# UNITED STATES  SECURITIES AND
EXCHANGE COMMISSION WASHINGTON, D.C. 20549

# FORM 10-Q

# QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE  SECURITIES EXCHANGE
ACT OF 1934

# For the quarterly
period ended August 31, 2003

|EMMIS COMMUNICATIONS CORPORATION      
Exact name of registrant as specified in its
                  charter)      |  | EMMIS OPERATING COMPANY
(Exact name of registrant as specified in its
                   charter)               
|------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------
|INDIANA
(State of incorporation or organization)                                                                    |  | INDIANA
(State of incorporation or organization)                                                                
|0-23264
(Commission file number)                                                                                    |  | 333-62172-13
(Commission file number)                                                                           
|35-1542018
(I.R.S. Employer 
Identification No.)                                                                    |  | 35-2141064
(I.R.S. Employer
Identification No.)                                                                 
|ONE EMMIS PLAZA 
40 MONUMENT CIRCLE 
SUITE 700 
INDIANAPOLIS, INDIANA 46204(Address of principal executive offices) |  | ONE EMMIS PLAZA
40 MONUMENT CIRCLE
SUITE 700
INDIANAPOLIS, INDIANA 46204(Address of principal executive offices)
|(317) 266-0100
(Registrant's Telephone Number,
Including Area Code)                                                 |  | (317) 266-0100
(Registrant's Telephone Number,
Including Area Code)                                             

# 

NOT APPLICABLE 
(Former Name, Former
Address and Former Fiscal Year, if Changed Since Last Report)

Indicate
by check mark whether the registrant: (1) has filed all 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.

Yesý
No o

Indicate by check mark whether the
registrant is an accelerated filer (as defined in Rule 126-2 of the Act).

Yesý
No o

---

The
number of shares outstanding of each of Emmis Communications Corporations classes of
common stock, as of October 1, 2003, was:

|49,686,001 |  | Shares of Class A Common Stock, $.01 Par Value
|---------- |  | ----------------------------------------------
|5,030,002  |  | Shares of Class B Common Stock, $.01 Par Value
|0          |  | Shares of Class C Common Stock, $.01 Par Value

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

---

# INDEX

Page

`INDEPENDENT ACCOUNTANTS' REVIEW REPORT...................................................................  4

PART I  - FINANCIAL INFORMATION

     Item 1.  Financial Statements.......................................................................  5

       Emmis Communications Corporation and Subsidiaries:

           Condensed Consolidated Statements of Operations for the three
                and six months ended August 31, 2002 and 2003............................................  5

           Condensed Consolidated Balance Sheets
                as of February 28, 2003 and August 31, 2003..............................................  7

           Condensed Consolidated Statements of Cash Flows
                for the six months ended August 31, 2002 and 2003........................................  9

       Emmis Operating Company and Subsidiaries:

           Condensed Consolidated Statements of Operations for the three
                and six months ended August 31, 2002 and 2003...........................................  11

           Condensed Consolidated Balance Sheets
                as of February 28, 2003 and August 31, 2003.............................................  12

           Condensed Consolidated Statements of Cash Flows
                for the six months ended August 31, 2002 and 2003.......................................  14

       Notes to Condensed Consolidated Financial Statements.............................................  16

     Item 2.  Management's Discussion and Analysis of
                Financial Condition and Results of Operations...........................................  37

     Item 3.  Quantitative and Qualitative Disclosures
                about Market Risk.......................................................................  48

     Item 4.  Controls and Procedures...................................................................  48

PART II  - OTHER INFORMATION

     Item 4.  Submission of Matters to a Vote of Security Holders.......................................  50

     Item 6.  Exhibits and Reports on Form 8-K..........................................................  51

     Signatures   ......................................................................................  53`

---

# INDEPENDENT ACCOUNTANTS REVIEW
REPORT

The Board of Directors
and ShareholdersEmmis Communications Corporation and Subsidiaries

We have reviewed the accompanying
condensed consolidated balance sheet of Emmis Communications Corporation and Subsidiaries
as of August 31, 2003, and the related condensed consolidated statements of operations and
cash flows for the three-month and six-month periods ended August 31, 2003 and 2002. We
have also reviewed the accompanying condensed consolidated balance sheet of Emmis
Operating Company (a wholly owned subsidiary of Emmis Communications Corporation) and
Subsidiaries as of August 31, 2003, and the related condensed consolidated statements of
operations and cash flows for the three-month and six-month periods ended August 31, 2003
and 2002. These financial statements are the responsibility of the Companys
management.

We conducted our reviews in
accordance with standards established by the American Institute of Certified Public
Accountants. A review of interim financial information consists principally of applying
analytical procedures to financial data, and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an audit
conducted in accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an opinion
regarding the financial statements taken as a whole. Accordingly, we do not express such
an opinion.

Based on our reviews, we are not
aware of any material modifications that should be made to the accompanying condensed
consolidated financial statements referred to above for them to be in conformity with
accounting principles generally accepted in the United States.

We have previously audited, in
accordance with auditing standards generally accepted in the United States, the
consolidated balance sheet of Emmis Communications Corporation and Subsidiaries as of
February 28, 2003, and the related consolidated statements of operations, changes in
shareholders equity and cash flows for the year then ended. We have also audited, in
accordance with auditing standards generally accepted in the United States, the
accompanying consolidated balance sheet of Emmis Operating Company and Subsidiaries as of
February 28, 2003, and the related consolidated statements of operations, changes in
shareholders equity and cash flows for the year then ended. In our report dated
April 11, 2003, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying condensed
consolidated balance sheets of Emmis Communications Corporation and Subsidiaries and Emmis
Operating Company and Subsidiaries as of February 28, 2003, is fairly stated, in all
material respects, in relation to the consolidated balance sheets from which it was
derived.

|                                         |  | /s/ ERNST & YOUNG LLP
|---------------------------------------- |  | ---------------------
|Indianapolis, Indiana
September 25, 2003 |  |                      

---

PART I  FINANCIAL
INFORMATIONITEM 1.   FINANCIAL STATEMENTS

EMMIS COMMUNICATIONS
CORPORATION AND SUBSIDIARIES  CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(Unaudited)  (In thousands, except
per share data)

|                                                           | Three Months Ended | Six Months Ended
|---------------------------------------------------------- | ------------------ | ----------------
|
|
|GROSS REVENUES                                             |                    |                 
|LESS:  AGENCY COMMISSIONS                                  |                    |                 
|                                                           |                    |                 
|NET REVENUES                                               |                    |                 
|OPERATING EXPENSES:                                        |                   
|Station operating expenses, excluding noncash compensation |                    |                 
|Corporate expenses, excluding noncash compensation         |                    |                 
|Noncash compensation                                       |                    |                 
|Depreciation and amortization                              |                    |                 
|                                                           |                    |                 
|Total operating expenses                                   |                    |                 
|                                                           |                    |                 
|OPERATING INCOME                                           |                    |                 
|                                                           |                    |                 
|OTHER INCOME (EXPENSE):                                    |                   
|Interest expense                                           |                    |                 
|Loss from unconsolidated affiliates                        |                    |                 
|Loss on debt extinguishment                                |                    |                 
|Gain on sale of assets                                     |                    |                 
|Minority interest income (expense)                         |                    |                 
|Other income (expense), net                                |                    |                 
|                                                           |                    |                 
|Total other income (expense)                               |                    |                 
|                                                           |                    |                 
|INCOME (LOSS) BEFORE INCOME TAXES AND                      |                   
|ACCOUNTING CHANGE                                          |                    |                 
|PROVISION FOR INCOME TAXES                                 |                    |                 
|                                                           |                    |                 
|INCOME (LOSS) BEFORE ACCOUNTING CHANGE                     |                    |                 
|CUMULATIVE EFFECT OF ACCOUNTING CHANGE,                    |                   
|NET OF TAXES OF $102,600 IN 2002                           |                    |                 
|                                                           |                    |                 
|NET INCOME (LOSS)                                          |                    |                 
|PREFERRED STOCK DIVIDENDS                                  |                    |                 
|                                                           |                    |                 
|NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS         |                    |                 
|                                                           |                    |                 

See independent accountants review
report and accompanying notes.

In
the three months ended August 31, 2002 and 2003, $4.8 million and $4.3 million,
respectively of our noncash compensation was attributable to our stations, while $1.0
million and $1.1 million, respectively was attributable to corporate. In the six months
ended August 31, 2002 and 2003, $9.5 million and $10.0 million, respectively of our
noncash compensation was attributable to our stations, while $1.6 million and $2.5
million, respectively was attributable to corporate.

---

EMMIS COMMUNICATIONS
CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(CONTINUED)(Unaudited) (In thousands, except
per share data)

|                                                            | Three Months Ended | Six Months Ended
|----------------------------------------------------------- | ------------------ | ----------------
|
|
|Basic net income (loss) available to common shareholders:   |                    |                 
|Before accounting change                                    |                    |                 
|Cumulative effect of accounting change, net of tax          |                    |                 
|                                                            |                    |                 
|Net income (loss) available to common shareholders          |                    |                 
|                                                            |                    |                 
|Basic weighted average common shares outstanding            |                    |                 
|Diluted net income (loss) available to common shareholders: |                    |                 
|Before accounting change                                    |                    |                 
|Cumulative effect of accounting change, net of tax          |                    |                 
|                                                            |                    |                 
|Net income (loss) available to common shareholders          |                    |                 
|                                                            |                    |                 
|Diluted weighted average common shares outstanding          |                    |                 

See independent accountants review
report and accompanying notes.

