in the Emmis 2003 Proxy  Statement.  All  directors of ECC are also
directors of EOC.

     Listed below is certain  information about the executive  officers of Emmis
or its  affiliates  who are not directors or nominees to be directors.  All such
persons are executive officers of both ECC and EOC.

<TABLE>
<CAPTION>

                                                                          AGE AT         YEAR FIRST
                                                                       FEBRUARY 28,        ELECTED
           NAME                           POSITION                         2003            OFFICER
  ----------------------       ------------------------------         -------------    -------------
<S>                                                                         <C>             <C>
  Randall D. Bongarten         Television Division President                52              2000

  Richard F. Cummings          Radio Division President                     50              1984

  Michael Levitan              Senior Vice President - Human Resources      45              2002

  Gary Thoe                    Publishing Division President                46              1998

</TABLE>

     Set forth below is the principal occupation for the last five years of each
executive officer of the Company or its affiliates who is not also a director.

     Randall D.  Bongarten  has been  employed as President of Emmis  Television
since October 2000. He served as President of Emmis International from June 1998
to September 2002.  Prior to June 1998, Mr. Bongarten had served as President of
GAF  Broadcasting  and as Executive Vice President of Operations for Emmis Radio
Division.

     Richard F.  Cummings  was the  Program  Director of WENS from 1981 to March
1984,  when he became the  National  Program  Director  and a Vice  President of
Emmis. He became Executive Vice  President--Programming in 1988 and became Radio
Division President in December 2001.

     Michael  Levitan  has  been  employed  as  Senior  Vice  President  - Human
Resources  since  September  2002,  but  he  has  served  as a  human  resources
consultant to Emmis since 2000.  Prior to joining  Emmis,  Mr. Levitan served as
Director of Human  Resources  for Apple  Computer and as  Executive  Director of
Organizational Effectiveness and Assistant to the President of Cummins Engine.

     Gary Thoe has been employed as President of Emmis Publishing since February
1998.  Prior to February  1998,  Mr. Thoe served as President  and part owner of
Mayhill Publications, Inc.



<PAGE>


ITEM 11. EXECUTIVE COMPENSATION.

     The information required by this item is incorporated by reference from the
section entitled "Executive Compensation" in the Emmis 2003 Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The  information  required by this item with respect to ECC is incorporated
by reference from the section entitled "Voting Securities and Beneficial Owners"
in the Emmis 2003 Proxy Statement. ECC is the only holder of the common stock of
EOC.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information required by this item is incorporated by reference from the
section entitled "Certain Transactions" in the Emmis 2003 Proxy Statement.


ITEM 14. CONTROLS AND PROCEDURES


Quarterly Evaluation of the Companies' Disclosure Controls


Within the 90 days  prior to the date of this  Annual  Report on Form 10-K,  the
Company  evaluated  the  effectiveness  of  the  design  and  operation  of  its
"disclosure controls and procedures"  ("Disclosure  Controls").  This evaluation
(the "Controls  Evaluation")  was performed  under the  supervision and with the
participation of management,  including our Chief Executive  Officer ("CEO") and
Chief Financial Officer ("CFO").


CEO and CFO Certifications


Immediately  following the Signatures  section of this Annual Report,  there are
two separate forms of  "Certifications" of the CEO and the CFO for each of Emmis
Communications  Corporation and  Subsidiaries  and Emmis  Operating  Company and
Subsidiaries.  The first form of Certification (the "Rule 13a-14 Certification")
is required in accord with Rule 13a-14 of the  Securities  Exchange  Act of 1934
(the "Exchange Act"). This Controls and Procedures  section of the Annual Report
includes the information  concerning the Controls  Evaluation referred to in the
Rule 13a-14  Certifications  and it should be read in conjunction  with the Rule
13a-14 Certifications for a more complete understanding of the topics presented.


Disclosure Controls


Disclosure Controls are procedures designed to ensure that information  required
to be disclosed in our reports filed under the Exchange Act, such as this Annual
Report, is recorded, processed,  summarized and reported within the time periods
specified in the U.S. Securities and Exchange Commission's (the "SEC") rules and
forms.  Disclosure Controls are also designed to ensure that such information is
accumulated and  communicated  to our management,  including the CEO and CFO, as
appropriate to allow timely decisions regarding required disclosure.


Limitations on the Effectiveness of Controls


The  Company's  management,  including the CEO and CFO, does not expect that our
Disclosure Controls will prevent all error. A control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that
the control system's  objectives will be met.  Further,  the design of a control
system  must  reflect  the fact that  there are  resource  constraints,  and the
benefits of controls must be considered relative to their costs.  Because of the
inherent  limitations  in all control  systems,  no  evaluation  of controls can
provide absolute  assurance that all control issues within the Company have been
detected.  These  inherent  limitations  include the realities that judgments in
decision-making  can be faulty,  and that breakdowns can occur because of simple
error or mistake.  Controls can also be  circumvented  by the individual acts of
some persons,  by collusion of two or more people, or by management  override of
the controls. The design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving  its stated goals under all  potential
future conditions.  Over time, controls may become inadequate because of changes
in conditions  or  deterioration  in the degree of  compliance  with policies or
procedures.  Because of the inherent  limitations  in a  cost-effective  control
system, misstatements due to error may occur and not be detected.




<PAGE>



Scope of the Controls Evaluation


The  evaluation of our  Disclosure  Controls  included a review of the controls'
objectives  and design,  the  Company's  implementation  of the controls and the
effect of the  controls  on the  information  generated  for use in this  Annual
Report.  In the course of the Controls  Evaluation,  we sought to identify  data
errors,  controls  problems  or acts  of  fraud  and  confirm  that  appropriate
corrective actions, including process improvements,  were being undertaken. This
type of evaluation is performed on a quarterly  basis so that the conclusions of
management,  including the CEO and CFO, concerning controls effectiveness can be
reported in our  Quarterly  Reports on Form 10-Q and Annual Report on Form 10-K.
The overall  goals of these  various  evaluation  activities  are to monitor our
Disclosure  Controls and to modify them as necessary.  Our intent is to maintain
the Disclosure Controls as dynamic systems that change as conditions warrant.


Among other matters, we sought in our evaluation to determine whether there were
any  "significant  deficiencies"  or  "material  weaknesses"  in  the  Company's
internal  controls,  and whether the  Company had  identified  any acts of fraud
involving  personnel with a significant role in the Company's internal controls.
This information was important both for the Controls Evaluation  generally,  and
because  items  5 and 6 in the  Rule  13a-14  Certifications  of the CEO and CFO
require  that the CEO and CFO disclose  that  information  to our Board's  Audit
Committee and our  independent  auditors,  and report on related matters in this
section of the Annual Report. In professional auditing literature,  "significant
deficiencies"  are  referred to as  "reportable  conditions,"  which are control
issues that could have a  significant  adverse  effect on the ability to record,
process,  summarize  and  report  financial  data in the  financial  statements.
Auditing  literature  defines  "material  weakness"  as a  particularly  serious
reportable  condition where the internal control does not reduce to a relatively
low  level  the risk  that  misstatements  caused by error or fraud may occur in
amounts that would be material in relation to the financial  statements  and the
risk that such  misstatements  would not be detected  within a timely  period by
employees in the normal course of performing their assigned  functions.  We also
sought to deal with other controls  matters in the Controls  Evaluation,  and in
each case if a problem was identified, we considered what revision,  improvement
and/or correction to make in accordance with our ongoing procedures.


From the date of the  Controls  Evaluation  to the date of this  Annual  Report,
there have been no significant  changes in internal controls or in other factors
that could  significantly  affect  internal  controls,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Conclusion


Based upon the Controls Evaluation, our CEO and CFO have concluded that, subject
to the limitations noted above, our Disclosure  Controls are effective to ensure
that  material  information  relating to Emmis  Communications  Corporation  and
Subsidiaries  and Emmis  Operating  Company  and  Subsidiaries  is made known to
management,  including the CEO and CFO,  particularly during the period when our
periodic reports are being prepared.



<PAGE>



                                     PART IV

ITEM 15. EXHIBITS, FIANANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

Financial Statements

     The financial statements filed as a part of this report are set forth under
Item 8.

Fianancial Statement Schedules

     No financial statement schedules are required to be filed with this report.