---

EMMIS COMMUNICATIONS
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS(In thousands, except
share data)

|                             | February 28, | August 31,  
|---------------------------- | ------------ | ------------
|
|
|
|CURRENT ASSETS:              |              |             
|Cash and cash equivalents    |              | $     16,079
|Accounts receivable, net     |              | 102,345     
|Prepaid expenses             |              | 15,596      
|Other                        |              | 25,661      
|                             |              |             
|Total current assets         |              | 159,681     
|PROPERTY AND EQUIPMENT, NET  |              | 223,430     
|INTANGIBLE ASSETS (Note 2):  |              |             
|Indefinite-lived intangibles |              | 1,508,886   
|Goodwill                     |              | 138,986     
|Other intangibles, net       |              | 28,861      
|                             |              |             
|Total intangible assets      |              | 1,676,733   
|OTHER ASSETS, NET            |              | 56,569      
|                             |              |             
|Total assets                 |              | $2,116,413  
|                             |              |             

See independent accountants review
report and accompanying notes.

---

EMMIS COMMUNICATIONS
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)(In thousands, except
share data)

|                                                                      | February 28, | August 31,
|--------------------------------------------------------------------- | ------------ | ----------
|
|
|
|CURRENT LIABILITIES:                                                  |              |           
|Accounts Payable                                                      |              |           
|Current maturities of long-term debt                                  |              |           
|Current portion of TV program rights payable                          |              |           
|Accrued salaries and commissions                                      |              |           
|Accrued interest                                                      |              |           
|Deferred revenue                                                      |              |           
|Other                                                                 |              |           
|                                                                      |              |           
|Total current liabilities                                             |              |           
|LONG-TERM DEBT, NET OF CURRENT MATURITIES                             |              |           
|OTHER LONG-TERM DEBT, NET OF CURRENT MATURITIES                       |              |           
|TV PROGRAM RIGHTS PAYABLE, NET OF CURRENT PORTION                     |              |           
|MINORITY INTEREST                                                     |              |           
|OTHER NONCURRENT LIABILITIES                                          |              |           
|DEFERRED INCOME TAXES                                                 |              |           
|                                                                      |              |           
|Total liabilities                                                     |              |           
|                                                                      |              |           
|COMMITMENTS AND CONTINGENCIES                                         |              |           
|SHAREHOLDERS' EQUITY:                                                 |              |           
|Series A cumulative convertible preferred stock, $0.01 par value;     |              |           
|$50.00 liquidation value; authorized 10,000,000 shares; issued and    |              |           
|outstanding 2,875,000 shares at February 28, 2003 and August 31, 2003 |              |           
|Class A common stock, $.01 par value; authorized 170,000,000 shares;  |              |           
|issued and outstanding 48,874,017 shares at February 28, 2003         |              |           
|and 49,556,126 shares at August 31, 2003                              |              |           
|Class B common stock, $.01 par value; authorized 30,000,000 shares;   |              |           
|issued and outstanding 5,011,348 shares at February 28, 2003          |              |           
|and 5,030,002 shares at August 31, 2003                               |              |           
|Additional paid-in capital                                            |              |           
|Accumulated deficit                                                   |              |           
|Accumulated other comprehensive loss                                  |              |           
|                                                                      |              |           
|Total shareholders' equity                                            |              |           
|                                                                      |              |           
|Total liabilities and shareholders' equity                            |              |           
|                                                                      |              |           

See independent accountants review
report and accompanying notes.

---

EMMIS COMMUNICATIONS
CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) (Dollars in thousands)

|                                                       | Six Months Ended August 31,
|------------------------------------------------------ | ---------------------------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                  |                            
|Net income (loss)                                      |                            
|Adjustments to reconcile net income (loss) to net cash |                            
|provided by operating activities -                     |                            
|Cumulative effect of accounting change                 |                            
|Depreciation and amortization                          |                            
|Accretion of interest on senior discount notes,        |                            
|including amortization of related debt costs           |                            
|Provision for bad debts                                |                            
|Provision for deferred income taxes                    |                            
|Noncash compensation                                   |                            
|Loss on debt extinguishment                            |                            
|Gain on sale of assets                                 |                            
|Other                                                  |                            
|Changes in assets and liabilities -                    |                            
|Accounts receivable                                    |                            
|Prepaid expenses and other current assets              |                            
|Other assets                                           |                            
|Accounts payable and accrued liabilities               |                            
|Deferred revenue                                       |                            
|Other liabilities                                      |                            
|                                                       |                            
|Net cash provided by operating activities              |                            
|                                                       |                            
|CASH FLOWS FROM INVESTING ACTIVITIES:                  |                            
|Purchases of property and equipment                    |                            
|Cash paid for acquisitions                             |                            
|Proceeds from sale of assets, net                      |                            
|Deposits and other                                     |                            
|                                                       |                            
|Net cash provided by (used in) investing activities    |                            
|                                                       |                            

See independent accountants review
report and accompanying notes.

---

EMMIS COMMUNICATIONS
CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)(Unaudited) (Dollars in thousands)

|                                                            | Six Months Ended August 31,
|----------------------------------------------------------- | ---------------------------
|
|CASH FLOWS FROM FINANCING ACTIVITIES:                       |                            
|Payments on long-term debt                                  |                            
|Proceeds from long-term debt                                |                            
|Proceeds from issuance of the Company's Class A common      |                            
|stock, net of transaction costs                             |                            
|Proceeds from exercise of stock options                     |                            
|Preferred stock dividends paid                              |                            
|Premium paid to redeem senior discount notes                |                            
|Purchase of the Company's Class A common stock              |                            
|Debt related costs                                          |                            
|                                                            |                            
|Net cash provided by (used in) financing activities         |                            
|                                                            |                            
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS            |                            
|CASH AND CASH EQUIVALENTS:                                  |                            
|Beginning of period                                         |                            
|                                                            |                            
|End of period                                               |                            
|                                                            |                            
|SUPPLEMENTAL DISCLOSURES:                                   |                            
|Cash paid for -                                             |                            
|Interest                                                    |                            
|Income taxes                                                |                            
|Non-cash financing transactions-                            |                            
|Value of stock issued to employees under stock swap program |                            
|and to satisfied accrued incentives                         |                            
|ACQUISITION OF WBPG-TV:                                     |                            
|Fair value of assets acquired                               |                            
|Cash paid                                                   |                            
|                                                            |                            
|Liabilities recorded                                        |                            
|                                                            |                            
|ACQUISITION OF AUSTIN RADIO:                                |                            
|Fair value of assets acquired                               |                            
|Cash paid                                                   |                            
|                                                            |                            
|Liabilities recorded                                        |                            
|                                                            |                            

See independent accountants review
report and accompanying notes.

---

EMMIS OPERATING COMPANY
AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS(Unaudited) (Dollars in thousands)

|                                                           | Three Months Ended | Six Months Ended
|---------------------------------------------------------- | ------------------ | ----------------
|
|
|GROSS REVENUES                                             |                    |                 
|LESS:  AGENCY COMMISSIONS                                  |                    |                 
|                                                           |                    |                 
|NET REVENUES                                               |                    |                 
|OPERATING EXPENSES:                                        |                    |                 
|Station operating expenses, excluding noncash compensation |                    |                 
|Corporate expenses, excluding noncash compensation         |                    |                 
|Noncash compensation                                       |                    |                 
|Depreciation and amortization                              |                    |                 
|                                                           |                    |                 
|Total operating expenses                                   |                    |                 
|                                                           |                    |                 
|OPERATING INCOME                                           |                    |                 
|                                                           |                    |                 
|OTHER INCOME (EXPENSE):                                    |                    |                 
|Interest expense                                           |                    |                 
|Loss from unconsolidated affiliates                        |                    |                 
|Loss on debt extinguishment                                |                    |                 
|Gain on sale of assets                                     |                    |                 
|Minority interest income (expense)                         |                    |                 
|Other income (expense), net                                |                    |                 
|                                                           |                    |                 
|Total other income (expense)                               |                    |                 
|                                                           |                    |                 
|INCOME BEFORE INCOME TAXES                                 |                    |                 
|AND ACCOUNTING CHANGE                                      |                    |                 
|PROVISION FOR INCOME TAXES                                 |                    |                 
|                                                           |                    |                 
|INCOME BEFORE ACCOUNTING CHANGE                            |                    |                 
|CUMULATIVE EFFECT OF ACCOUNTING                            |                    |                 
|CHANGE, NET OF TAXES OF $102,600 IN 2002                   |                    |                 
|                                                           |                    |                 
|NET INCOME (LOSS)                                          |                    |                 
|                                                           |                    |                 

See independent accountants review
report and accompanying notes.

In
the three months ended August 31, 2002 and 2003, $4.8 million and $4.3 million,
respectively of our noncash compensation was attributable to our stations, while $1.0
million and $1.1 million, respectively was attributable to corporate. In the six months
ended August 31, 2002 and 2003, $9.5 million and $10.0 million, respectively of our
noncash compensation was attributable to our stations, while $1.6 million and $2.5
million, respectively was attributable to corporate.

---

EMMIS OPERATING COMPANY
AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS(Dollars in thousands, except
share data)

|                             | February 28, | August 31,
|---------------------------- | ------------ | ----------
|
|
|
|CURRENT ASSETS:              |              |           
|Cash and cash equivalents    |              | $         
|Accounts receivable, net     |              |           
|Prepaid expenses             |              |           
|Other                        |              |           
|                             |              |           
|Total current assets         |              |           
|PROPERTY AND EQUIPMENT, NET  |              |           
|INTANGIBLE ASSETS (NOTE 2):  |              |           
|Indefinite-lived intangibles |              |           
|Goodwill                     |              |           
|Other intangibles, net       |              |           
|                             |              |           
|Total intangible assets      |              |           
|OTHER ASSETS, NET            |              |           
|                             |              |           
|Total assets                 |              | $         
|                             |              |           

See independent accountants review
report and accompanying notes.