Reports on Form 8-K

     On January 13,  2003,  the company  filed a Form 8-K,  reporting  an Item 5
Other Event  regarding its press release  announcing  operating  results for its
quarter ended November 30, 2002

Exhibits

The following  exhibits are filed or incorporated by reference as a part of this
report:

3.1  Second   Amended  and   Restated   Articles  of   Incorporation   of  Emmis
     Communications  Corporation,  incorporated by reference from Exhibit 3.1 to
     Emmis' Annual Report on Form 10-K/A for the fiscal year ended  February 29,
     2000, and an amendment  thereto  relating to certain 12.5% Senior Preferred
     Stock  incorporated by reference from Exhibit 3.1 to the Company's  current
     report on Form 8-K filed December 13, 2001.

3.2  Amended  and   Restated   Bylaws  of  Emmis   Communications   Corporation,
     incorporated  by reference  from Exhibit 3.2 to the Company's Form 10-Q for
     the quarter ended November 30, 2002.

3.3  Articles of  Incorporation  of Emmis  Operating  Company,  incorporated  by
     reference from Exhibit 3.4 to the Company's  Form S-3/A File No.  333-62172
     filed on June 21, 2001.

3.4  Bylaws of Emmis Operating  Company,  incorporated by reference from Exhibit
     3.5 to the Company's Form S-3/A File No. 333-62172 filed on June 21, 2001.

4.1  Indenture dated February 12, 1999 among Emmis  Communications  Corporation,
     certain subsidiary  guarantors and IBJ Whitehall Bank and Trust Company, as
     trustee,  including as an exhibit thereto the form of note, incorporated by
     reference to Exhibit 4.1 to Emmis' Registration Statement on Form S-4, File
     No. 333-74377, as amended (the "1999 Registration Statement").

4.2  Indenture dated March 27, 2001 among Emmis  Communications  Corporation and
     The Bank of Nova Scotia Trust Company of New York, as trustee, including as
     an exhibit  thereto the form of note,  incorporated by reference to Exhibit
     4.1 to Emmis' Registration  Statement on Form S-4, File No. 333-621604,  as
     amended (the "2001 Registration Statement").

4.3  Form of  stock  certificate  for  Class A  common  stock,  incorporated  by
     reference from Exhibit 3.5 to the 1994 Emmis Registration Statement on Form
     S-1, File No. 33-73218, the "1994 Registration Statement".

10.1 Emmis Operating Company Profit Sharing Plan, as amended, effective March 1,
     1997.++ *

10.2 Emmis Communications  Corporation 1994 Equity Incentive Plan,  incorporated
     by reference from Exhibit 10.5 to the 1994 Registration Statement.++

10.3 The Emmis  Communications  Corporation  1995  Non-Employee  Director  Stock
     Option Plan,  incorporated by reference from Exhibit 10.15 to Emmis' Annual
     Report on Form 10-K for the fiscal year ended  February 28, 1995 (the "1995
     10-K").++
<PAGE>

10.4 The  Emmis   Communications   Corporation   1995  Equity   Incentive   Plan
     incorporated by reference from Exhibit 10.16 to the 1995 10-K.++

10.5 Emmis Communications  Corporation 1997 Equity Incentive Plan,  incorporated
     by reference from Exhibit 10.5 to Emmis' Annual Report on Form 10-K for the
     fiscal year ended February 28, 1998 (the "1998 10-K").++

10.6 Emmis Communications  Corporation 1999 Equity Incentive Plan,  incorporated
     by reference from the Company's proxy statement dated May 26, 1999.++

10.7  Emmis Communications  Corporation 2001 Equity Incentive Plan, incorporated
      by reference from the Company's proxy statement dated May 25, 2001.++

10.8 Emmis   Communications   Corporation   2002   Equity   Compensation   Plan,
     incorporated  by reference from the Company's proxy statement dated May 30,
     2002.++

10.9 Employment  Agreement  dated as of  March 1,  1994,  by and  between  Emmis
     Broadcasting Corporation and Jeffrey H. Smulyan,  incorporated by reference
     from Exhibit 10.13 to Emmis' Annual Report on Form 10-K for the fiscal year
     ended  February 28, 1994 and amendment to Employment  Agreement,  effective
     March 1, 1999, between the Company and Jeffrey H. Smulyan,  incorporated by
     reference from Exhibit 10.2 to Emmis' Quarterly Report on Form 10-Q for the
     quarter ended November 30, 1999.++

10.10Fourth Amended and Restated  Revolving Credit and Term Loan Agreement,  and
     First  Amendment to Fourth Amended and Restated  Revolving  Credit and Term
     Loan  Agreement,  incorporated  by reference  from  Exhibits 10.1 and 10.2,
     respectively, to Emmis' Form 8-K filed on April 12, 2001.

10.11Second  Amendment to Fourth Amended and Restated  Revolving Credit and Term
     Loan  Agreement,  incorporated  by reference  from Exhibit  10.10 to Emmis'
     Annual Report on Form 10-K for the fiscal year ended February 28, 2001.

10.12Third  Amendment to Fourth Amended and Restated  Revolving  Credit and Term
     Loan  Agreement,  incorporated  by  reference  from  Exhibit 10.1 to Emmis'
     Quarterly Report on Form 10-Q for the quarter ended November 30, 2001.

10.13Fourth  Amendment to Fourth Amended and Restated  Revolving Credit and Term
     Loan  Agreement,  incorporated  by  reference  from  Exhibit  10.1  to  the
     Company's Form 10-Q for the quarter ended May 31, 2002.

10.14Asset  Purchase  Agreement,  dated as of February  12,  2002,  by and among
     Entercom  Communications  Corporation and Emmis Communications  Corporation
     incorporated  by reference  from Exhibit  10.13 to Emmis'  Annual Report on
     Form 10-K for the fiscal year ended February 28, 2002 (the "2002 10-K").

10.15Asset  Purchase  Agreement,  dated as of February  12,  2002,  by and among
     Entravision Communications Corporation and Emmis Communications Corporation
     incorporated by reference from Exhibit 10.14 to the 2002 10-K.

10.16Purchase  and Sale  Agreement,  dated as of May 7,  2000,  by and among Lee
     Enterprises,   Incorporated,   New  Mexico   Broadcasting   Co.  and  Emmis
     Communications  Corporation,  incorporated by reference from Exhibit 2.1 to
     Emmis' Form 8-K filed on October 16, 2000.

10.17Option  Agreement,  dated as of June 5,  2000,  by and among  Hearst-Argyle
     Properties,  Inc.  and Emmis  Communications  Corporation  incorporated  by
     reference from Exhibit 10.16 to the 2002 10-K.

10.18Asset Purchase Agreement,  dated as of June 21, 2000, by and among Sinclair
     Radio of St. Louis,  Inc.,  Sinclair Radio of St. Louis  Licensee,  LLC and
     Emmis  Communications  Corporation,  incorporated by reference from Exhibit
     2.2 to Emmis' Form 8-K filed on October 16, 2000.

10.19Asset  Exchange  Agreement,  dated as of  October 6,  2000,  between  Emmis
     Communications Corporation,  Emmis 106.5 FM Broadcasting Corporation of St.
     Louis and Emmis 106.5 FM License  Corporation of St. Louis,  and Bonneville
     International  Corporation and Bonneville Holding Company,  incorporated by
     reference from Exhibit 2.3 to Emmis' Form 8-K filed on October 16, 2000.
<PAGE>

10.20Asset  Purchase  Agreement,  dated as of June 19, 2000,  by and among Emmis
     Communications  Corporation,  AMFM Houston,  Inc., AMFM Ohio, Inc. and AMFM
     Radio Licenses,  LLC, incorporated by reference from Exhibit 10.2 to Emmis'
     Form 8-K filed on October 16, 2000.

10.21Employment  Agreement  dated as of  March 1,  2002,  by and  between  Emmis
     Operating Company and Richard Cummings.* ++

10.22Employment  Agreement  dated as of September 9, 2002,  by and between Emmis
     Operating Company and Michael Levitan.* ++

10.23Employment  Agreement  dated as of  March 1,  2003,  by and  between  Emmis
     Operating Company and Gary A. Thoe.* ++

10.24Employment  Agreement  dated as of  March 1,  2002,  by and  between  Emmis
     Operating Company and Walter Z. Berger.* ++

16.1 Arthur Andersen LLP letter to the SEC dated June 20, 2002,  incorporated by
     reference  to the  Company's  Current  Report on Form 8-K/A  filed June 20,
     2002.