---

EMMIS OPERATING COMPANY
AND SUBSIDIARIESCONDENSED CONSOLIDATED
BALANCE SHEETS (CONTINUED)(Dollars in thousands, except
share data)

|                                                                | February 28,
2003
(Note 1) | August 31,
2003
(Unaudited)
|--------------------------------------------------------------- | -------------------------- | ---------------------------
|
|CURRENT LIABILITIES:                                            |                            |                            
|Accounts Payable                                                |                            |                            
|Current maturities of long-term debt                            |                            |                            
|Current portion of TV program rights payable                    |                            |                            
|Accrued salaries and commissions                                |                            |                            
|Accrued interest                                                |                            |                            
|Deferred revenue                                                |                            |                            
|Other                                                           |                            |                            
|                                                                |                            |                            
|Total current liabilities                                       |                            |                            
|LONG-TERM DEBT, NET OF CURRENT MATURITIES                       |                            |                            
|OTHER LONG-TERM DEBT, NET OF CURRENT MATURITIES                 |                            |                            
|TV PROGRAM RIGHTS PAYABLE, NET OF CURRENT PORTION               |                            |                            
|MINORITY INTEREST                                               |                            |                            
|OTHER NONCURRENT LIABILITIES                                    |                            |                            
|DEFERRED INCOME TAXES                                           |                            |                            
|                                                                |                            |                            
|Total liabilities                                               |                            |                            
|                                                                |                            |                            
|COMMITMENTS AND CONTINGENCIES                                   |                            |                            
|SHAREHOLDER'S EQUITY:                                           |                            |                            
|Common stock, no par value; authorized , issued and outstanding |                            |                            
|1,000 shares at February 28, 2003 and August 31, 2003           |                            |                            
|Additional paid-in capital                                      |                            |                            
|Accumulated deficit                                             |                            |                            
|Accumulated other comprehensive loss                            |                            |                            
|                                                                |                            |                            
|Total shareholder's equity                                      |                            |                            
|                                                                |                            |                            
|Total liabilities and shareholder's equity                      |                            |                            
|                                                                |                            |                            

See independent accountants review
report and accompanying notes.

---

EMMIS OPERATING COMPANY
AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS(Unaudited) (Dollars in thousands)

|                                                       | Six Months Ended August 31,
|------------------------------------------------------ | ---------------------------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                  |                            
|Net income (loss)                                      |                            
|Adjustments to reconcile net income (loss) to net cash |                            
|provided by (used in) operating activities -           |                            
|Cumulative effect of accounting change                 |                            
|Depreciation and amortization                          |                            
|Provision for bad debts                                |                            
|Provision for deferred income taxes                    |                            
|Noncash compensation                                   |                            
|Loss on debt extinguishment                            |                            
|Gain on sale of assets                                 |                            
|Other                                                  |                            
|Changes in assets and liabilities -                    |                            
|Accounts receivable                                    |                            
|Prepaid expenses and other current assets              |                            
|Other assets                                           |                            
|Accounts payable and accrued liabilities               |                            
|Deferred revenue                                       |                            
|Other liabilities                                      |                            
|                                                       |                            
|Net cash provided by (used in) operating activities    |                            
|                                                       |                            
|CASH FLOWS FROM INVESTING ACTIVITIES:                  |                            
|Purchases of property and equipment                    |                            
|Cash paid for acquisitions                             |                            
|Proceeds from sale of assets, net                      |                            
|Deposits and other                                     |                            
|                                                       |                            
|Net cash provided by (used in) investing activities    |                            
|                                                       |                            

See independent accountants review
report and accompanying notes.

---

EMMIS OPERATING COMPANY
AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)(Unaudited) (Dollars in thousands)

|                                                            | Six Months Ended August 31,
|----------------------------------------------------------- | ---------------------------
|
|CASH FLOWS FROM FINANCING ACTIVITIES:                       |                            
|Payments on long-term debt                                  |                            
|Proceeds from long-term debt                                |                            
|Distributions to parent                                     |                            
|Contributions from parent and other                         |                            
|Debt related costs                                          |                            
|                                                            |                            
|Net cash provided by (used in) financing activities         |                            
|                                                            |                            
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS            |                            
|CASH AND CASH EQUIVALENTS:                                  |                            
|Beginning of period                                         |                            
|                                                            |                            
|End of period                                               |                            
|                                                            |                            
|SUPPLEMENTAL DISCLOSURES:                                   |                            
|Cash paid for -                                             |                            
|Interest                                                    |                            
|Income taxes                                                |                            
|Non-cash financing transactions-                            |                            
|Value of stock issued to employees under stock swap program |                            
|and to satisfied accrued incentives                         |                            
|ACQUISITION OF WBPG-TV:                                     |                            
|Fair value of assets acquired                               |                            
|Cash paid                                                   |                            
|                                                            |                            
|Liabilities recorded                                        |                            
|                                                            |                            
|ACQUISITION OF AUSTIN RADIO:                                |                            
|Fair value of assets acquired                               |                            
|Cash paid                                                   |                            
|                                                            |                            
|Liabilities recorded                                        |                            
|                                                            |                            

See independent accountants review
report and accompanying notes.

---

EMMIS COMMUNICATIONS
CORPORATION AND SUBSIDIARIESAND EMMIS OPERATING
COMPANY AND SUBSIDIARIES NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS(DOLLARS IN THOUSANDS UNLESS INDICATED OTHERWISE,
EXCEPT SHARE DATA) August 31, 2003(Unaudited)

Note 1. Summary of
Significant Accounting Policies

Preparation of Interim
Financial Statements

Pursuant
to the rules and regulations of the Securities and Exchange Commission, the condensed
consolidated interim financial statements included herein have been prepared, without
audit, by Emmis Communications Corporation (ECC) and its subsidiaries
(collectively, our, us, Emmis or the
Company) and by Emmis Operating Company and its subsidiaries (collectively
EOC). Unless otherwise noted, all disclosures contained in the Notes to
Condensed Consolidated Financial Statements in this Form 10-Q apply to Emmis and EOC. As
permitted under the applicable rules and regulations of the Securities and Exchange
Commission, certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to such rules and regulations;
however, Emmis believes that the disclosures are adequate to make the information
presented not misleading. The condensed consolidated financial statements included herein
should be read in conjunction with the consolidated financial statements and the notes
thereto included in the Annual Report for Emmis and EOC filed on Form 10-K for the year
ended February 28, 2003. The Companys results are subject to seasonal fluctuations.
Therefore, results shown on an interim basis are not necessarily indicative of results for
a full year.

In
the opinion of Emmis and EOC, respectively, the accompanying condensed consolidated
interim financial statements contain all material adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the consolidated financial position of
Emmis and EOC at August 31, 2003 and the results of their operations for the three and six
months ended August 31, 2002 and 2003 and their cash flows for the six months ended August
31, 2002 and 2003.

Stock-Based Compensation

The
Company accounts for its stock-based award plans in accordance with Accounting Principles
Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations, under which compensation expense is recorded to the extent that
the market price on the grant date of the underlying stock exceeds the exercise price. The
required unaudited pro forma net income and pro forma earnings per share as if the
stock-based awards had been accounted for using the provisions of Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation, are as follows:

|                                                    | Three Months Ended August 31, | Six Months Ended August 31,
|--------------------------------------------------- | ----------------------------- | ---------------------------
|
|
|Net Income (Loss) Available to Common Shareholders: |                               |                            
|As Reported                                         |                               |                            
|Plus:  Reported stock-based employee                |                               |                            
|compensation costs, net of tax                      |                               |                            
|Less:  Stock-based employee compensation            |                               |                            
|costs, net of tax, if fair value method had         |                               |                            
|been applied to all awards                          |                               |                            
|                                                    |                               |                            
|Pro Forma                                           |                               |                            
|                                                    |                               |                            
|Basic EPS:                                          |                               |                            
|As Reported                                         |                               |                            
|Pro Forma                                           |                               |                            
|Diluted EPS:                                        |                               |                            
|As Reported                                         |                               |                            
|Pro Forma                                           |                               |                            

The
fair value for these options was estimated at the date of grant using a Black-Scholes
option-pricing model with the following weighted average assumptions for options vesting
in 2002 and 2003:

|                         | Three Months Ended August 31, | Six Months Ended August 31,
|------------------------ | ----------------------------- | ---------------------------
|
|Risk-Free Interest Rate: | 3.6% - 5.4%                   | 3.6% - 5.4%                
|Expected Dividend Yield: | 0                             | 0                          
|Expected Life (Years):   | 8.3 - 8.6                     | 8.3 - 8.6                  
|Expected Volatility:     | 57.7% - 58.4%                 | 57.7% - 58.4%              

Advertising
Costs

The
Company defers the costs of major advertising campaigns for which future benefits are
demonstrated. These costs are amortized over the shorter of the estimated period benefited
(generally six months) or the remainder of the fiscal year. The Company had an immaterial
amount and $1.1 million of these costs deferred as of August 31, 2002 and 2003,
respectively.

Basic and Diluted
Net Income Per Common Share

Emmis

Basic
net income per common share is computed by dividing net income available to common
shareholders by the weighted-average number of common shares outstanding for the period.
Diluted net income per common share reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted.
Potentially dilutive securities at August 31, 2002 and 2003 consisted of stock options and
the 6.25% Series A cumulative convertible preferred stock. Neither the 6.25% Series A
cumulative convertible preferred stock nor the stock options are included in the
calculation of diluted net income per common share for the three and six months ended
August 31, 2002 as the effect of their conversion to common stock would be antidilutive.
Weighted average shares excluded from the calculation of diluted net income per share that
would result from the conversion of the 6.25% Series A cumulative convertible preferred
stock and the conversion of stock options amounted to approximately 3.8 million and 4.0
million shares for the three and six months ended August 31, 2002, respectively. The 6.25%
Series A cumulative convertible preferred stock was excluded from the calculation of
diluted net income per common share for the three and six months ended August 31, 2003 as
the effect of its conversion to common stock of 3.7 million shares would be antidilutive.

EOC

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

Cost Method
Investments

Each
quarter, the Company assesses impairment on its cost method investments. During the
quarter ended August 31, 2003, Emmis reduced the carrying value of one of its cost method
investments from $1.0 million to zero as the decline in the value of the investment, as
determined by management, was deemed to be other than temporary. This expense is reflected
in other income (expense), net in the accompanying condensed consolidated statements of
operations.

Recent Accounting
Pronouncements

On
March 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 145,
Rescission of SFAS Nos. 4, 44, and 64, Amendment of SFAS No. 13, and Technical Corrections(SFAS No. 145). 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. This pronouncement requires gains and losses related to debt
transactions to be classified in income from continuing operations. Although we did not
have any gains or losses from debt transactions in the current year, ECC had recorded an
extraordinary loss of $8.8 million, net of tax, and $11.1 million, net of tax, in the
three and six months ended August 31, 2002, respectively, and EOC had recorded an
extraordinary loss of $0.5 million, net of tax, and $2.9 million, net of tax, in the three
and six months ended August 31, 2002, respectively, in connection with debt
extinguishments. Accordingly, we retroactively reclassified the losses of $9.9 million and
$13.5 million, respectively, for ECC and $0.8 million and $4.4 million, respectively, for
EOC to include them in income from continuing operations.

On
March 1, 2003, the Company adopted Financial Accounting Standards Board Interpretation No.
45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others(FIN 45). FIN 45 applies to
contracts or indemnification agreements that contingently require the guarantor to make
payments to the guaranteed party based on changes in an underlying obligation that is
related to an asset, liability, or an equity security of the guaranteed party. FIN
45s disclosure requirements were effective for financial statements of interim or
annual periods ending after December 15, 2002. FIN 45s initial recognition and
initial measurement provisions were applicable on a prospective basis to guarantees issued
or modified after December 31, 2002, irrespective of the guarantors fiscal year-end.
The Company adopted the disclosure requirements of FIN 45 for its fiscal 2003 annual
report. Adoption of the initial recognition and initial measurement requirements of FIN 45
did not materially impact the Companys financial position, results of operations or
applicable disclosures.

On
January 1, 2003, the Financial Accounting Standards Board issued Financial Accounting
Standards Board Interpretation No. 46, Consolidation of Variable Interest Entities(FIN 46). FIN 46 addresses consolidation of business enterprises of variable
interest entities. FIN 46 is effective immediately for all variable interest entities
created after January 31, 2003 and for the first fiscal year or interim period beginning
after June 15, 2003 for variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. The Company has not acquired any
variable interest entities subsequent to January 31, 2003 and will therefore adopt FIN 46
for its quarterly report for the period ending November 30, 2003. The Company is currently
evaluating the impact, if any, of this pronouncement on its future consolidated results of
operations and consolidated balance sheets.

In
May 2003, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 150, Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity(SFAS No. 150). SFAS No. 150 requires
financial instruments within its scope to be classified as a liability (or an asset in
some circumstances). Many of these instruments were previously classified as equity. SFAS
150 is effective for our quarter ended November 30, 2003. The Company is currently
evaluating the impact, if any, of this pronouncement on its future consolidated results of
operations and consolidated balance sheets.

Note 2. Intangible Assets
and Goodwill

Indefinite-lived
Intangibles

Under
the guidance in Statement of Financial Accounting Standards No. 142 (Statement No.
142), the Companys FCC licenses are considered indefinite-lived intangibles.
These assets are not subject to amortization, but are tested for impairment at least
annually. As of August 31, 2003 and February 28, 2003, the carrying amounts of the
Companys FCC licenses were $1,620.2 million and $1,508.9 million, respectively. The
increase is attributable to the acquisitions discussed in Note 4.

In
accordance with Statement 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. 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 three months ended May 31, 2002.
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 year ended February 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

Statement
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 two-step impairment test
during the quarter ended May 31, 2002. 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 three months ended
May 31, 2002. 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 August 31, 2003 and February 28, 2003, the
carrying amount of the Companys goodwill was $162.8 million and $139.0 million,
respectively. The increase is attributable to the acquisitions discussed in Note 4. 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s definite-lived intangible 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. The following table
presents the gross carrying amount and accumulated amortization for each major class of
definite-lived intangible asset at February 28, 2003 and August 31, 2003:

|                              | February 28, 2003 | August 31, 2003
|----------------------------- | ----------------- | ---------------
|
|
|
|Foreign Broadcasting Licenses |                   |                
|Subscription Lists            |                   |                
|Lease Rights                  |                   |                
|Customer Lists                |                   |                
|Non-Compete Agreements        |                   |                
|Other                         |                   |                
|                              |                   |                
|TOTAL                         |                   |                
|                              |                   |                

Total
amortization expense from definite-lived intangibles for the three months ended August 31,
2002 and 2003 was $1.7 million and $1.5 million, respectively. Total amortization expense
from definite-lived intangibles for the six months ended August 31, 2002 and 2003 was $3.6
million and $3.1 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 August 31, 2003:

|FISCAL YEAR ENDED FEBRUARY 28 (29), | 
|----------------------------------- | 
|2004                                | 
|2005                                | 
|2006                                | 
|2007                                | 
|2008                                | 

As
acquisitions and/or dispositions occur in the future, amortization expense will vary from
the above table.

---

Note 3. Significant Events

WBPG-TV
Acquisition

Effective
March 1, 2003, the Company acquired substantially all of the assets of television station
WBPG-TV in Mobile, AL  Pensacola, FL from Pegasus Communications Corporation for a
cash purchase price of approximately $11.7 million, including transaction costs of $0.2
million. This acquisition will allow the Company to achieve duopoly efficiencies in the
market, such as lower programming acquisition costs and consolidation of general and
administrative functions, since Emmis already owns the Fox-affiliated television station
in the market, WALA. The acquisition was financed through borrowings under the credit
facility and was accounted for as a purchase. The Company recorded $0.2 million of
goodwill, all of which is deductible for income tax purposes.

For
this transaction, the aggregate purchase price, including transaction costs of $0.2
million, was allocated as follows based upon a preliminary appraisal. Material changes to
the purchase price allocation are not expected.

|Asset Description                         | Amount | Asset Lives
|----------------------------------------- | ------ | -----------
|Accounts Receivable                       |        |            
|Prepaids                                  |        |            
|Broadcasting equipment                    |        |            
|Office equipment                          |        |            
|Vehicles                                  |        |            
|                                          |        |            
|Total tangible assets                     |        |            
|                                          |        |            
|Customer list                             |        |            
|Affiliation agreement                     |        |            
|FCC license (Indefinite-lived intangible) |        |            
|Goodwill                                  |        |            
|                                          |        |            
|Total intangible assets                   |        |            
|                                          |        |            
|Programming acquired                      |        |            
|Less:  Programming liabilities assumed    |        |            
|                                          |        |            
|Total purchase price                      |        |            
|                                          |        |            

Sale of Mira
Mobile

Effective
June 5, 2003, Emmis sold its mobile television production company, Mira Mobile Television,
to Shooters Production Services, Inc. for $3.9 million in cash, plus payments for working
capital. Emmis received $3.3 million of the purchase price at closing and received a
promissory note due October 31, 2005 for the remaining $0.6 million. Emmis had acquired
this business in connection with the Lee acquisition in October 2000. The book value of
the long-lived assets as of May 31, 2003 was $3.1 million and the operating performance of
Mira Mobile was not material to the Company. Emmis recorded a gain on the sale of these
assets of approximately $0.9 million in the accompanying condensed consolidated statements
of operations.

---

Credit Facility
Amendment

On
June 6, 2003, EOC amended its credit facility to allow for the acquisition of the
controlling interest in the Austin partnership, as described below. Specifically, the
amendment increased the amount of Investments (as defined in the credit facility) that EOC
could make to allow for the investment in the partnership. In addition to permitting the
Austin acquisition, the amendment provided additional room under certain financial
covenants applicable to the Revolver, Term A loan and Term B loan. More specifically,
required decreases in senior leverage and total leverage ratios were delayed from November
30, 2003 to June 1, 2004.

Austin Radio
Acquisition

On
July 1, 2003, Emmis effectively acquired a controlling interest of 50.1% in a partnership
that owns six radio stations in the Austin, Texas metropolitan area for a cash purchase
price of approximately $106.4 million, including transaction costs of $1.0 million. These
six stations are KLBJ-AM, KLBJ-FM, KDHT-FM, (formerly KXMG-FM), KROX-FM, KGSR-FM and
KEYI-FM. This acquisition allowed Emmis to diversify its radio portfolio and participate
in another large, high-growth radio market. The acquisition was financed through
borrowings under the credit facility and was accounted for as a purchase. The Company
recorded $23.6 million of goodwill, all of which is deductible for income tax purposes. In
addition, Emmis has the option, but not the obligation, to purchase its 49.9%
partners entire interest in the partnership after a period of approximately five
years based on an 18-multiple of trailing 12-month cash flow.

For
this transaction, the aggregate purchase price, including transaction costs of $1.0
million, was allocated as follows based upon a preliminary appraisal. Material changes to
the purchase price allocation are not expected.

|Asset Description                         | Amount | Asset Lives
|----------------------------------------- | ------ | -----------
|Accounts receivable                       |        |            
|Other current assets                      |        |            
|Land and buildings                        |        |            
|Broadcasting equipment                    |        |            
|Office equipment                          |        |            
|Vehicles                                  |        |            
|Other                                     |        |            
|                                          |        |            
|Total tangible assets                     |        |            
|                                          |        |            
|Customer list                             |        |            
|Talent contract                           |        |            
|Lease rights                              |        |            
|Affiliation agreement                     |        |            
|FCC license (Indefinite-lived intangible) |        |            
|Goodwill                                  |        |            
|                                          |        |            
|Total intangible assets                   |        |            
|                                          |        |            
|Investment and other long-term assets     |        |            
|Less:  minority interest                  |        |            
|Less:  current liabilities                |        |            
|                                          |        |            
|Total purchase price                      |        |            
|                                          |        |            

Note 4. Pro Forma
Financial Information

Emmis

Unaudited
pro forma summary information is presented below for the three and six months ended August
31, 2002 and 2003, assuming the following events all had occurred on the first day of the
pro forma periods presented below: (a) the acquisition (and related borrowings) of (i) a
controlling interest of 50.1% in a partnership that owns six radio stations in the Austin,
Texas metropolitan area in July 2003 and (ii) WBPG-TV in March 2003 and (b) the
disposition (and related debt repayment) of (i) KALC-FM and KXPK-FM in May 2002 and (ii)
Mira Mobile, a mobile television production company, in June 2003.