21.1 Subsidiaries of Emmis.*

23.1 Consent of Accountants.*

24.1 Powers of Attorney.*

99.1 Certification  of CEO of Emmis  Communications  Corporation  pursuant to 18
     U.S.C.   Section  1350,   as  adopted   pursuant  to  Section  906  of  the
     Sarbanes-Oxley Act of 2002.*

99.2 Certification  of CFO of Emmis  Communications  Corporation  pursuant to 18
     U.S.C.   Section  1350,   as  adopted   pursuant  to  Section  906  of  the
     Sarbanes-Oxley Act of 2002.*

99.3 Certification  of CEO of Emmis  Operating  Company  pursuant  to 18  U.S.C.
     Section 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act
     of 2002.*

99.4 Certification  of CFO of Emmis  Operating  Company  pursuant  to 18  U.S.C.
     Section 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act
     of 2002.*

------------------------
*   Filed with this report.
++  Management contract or compensatory plan or arrangement.


<PAGE>



Signatures.

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                                         EMMIS COMMUNICATIONS CORPORATION




Date:      May 9, 2003                   By:  /s/ Jeffrey H. Smulyan
                                              -----------------------
                                                Jeffrey H. Smulyan
                                                Chairman of the Board



Signatures.

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                                                    EMMIS OPERATING COMPANY




Date:             May 9, 2003                      By:  /s/ Jeffrey H. Smulyan
                                                        -----------------------
                                                          Jeffrey H. Smulyan
                                                          Chairman of the Board


<PAGE>



     Pursuant to the requirements of the Securities  Exchange Act of 1934, these
reports  have  been  signed  below by the  following  persons  on  behalf of the
registrants and on the dates indicated.

                    SIGNATURE                                         TITLE

Date: May 9, 2003  /s/ Jeffrey H. Smulyan   President, Chairman of the Board and
                   ----------------------
                   Jeffrey H. Smulyan       Director-Principal Executive Officer

Date: May 9, 2003  /s/ Walter Z. Berger     Executive Vice President, Treasurer,
                   --------------------
                   Walter Z. Berger         Chief Financial Officer and Director
                                            -Principal Accounting Officer

Date: May 9, 2003  Susan B. Bayh*           Director
                   -------------
                   Susan B. Bayh

Date: May 9, 2003  Gary L. Kaseff*          Executive Vice President, General
                   --------------
                   Gary L. Kaseff           Counsel and Director

Date: May 9, 2003  Richard A. Leventhal*    Director
                   --------------------
                   Richard A. Leventhal

Date: May 9, 2003  Peter A. Lund*           Director
                   -------------
                   Peter A. Lund

Date: May 9, 2003  Greg A. Nathanson*       Director
                   -----------------
                   Greg A. Nathanson

Date: May 9, 2003  Frank V. Sica*           Director
                   -------------
                   Frank V. Sica

Date: May 9, 2003  Lawrence B. Sorrel*      Director
                   ------------------
                   Lawrence B. Sorrel


*By:         /s/  J. Scott Enright
             J. Scott Enright
             Attorney-in-Fact


<PAGE>


                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER


I, Jeffrey H. Smulyan, certify that:

1.   I have  reviewed  this annual  report on Form 10-K of Emmis  Communications
     Corporation;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  May 9, 2003

                                   /s/ JEFFREY H. SMULYAN
                                   Jeffrey H. Smulyan
                                   Chairman of the Board, President and
                                   Chief Executive Officer



<PAGE>



                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Walter Z. Berger, certify that:

1.   I have  reviewed  this annual  report on Form 10-K of Emmis  Communications
     Corporation;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  May 9, 2003

                                        /s/ WALTER Z. BERGER
                                        Walter Z. Berger
                                        Executive Vice President, Treasurer
                                        and Chief Financial Officer




<PAGE>



                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Jeffrey H. Smulyan, certify that:

1.   I have reviewed this annual report on Form 10-K of Emmis Operating Company;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  May 9, 2003

                                        /s/ JEFFREY H. SMULYAN
                                        Jeffrey H. Smulyan
                                        Chairman of the Board, President and
                                        Chief Executive Officer



<PAGE>



                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Walter Z. Berger, certify that:

1.   I have reviewed this annual report on Form 10-K of Emmis Operating Company;

2.   Based on my  knowledge,  this  annual  report  does not  contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information included in this annual report,  fairly present in all material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during the period in which this annual report
          is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented   in  this   annual   report  our   conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     annual  report  whether or not there were  significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  May 9, 2003

                              /s/ WALTER Z. BERGER
                              Walter Z. Berger
                              Executive Vice President, Treasurer
                              and Chief Financial Officer