Preparation
of the pro forma summary information was based upon assumptions deemed appropriate by the
Companys management. The pro forma summary information presented below is not
necessarily indicative of the results that actually would have occurred if the
transactions indicated above had been consummated at the beginning of the periods
presented, and is not intended to be a projection of future results.

`Three Months                       Six Months
                                                         Ended August 31,                   Ended August 31,
                                                       2002            2003               2002            2003
                                                   --------------  -------------      --------------  -------------
                                                    (Pro Forma)                        (Pro Forma)
                                                    (In thousands, except per share data)

Net revenues                                           $ 148,436      $ 158,159           $ 289,757      $ 305,790
                                                   ==============  =============      ==============  =============

Net income before accounting change                     $ (4,439)      $ 10,141            $ (2,071)      $ 14,454
                                                   ==============  =============      ==============  =============
Net income (loss) available to common
  shareholders before accounting
  change                                                $ (6,685)       $ 7,895            $ (6,563)       $ 9,962
                                                   ==============  =============      ==============  =============

Net income (loss) per share available to
  common shareholders before accounting
  change:

  Basic                                                  $ (0.13)        $ 0.15             $ (0.13)        $ 0.18
                                                   ==============  =============      ==============  =============
  Diluted                                                $ (0.13)        $ 0.14             $ (0.13)        $ 0.18
                                                   ==============  =============      ==============  =============

Weighted average shares outstanding:

  Basic                                                   53,083         54,260              50,007         54,449
  Diluted                                                 53,083         54,546              50,007         54,823`

The
pro forma results exclude approximately $0.9 million of costs recorded by the seller
directly attributable to the Austin acquisition in the three and six months ended August
31, 2003.

---

EOC

Unaudited
pro forma summary information is presented below for the three and six months ended August
31, 2002 and 2003, assuming the following events all had occurred on the first day of the
pro forma periods presented below: (a) the acquisition (and related borrowings) of (i) a
controlling interest of 50.1% in a partnership that owns six radio stations in the Austin,
Texas metropolitan area in July 2003 and (ii) WBPG-TV in March 2003 and (b) the
disposition (and related debt repayment) of (i) KALC-FM and KXPK-FM in May 2002 and (ii)
Mira Mobile, a mobile television production company, in June 2003.

Preparation
of the pro forma summary information was based upon assumptions deemed appropriate by the
Companys management. The pro forma summary information presented below is not
necessarily indicative of the results that actually would have occurred if the
transactions indicated above had been consummated at the beginning of the periods
presented, and is not intended to be a projection of future results.

`Three Months                        Six Months
                                                         Ended August 31,                   Ended August 31,
                                                       2002            2003               2002            2003
                                                   --------------  -------------      --------------  -------------
                                                            (Pro Forma)                        (Pro Forma)
                                                                (In thousands, except per share data)

Net revenues                                           $ 148,436      $ 158,159           $ 289,757      $ 305,790
                                                   ==============  =============      ==============  =============

Net income before accounting change                    $   8,103      $  14,356           $  15,536      $  22,898
                                                   ==============  =============      ==============  =============`

The
pro forma results exclude approximately $0.9 million of costs recorded by the seller
directly attributable to the Austin acquisition in the three and six months ended August
31, 2003.

Note 5. Comprehensive
Income (Loss)

Emmis

Comprehensive
income (loss) was comprised of the following for the three and six month periods ended
August 31, 2002 and 2003:

`Three Months                   Six Months
                                                         Ended August 31,               Ended August 31,
                                                       2002            2003           2002            2003
                                                   --------------  -------------  -------------   -------------
Net income (loss)                                     $  (4,556)      $   9,754    $ (170,130)       $  12,356
Translation adjustment
                                                         (3,371)          1,250        (8,519)           1,623
Change in fair value of derivative
    instruments, net of associated tax benefit
                                                               -            776           (33)           1,875
                                                   --------------  -------------  -------------   -------------

Total comprehensive income (loss)                     $  (7,927)      $  11,780    $ (178,682)       $  15,854
                                                   ==============  =============  =============   =============`

The majority of the translation
adjustment for the three and six months ended August 31, 2002 relates to the foreign
currency devaluation in Argentina, where we have a 75% ownership interest in two radio
stations.

EOC

Comprehensive
income (loss) was comprised of the following for the three and six month periods ended
August 31, 2002 and 2003:

`Three Months                     Six Months
                                                           Ended August 31,                Ended August 31,
                                                         2002            2003            2002            2003
                                                     --------------  -------------   -------------   -------------
Net income (loss)                                        $   7,986      $  13,969     $ (152,523)       $  20,800
Translation adjustment
                                                           (3,371)          1,250         (8,519)           1,623
Change in fair value of derivative
     instruments, net of associated tax benefit
                                                                 -            776            (33)           1,875
                                                     --------------  -------------   -------------   -------------

Total comprehensive income (loss)                        $   4,615      $  15,995     $ (161,075)       $  24,298
                                                     ==============  =============   =============   =============`

The majority of the translation
adjustment for the three and six months ended August 31, 2002 relates to the foreign
currency devaluation in Argentina, where we have a 75% ownership interest in two radio
stations.

Note 6. Segment
Information

The
Companys operations are aligned into three business segments: Radio, Television, and
Publishing and Other. 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. Noncash compensation expense for fiscal 2003
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 three months ended August 31, 2002 and 2003 were $2.7
million and $3.5 million, respectively, and $4.4 million and $5.3 million for the six
months ended August 31, 2002 and 2003, respectively. The carrying value of long lived
assets of this radio station as of August 31, 2002 and 2003 was $6.4 million and $8.9
million, respectively. Total revenues of our two radio stations in Buenos Aires, Argentina
for the three months ended August 31, 2002 and 2003 were $0.4 million and $1.1 million,
respectively. Total revenues of our two radio stations in Buenos Aires, Argentina for the
six months ended August 31, 2002 and 2003 were $0.9 million and $1.9 million,
respectively. The carrying value of long lived assets of these radio stations as of August
31, 2002 and 2003 was $4.7 million and $5.2 million, respectively.

The
accounting policies as described in the summary of significant accounting policies
included in the Companys Annual Report filed on Form 10-K for the year ended
February 28, 2003 and in Note 1 to these condensed consolidated financial statements, are
applied consistently across segments.

Unless
otherwise noted, all information pertaining to segments applies to Emmis and EOC.

`Three Months Ended                                                               Publishing
August 31, 2003                                   Radio         Television        and Other        Corporate      Consolidated
--------------------------------------------  --------------- ---------------- ---------------- ---------------- ----------------
                                               (Unaudited)

Net revenues                                        $ 81,159         $ 56,052         $ 18,498              $ -        $ 155,709
Station operating expenses,
   excluding noncash compensation                     43,511           35,769           16,342                -           95,622
Corporate expenes, excluding
   noncash compensation                                    -                -                -            5,861            5,861
Noncash compensation                                   1,949            1,733              609            1,117            5,408
Depreciation and amortization                          2,414            7,468              221            1,504           11,607
                                              --------------- ---------------- ---------------- ---------------- ----------------
Operating income (loss)                             $ 33,285         $ 11,082          $ 1,326         $ (8,482)        $ 37,211
                                              =============== ================ ================ ================ ================
Total assets                                     $ 1,061,210      $ 1,046,147         $ 78,890         $ 79,010      $ 2,265,257
                                              =============== ================ ================ ================ ================

With respect to EOC, the above information would be identical, except corporate total assets would be $71,956 and consolidated total
assets would be $2,258,203.`

`Three Months Ended                                                               Publishing
August 31, 2002                                   Radio         Television        and Other        Corporate      Consolidated
--------------------------------------------  --------------- ---------------- ---------------- ---------------- ----------------
                                               (Unaudited)

Net revenues                                        $ 69,890         $ 55,426         $ 17,906              $ -        $ 143,222
Station operating expenses,
   excluding noncash compensation                     35,100           35,252           15,613                -           85,965
Corporate expenes, excluding
   noncash compensation                                    -                -                -            5,046            5,046
Noncash compensation                                   2,727            1,524              500            1,024            5,775
Depreciation and amortization                          1,930            7,049              459            1,155           10,593
                                              --------------- ---------------- ---------------- ---------------- ----------------
Operating income (loss)                             $ 30,133         $ 11,601          $ 1,334         $ (7,225)        $ 35,843
                                              =============== ================ ================ ================ ================
Total assets                                       $ 900,366      $ 1,040,435         $ 79,228         $ 97,996      $ 2,118,025
                                              =============== ================ ================ ================ ================


With respect to EOC, the above information would be identical, except corporate total assets would be $90,026 and consolidated total
assets would be $2,110,055.`

`Six Months Ended                                                                 Publishing
August 31, 2003                                   Radio         Television        and Other        Corporate      Consolidated
--------------------------------------------  --------------- ---------------- ---------------- ---------------- ----------------
                                               (Unaudited)

Net revenues                                       $ 145,756        $ 116,350         $ 35,964              $ -        $ 298,070
Station operating expenses,
   excluding noncash compensation                     78,690           74,029           32,561                -          185,280
Corporate expenes, excluding
   noncash compensation                                    -                -                -           11,624           11,624
Noncash compensation                                   4,350            4,134            1,479            2,508           12,471
Depreciation and amortization                          4,388           15,119              438            3,014           22,959
                                              --------------- ---------------- ---------------- ---------------- ----------------
Operating income (loss)                             $ 58,328         $ 23,068          $ 1,486        $ (17,146)        $ 65,736
                                              =============== ================ ================ ================ ================
Total assets                                     $ 1,061,210      $ 1,046,147         $ 78,890         $ 79,010      $ 2,265,257
                                              =============== ================ ================ ================ ================


With respect to EOC, the above information would be identical, except corporate total assets would be $71,956 and consolidated total
assets would be $2,258,203.`

`Six Months Ended                                                                 Publishing
August 31, 2002                                   Radio         Television        and Other        Corporate      Consolidated
--------------------------------------------  --------------- ---------------- ---------------- ---------------- ----------------
                                               (Unaudited)


Net revenues                                       $ 132,614        $ 112,583         $ 34,831              $ -        $ 280,028
Station operating expenses,
   excluding noncash compensation                     69,508           72,064           30,723                -          172,295
Corporate expenes, excluding
   noncash compensation                                    -                -                -           10,179           10,179
Noncash compensation                                   5,139            3,206            1,149            1,636           11,130
Depreciation and amortization                          4,023           13,979            1,049            2,301           21,352
                                              --------------- ---------------- ---------------- ---------------- ----------------
Operating income (loss)                             $ 53,944         $ 23,334          $ 1,910        $ (14,116)        $ 65,072
                                              =============== ================ ================ ================ ================
Total assets                                       $ 900,366      $ 1,040,435         $ 79,228         $ 97,996      $ 2,118,025
                                              =============== ================ ================ ================ ================


With respect to EOC, the above information would be identical, except corporate total assets would be $90,026 and consolidated total
assets would be $2,110,055.`

Note 7. Financial
Information for Subsidiary Guarantors  and Subsidiary Non-Guarantors of Emmis
Operating Company

The
8 1/8% senior subordinated notes of EOC are fully and unconditionally guaranteed, jointly
and severally, by certain direct and indirect subsidiaries of EOC (the Subsidiary
Guarantors). As of February 28, 2003 and August 31, 2003, subsidiaries holding
EOCs interest in its radio stations in Austin, Texas, Hungary and Argentina, as well
as certain other subsidiaries (such as those conducting joint ventures with third
parties), did not guarantee the senior subordinated notes (the Subsidiary
Non-Guarantors). The claims of creditors of the Subsidiary Non-Guarantors have
priority over the rights of EOC to receive dividends or distributions from such
subsidiaries.

Presented
below is condensed consolidating financial information for the EOC Parent Company Only,
the Subsidiary Guarantors and the Subsidiary Non-Guarantors as of February 28, 2003 and
August 31, 2003 and for the three and six months ended August 31, 2002 and 2003. EOC uses
the equity method in its Parent Company Only information with respect to investments in
subsidiaries.

---

Emmis Operating CompanyCondensed Consolidating
Balance Sheet As of August 31, 2003 (Unaudited)

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

CURRENT ASSETS:
  Cash and cash equivalents                          $ 1,421       $ 7,642       $ 5,033             $ -       $ 14,096
  Accounts receivable, net                                 -       109,766         9,242               -        119,008
  Prepaid expenses                                     1,791        17,265           226               -         19,282
  Other                                                  831        15,978            69               -         16,878
                                               -------------- ------------- ------------- ------------------------------
    Total current assets                               4,043       150,651        14,570               -        169,264

  Property and equipment, net                         33,618       176,865         7,171               -        217,654
  Intangible assets, net                               1,735     1,669,959       153,783               -      1,825,477
  Investment in affiliates                         2,016,860             -             -      (2,016,860)             -
  Other assets, net                                   42,474        10,861         2,578         (10,105)        45,808
                                                                                                         ---------------
                                               -------------- ------------- ------------- ------------------------------
    Total assets                                 $ 2,098,730   $ 2,008,336     $ 178,102    $ (2,026,965)   $ 2,258,203
                                               ============== ============= ============= ==============================

CURRENT LIABILITIES:
  Accounts payable                                  $ 11,273      $ 15,197       $ 4,385             $ -       $ 30,855
  Current maturities of other long-term debt          30,395             -           400            (359)        30,436
  Current portion of TV program rights payable             -        21,074             -               -         21,074
  Accrued salaries and commissions                       935         9,449           472               -         10,856
  Accrued interest                                    12,302             -             -               -         12,302
  Deferred revenue                                         -        16,050             -               -         16,050
  Other                                                2,399         4,504           379               -          7,282
                                               -------------- ------------- ------------- ------------------------------
    Total current liabilities                         57,304        66,274         5,636            (359)       128,855

Long-term debt, net of current maturities          1,064,414             -             -               -      1,064,414
Other long-term debt, net of current maturities           41           122        19,243          (9,746)         9,660
TV program rights payable, net of current portion          -        25,435             -               -         25,435
Other noncurrent liabilities                           9,080         4,160             3               -         13,243
Minority interest                                          -             -        48,705               -         48,705
Deferred income taxes                                 55,187             -             -               -         55,187
                                               -------------- ------------- ------------- ------------------------------
    Total liabilities                              1,186,026        95,991        73,587         (10,105)     1,345,499

SHAREHOLDER'S EQUITY:
  Common stock                                     1,027,221             -             -               -      1,027,221
  Additional paid-in capital                         110,061             -         4,393          (4,393)       110,061
  Subsidiary investment                                    -     1,537,552       135,848      (1,673,400)             -
  Retained earnings/(accumulated deficit)           (210,718)      374,793       (21,525)       (353,268)      (210,718)
  Accumulated other comprehensive loss               (13,860)            -       (14,201)         14,201        (13,860)
                                               -------------- ------------- ------------- ------------------------------
    Total shareholder's equity                       912,704     1,912,345       104,515      (2,016,860)       912,704
                                               -------------- ------------- ------------- ------------------------------
                                               -------------- ------------- ------------- ------------------------------
    Total liabilities and shareholder's equity   $ 2,098,730   $ 2,008,336     $ 178,102    $ (2,026,965)   $ 2,258,203
                                               ============== ============= ============= ==============================`

---

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

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

CURRENT ASSETS:
  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
  Other                                                  222        23,249         2,190               -         25,661
                                               -------------- ------------- ------------- ------------------------------
    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
                                               -------------- ------------- ------------- ------------------------------
    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
Minority interest                                          -             -           721               -            721
Other noncurrent liabilities                          13,167         3,898             -               -         17,065
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
                                               ============== ============= ============= ==============================`

---

Emmis Operating Company Condensed Consolidating
Statement of Operations For the Three Months
Ended August 31, 2003 (Unaudited)

`Only       Guarantors   Guarantors      Entries     Consolidated
                                                 ------------- ----------------------------------------- --------------

Net revenues                                            $ 231     $ 146,478       $ 9,000           $ -      $ 155,709
Operating expenses:
     Station operating expenses,
         excluding noncash compensation                   173        89,755         5,694             -         95,622
     Corporate expenses, excluding
          noncash compensation                          5,861             -             -             -          5,861
     Noncash compensation                               1,117         4,291             -             -          5,408
     Depreciation and amortization                      1,504         9,099         1,004             -         11,607
                                                 ------------- ----------------------------------------- --------------
          Total operating expenses                      8,655       103,145         6,698             -        118,498
                                                 ------------- ----------------------------------------- --------------
Operating income (loss)                                (8,424)       43,333         2,302             -         37,211
                                                 ------------- ----------------------------------------- --------------
Other income (expense)
     Interest expense                                 (14,438)          (39)         (568)          404        (14,641)
     Loss from unconsolidated affiliates                 (175)            -             -             -           (175)
     Gain on sale of assets                                 -           957             -             -            957
     Minority interest expense                              -             -             -          (801)          (801)
     Other income (expense), net                         (973)           63         1,219             -            309
                                                 ------------- ----------------------------------------- --------------
          Total other income (expense)                (15,586)          981           651          (397)       (14,351)
                                                 ------------- ----------------------------------------- --------------

Income (loss) before income taxes and
    accounting change                                 (24,010)       44,314         2,953          (397)        22,860

Provision (benefit) for income taxes                   (8,466)       16,839           518             -          8,891
                                                 ------------- ----------------------------------------- --------------
                                                      (15,544)       27,475         2,435          (397)        13,969
Equity in earnings (loss) of subsidiaries              29,513             -             -       (29,513)             -
                                                 ------------- ----------------------------------------- --------------
                                                 ------------- ----------------------------------------- --------------
Net income (loss)                                    $ 13,969      $ 27,475       $ 2,435     $ (29,910)      $ 13,969
                                                 ============= ========================================= ==============`

---

Emmis Operating CompanyCondensed Consolidating
Statement of Operations For the Three Months
Ended August 31, 2002 (Unaudited)

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

Net revenues                                          $ 225       $ 139,838       $ 3,159            $ -      $ 143,222
Operating expenses:
     Station operating expenses,
         excluding noncash compensation                 183          83,354         2,428              -         85,965
     Corporate expenses, excluding
          noncash compensation                        5,046               -             -              -          5,046
     Noncash compensation                             1,024           4,751             -              -          5,775
     Depreciation and amortization                    1,155           8,735           703              -         10,593
                                              -------------- --------------- ------------- -------------- --------------
          Total operating expenses                    7,408          96,840         3,131              -        107,379
                                              -------------- --------------- ------------- -------------- --------------
Operating income (loss)                              (7,183)         42,998            28              -         35,843
                                              -------------- --------------- ------------- -------------- --------------
Other income (expense)
     Interest expense                               (19,474)           (392)         (128)           176        (19,818)
     Loss from unconsolidated affiliates                  -          (3,014)            -              -         (3,014)
     Loss on debt extinguishment                       (844)              -             -              -           (844)
     Minority interest income (expense)                   -               -             -             37             37
     Other income (expense), net                        288             246           217           (176)           575
                                              -------------- --------------- ------------- -------------- --------------
          Total other income (expense)              (20,030)         (3,160)           89             37        (23,064)
                                              -------------- --------------- ------------- -------------- --------------

Income (loss) before income taxes,
    extraordinary loss and accounting change        (27,213)         39,838           117             37         12,779

Provision (benefit) for income taxes                (10,345)         15,138             -              -          4,793
                                              -------------- --------------- ------------- -------------- --------------

Income (loss) before extraordinary loss
    and accounting change                           (16,868)         24,700           117             37          7,986
Equity in earnings (loss) of subsidiaries            24,854               -             -        (24,854)             -
                                              -------------- --------------- ------------- -------------- --------------
Net income (loss)                                   $ 7,986        $ 24,700         $ 117      $ (24,817)       $ 7,986
                                              ============== =============== ============= ============== ==============`

---

Emmis Operating Company Condensed Consolidating
Statement of Operations For the Six Months
Ended August 31, 2003 (Unaudited)

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

Net revenues                                            $ 469     $ 285,972      $ 11,629           $ -      $ 298,070
Operating expenses:
     Station operating expenses,
         excluding noncash compensation                   344       176,742         8,194             -        185,280
     Corporate expenses, excluding
          noncash compensation                         11,624             -             -             -         11,624
     Noncash compensation                               2,508         9,963             -             -         12,471
     Depreciation and amortization                      3,014        18,429         1,516             -         22,959
                                                 ------------- ----------------------------------------- --------------
          Total operating expenses                     17,490       205,134         9,710             -        232,334
                                                 ------------- ----------------------------------------- --------------
Operating income (loss)                               (17,021)       80,838         1,919             -         65,736
                                                 ------------- ----------------------------------------- --------------
Other income (expense)
     Interest expense                                 (30,445)          (77)       (1,028)          657        (30,893)
     Loss from unconsolidated affiliates                 (339)            -             -             -           (339)
     Gain on sale of assets                                 -           957             -             -            957
     Minority interest expense                              -             -             -          (789)          (789)
     Other income (expense), net                         (905)           20         1,170             -            285
                                                 ------------- ----------------------------------------- --------------
          Total other income (expense)                (31,689)          900           142          (132)       (30,779)
                                                 ------------- ----------------------------------------- --------------

Income (loss) before income taxes and
    accounting change                                 (48,710)       81,738         2,061          (132)        34,957

Provision (benefit) for income taxes                  (17,421)       31,060           518             -         14,157
                                                 ------------- ----------------------------------------- --------------
                                                      (31,289)       50,678         1,543          (132)        20,800
Equity in earnings (loss) of subsidiaries              52,089             -             -       (52,089)             -
                                                 ------------- ----------------------------------------- --------------
                                                 ------------- ----------------------------------------- --------------
Net income (loss)                                    $ 20,800      $ 50,678       $ 1,543     $ (52,221)      $ 20,800
                                                 ============= ========================================= ==============`

---

Emmis Operating Company Condensed Consolidating
Statement of Operations For the Six Months
Ended August 31, 2002 (Unaudited)

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

Net revenues                                  $ 456   $ 274,223     $ 5,349         $ -   $ 280,028
Operating expenses:
     Station operating expenses,
         excluding noncash compensation         372     166,995       4,928           -     172,295
     Corporate expenses, excluding
          noncash compensation               10,179           -           -           -      10,179
     Noncash compensation                     1,636       9,494           -           -      11,130
     Depreciation and amortization            2,301      17,630       1,421           -      21,352
                                         ----------- ----------- ----------------------- -----------
          Total operating expenses           14,488     194,119       6,349           -     214,956
                                         ----------- ----------- ----------------------- -----------
Operating income (loss)                     (14,032)     80,104      (1,000)          -      65,072
                                         ----------- ----------- ----------------------- -----------
Other income (expense)
     Interest expense                       (41,383)       (453)       (773)        351     (42,258)
     Loss from unconsolidated affiliates          -      (4,080)          -           -      (4,080)
     Loss on debt extinguishment             (4,444)          -           -           -      (4,444)
     Gain on sale of assets                       -       8,933           -           -       8,933
     Minority interest income (expense)           -           -           -          96          96
     Other income (expense), net                639         379         496        (351)      1,163
                                         ----------- ----------- ----------------------- -----------
          Total other income (expense)      (45,188)      4,779        (277)         96     (40,590)
                                         ----------- ----------- ----------------------- -----------

Income (loss) before income taxes,
    extraordinary loss and accounting change(59,220)     84,883      (1,277)         96      24,482

Provision (benefit) for income taxes        (22,651)     32,256           -           -       9,605
                                         ----------- ----------- ----------------------- -----------

Income (loss) before extraordinary loss
    and accounting change                   (36,569)     52,627      (1,277)         96      14,877
Cumulative effect of accounting change,
    net of tax                             (167,400)   (167,400)          -     167,400    (167,400)
Equity in earnings (loss) of subsidiaries    51,446           -           -     (51,446)          -
                                         ----------- ----------- ----------------------- -----------
                                         ----------- ----------- ----------------------- -----------
Net income (loss)                        $ (152,523) $ (114,773)   $ (1,277)  $ 116,050  $ (152,523)
                                         =========== =========== ======================= ===========`

---

Emmis Operating Company Condensed Consolidating
Statement of Cash Flows For the Six Months
Ended August 31, 2003 Unaudited)

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

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                  $ 20,800       $ 50,678       $ 1,543      $ (52,221)      $ 20,800
  Adjustments to reconcile net income (loss) to net
     cash provided (used) by operating activities -
      Depreciation and amortization                     4,846         30,036         1,516              -         36,398
      Provision for bad debts                               -          1,708             -              -          1,708
      Provision for deferred income taxes             (17,421)        31,060           518              -         14,157
      Noncash compensation                              2,508          9,963             -              -         12,471
      Gain on sale of assets                                -           (957)            -              -           (957)
      Equity in earnings of subsidiaries              (52,089)             -             -         52,089              -
      Other                                                 -              -          (201)           132            (69)
  Changes in assets and liabilities -
      Accounts receivable                                   -        (13,568)         (803)             -        (14,371)
      Prepaid expenses and other current assets          (241)         4,840          (230)             -          4,369
      Other assets                                     11,412        (18,085)          (40)             -         (6,713)
      Accounts payable and accrued liabilities         (1,668)        (4,607)       (2,359)             -         (8,634)
      Deferred liabilities                                  -            245           (46)             -            199
      Other liabilities                                  (711)       (16,931)       (1,900)             -        (19,542)
                                                -------------- -------------- ------------- -------------- --------------
      Net cash provided (used) by operating activities(32,564)        74,382        (2,002)             -         39,816
                                                -------------- -------------- ------------- -------------- --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                    (758)        (7,798)         (206)             -         (8,762)
  Cash paid for acquisitions                                -        (11,656)     (106,441)             -       (118,097)
  Proceeds from sale of assets, net                         -          3,650             -              -          3,650
  Deposits and other                                   (1,399)             -             -              -         (1,399)
                                                -------------- -------------- ------------- -------------- --------------
  Net cash used by investing activities                (2,157)       (15,804)     (106,647)             -       (124,608)
                                                -------------- -------------- ------------- -------------- --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on long-term debt                          (40,112)             -             -              -        (40,112)
  Proceeds from long-term debt                        128,000              -             -              -        128,000
  Intercompany and ECC                                (54,985)       (56,780)      107,332              -         (4,433)
  Debt related costs                                     (646)             -             -              -           (646)
                                                -------------- -------------- ------------- -------------- --------------
                                                -------------- -------------- ------------- -------------- --------------
  Net cash provided (used) by financing activities     32,257        (56,780)      107,332              -         82,809
                                                -------------- -------------- ------------- -------------- --------------


DECREASE IN CASH AND CASH EQUIVALENTS                  (2,464)         1,798        (1,317)             -         (1,983)

CASH AND CASH EQUIVALENTS:
  Beginning of period                                   3,885          5,844         6,350              -         16,079
                                                -------------- -------------- ------------- -------------- --------------

  End of period                                       $ 1,421        $ 7,642       $ 5,033            $ -       $ 14,096
                                                ============== ============== ============= ============== ==============`

---

Emmis Operating Company Condensed Consolidating
Statement of Cash Flows >For the Six Months
Ended August 31, 2002 (Unaudited)

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

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                $ (152,523)    $ (114,773)     $ (1,277)     $ 116,050     $ (152,523)
  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
      Depreciation and amortization                     3,881         27,278         1,421              -         32,580
      Provision for bad debts                               -          2,179             -              -          2,179
      Provision (benefit) for deferred income taxes     9,605              -             -              -          9,605
      Noncash compensation                              1,636          9,494             -              -         11,130
      Loss on debt extinguishment                       4,444              -             -              -          4,444
      Gain on sale of assets                                -         (8,933)            -              -         (8,933)
      Equity in earnings of subsidiaries              (51,446)             -             -         51,446              -
      Other                                                96            111        (8,517)           (96)        (8,406)
  Changes in assets and liabilities -
      Accounts receivable                                   -        (15,221)          744              -        (14,477)
      Prepaid expenses and other current assets           (91)         4,155            70              -          4,134
      Other assets                                      6,350         (6,139)          275              -            486
      Accounts payable and accrued liabilities          2,935             93         1,154              -          4,182
      Deferred liabilities                                  -           (422)            -              -           (422)
      Other liabilities                                (3,100)        (9,188)       (4,487)             -        (16,775)
                                                -------------- -------------- ------------- -------------- --------------
      Net cash provided (used) by investing activities(10,813)        56,034       (10,617)             -         34,604
                                                -------------- -------------- ------------- -------------- --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                  (1,820)       (11,227)          861              -        (12,186)
  Proceeds from sale of assets                              -        135,500             -              -        135,500
  Other                                                (1,025)             -             -              -         (1,025)
                                                -------------- -------------- ------------- -------------- --------------
  Net cash provided (used) by investing activities     (2,845)       124,273           861              -        122,289
                                                -------------- -------------- ------------- -------------- --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Payments on long-term debt                         (216,102)             -             -              -       (216,102)
  Proceeds from long-term debt                          6,000              -             -              -          6,000
  Intercompany                                        230,532       (178,613)        9,337              -         61,256
  Debt related costs                                   (2,754)             -             -              -         (2,754)
                                                -------------- -------------- ------------- -------------- --------------
  Net cash provided (used) by investing activities     17,676       (178,613)        9,337              -       (151,600)
                                                -------------- -------------- ------------- -------------- --------------

INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                           4,018          1,694          (419)             -          5,293

CASH AND CASH EQUIVALENTS:
  Beginning of period                                       -          4,970         1,392              -          6,362
                                                -------------- -------------- ------------- -------------- --------------

  End of period                                       $ 4,018        $ 6,664         $ 973            $ -       $ 11,655
                                                ============== ============== ============= ============== ==============`

---

Note 8. Regulatory,
International and Other Matters

We
acquired KGMB-TV in Honolulu, Hawaii as part of the Lee acquisition in October 2000.
Because we also own KHON-TV in Honolulu and both stations are rated among the top four
television stations in the Honolulu market, we have been operating KGMB-TV under various
temporary waivers to the FCCs ownership rules. While the FCC has adopted new local
television ownership rules which continue to prohibit the ownership of two top-rated
television stations in a single market, the implementation of the new rules has been
challenged in Federal court and the court has issued an indefinite stay. The stay has
prevented the new rules from becoming effective. In addition, Emmis has filed its own
petition in the same Federal court challenging the legality of the Commissions rule
that prohibits one company from owning two stations that are rated in the top four in a
single market. We cannot predict when or how the court will rule on our petition, or when
or how the FCC will rule on our most recent waiver request. In the mean time, we continue
to operate both of our stations in Honolulu.

FCC
regulations require most commercial television stations in the United States to be
currently broadcasting in digital format. Thirteen of our sixteen television stations
(excluding satellite stations) are currently broadcasting in digital format.
Two stations have received an extension that expires in December 2003. The other station,
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. In addition, four of our nine satellite stations
are not currently broadcasting in digital format. The extensions for these four satellite
stations expired in August 2003. However, we currently have extension requests pending
with the FCC and we believe that the continued grant of extensions is appropriate because
the delays are largely due to conditions beyond our control. However, no assurances can be
given that further extensions will be granted. Based upon the FCCs treatment of
certain broadcasters who were not granted extensions to the original August 2002 deadline,
we believe that the FCC will issue a formal admonishment to any broadcaster whose
extension request is denied and may issue a monetary fine if the station has not commenced
digital broadcasting within six months of the date of the FCCs admonishment. We
cannot predict the extent, if any, of the monetary fine, nor can we predict the other
actions the FCC will take if the station does not commence digital broadcasts within six
months after the date of the fine.

During
the quarter ended August 31, 2003, Emmis acquired the rights to program and sell
advertising on radio stations in five cities in the Flanders region of Belgium for
approximately $1 million. Future consideration for these rights is approximately $2
million, payable over six years, and is contingent on the Flemish government renewing the
station licenses. Based upon the applicable Flemish laws and regulations, the Company
believes that the licenses are likely to be renewed.

During
the quarter ended August 31, 2003, the partners in our Hungarian subsidiary, including
Emmis, agreed to forgive certain indebtedness and accrued interest owed to the partners by
the subsidiary. The activity relating to Emmis eliminates in consolidation. The
forgiveness of debt by our minority partners was accounted for as a capital transaction.
Since the accrued interest was charged to expense by the Hungarian subsidiary, reversal of
the portion of accrued interest attributable to the minority partners of $1.3 million was
credited to income and is reflected in other income (expense), net in the accompanying
condensed consolidated statements of operations.

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 that are likely to have a material adverse effect
on the Company.

---

Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations

Note: Certain statements included in
this report or in the financial statements contained herein which are not statements of
historical fact, including but not limited to those identified with the words
expect, will or look are intended to be, and are, by
this Note, identified as forward-looking statements, as defined in the
Securities and Exchange Act of 1934, as amended, and involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance or
achievements of the Company to be materially different from any future result, performance
or achievement expressed or implied by such forward-looking statement. Such factors
include, among others, general economic and business conditions; fluctuations in the
demand for advertising and demand for different types of advertising media; our ability to
service our outstanding debt; increased competition in our markets and the broadcasting
industry; our ability to attract and secure programming, on-air talent, writers and
photographers; inability to obtain necessary approvals for purchase or sale transactions
or to complete the transactions; changes in the costs of programming, including on-air
talent; inability to grow through suitable acquisitions, including desired radio
acquisitions; new or changing regulations of the Federal Communications Commission or
other governmental agencies; competition from new or different technologies; war,
terrorist acts or political instability; and other factors mentioned in other documents
filed by the Company with the Securities and Exchange Commission. Emmis does not undertake
any obligation to publicly update or revise any forward-looking statements because of new
information, future events or otherwise.

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). Unless otherwise
noted, all disclosures contained in the Managements Discussion and Analysis of
Financial Condition and Results of Operation in the Form 10-Q 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 lead to 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 might be required.

Results of Operations for the Three
and Six Months Ended August 31, 2003 Compared to August 31, 2002

Pro forma reconciliation:

Since
March 1, 2002, we have sold two radio stations in Denver,Colorado, acquired a 50.1%
controlling interest in six radio stations in Austin, Texas, purchased one television
station in Mobile, Alabama and sold a television production company. The following table
reconciles actual results to pro forma results.

`Three Months ended      Six Months endedd
                                                        August 31,              August 31,
                                              2002        2003          2002         2003
                                            ---------   ---------     ---------    ---------

Total net revenues:
Reported total net revenues                 $143,222    $155,709      $280,028     $298,070

Plus:  net revenues from assets acquired       6,259       2,456        12,820        8,860

Less:  net revenues from assets disposed      (1,045)         (6)       (3,091)      (1,140)
                                            ---------   ---------     ---------    ---------

Pro forma total net revenues                $148,436    $158,159      $289,757     $305,790
                                            =========   =========     =========    =========

Total station operating expenses, excluding
  noncash compensation:
Reported total station operating expenses,
  excluding noncash compensation             $85,965     $95,622      $172,295     $185,280

Plus:  station operating expenses, excluding
  noncash compensation from assets acquired    3,995       1,284         7,999        5,182

Less:  station operating expenses, excluding
  noncash compensation from assets disposed     (648)        (47)       (1,901)        (944)
                                            ---------   ---------     ---------    ---------

Pro forma total station operating expenses,
  excluding noncash compensation             $89,312     $96,859      $178,393     $189,518
                                            =========   =========     =========    =========`

Net revenues:

Radio
net revenues for the three and six months ended August 31, 2003 increased $11.3 million,
or 16.1% and $13.1 million, or 9.9%, respectively. On a pro forma basis (assuming the
Austin radio stations had been purchased on March 1, 2002 and the Denver radio stations
had been sold on March 1, 2002), radio net revenues for the three and six months ended
August 31, 2003 would have increased $7.7 million, or 10.1% and $10.8 million, or 7.5%,
respectively. We monitor the performance of our stations against the aggregate performance
of the markets in which we operate. On a pro forma basis, for the three and six months
ended August 31, 2003, net revenues of our domestic radio stations were up 8.6% and 6.5%,
respectively, whereas net revenues of our domestic radio markets were up only 4.0% and
3.1%, respectively, based on Miller-Kaplan reports for the periods. We were able to
outperform the markets in which we operate due to our commitment to training and
developing local sales forces and higher ratings, resulting, in part, from increased
promotional spending in prior quarters. The higher ratings allowed us to charge higher
rates for the advertisements we sold in the current period versus the same period in the
prior year. Our advertising inventory sellout decreased slightly year over year. Net
revenues for the quarter ended August 31, 2003 were positively impacted by a promotional
concert held in New York during the quarter.

Television
net revenues for the three and six months ended August 31, 2003 increased $0.6 million, or
1.1% and $3.8 million, or 3.3%, respectively. On a pro forma basis (assuming the purchase
of WBPG-TV and sale of Mira Mobile Television had occurred on March 1, 2002), television
net revenues for the three and six months ended August 31, 2003 would have increased $1.5
million, or 2.7% and $4.1 million, or 3.7%, respectively. Net political advertising
revenues for the three and six months ended August 31, 2002 were approximately $2.0
million and $4.3 million, respectively. Net political advertising revenues for the three
and six months ended August 31, 2003 were approximately $0.4 million and $1.4 million,
respectively. On a pro forma basis and excluding net political advertising revenues,
television net revenues would have increased $3.1 million, or 5.9% and $7.0 million, or
6.5% for the three and six months ended August 31, 2003. This increase is due to our
television stations selling a higher percentage of their inventory and charging higher
rates as a result of ratings improvements. Also, our commitment to training and developing
local sales forces has enabled us to increase our share of local advertising revenues.

Publishing
revenues for the three and six months ended August 31, 2003 increased $0.6 million, or
3.3% and $1.1 million, or 3.3%, respectively. The national advertising environment is
especially difficult for our publishing division. Our magazines have been able to overcome
shortfalls in national advertising revenues by producing more custom publications and from
an increase in special advertiser sections in our magazines.

On
a consolidated basis, total net revenues for the three and six months ended August 31,
2003 increased $12.5 million, or 8.7%, and $18.0 million, or 6.4%, respectively due to the
effect of the items described above.

Station operating expenses, excluding
noncash compensation:

Radio
station operating expenses, excluding noncash compensation, for the three and six months
ended August 31, 2003 increased $8.4 million, or 24.0% and $9.2 million, or 13.2%,
respectively. On a pro forma basis (assuming the Austin radio stations had been purchased
on March 1, 2002 and the Denver radio stations had been sold on March 1, 2002), radio
station operating expenses, excluding noncash compensation, for the three and six months
ended August 31, 2003 would have increased $6.3 million, or 16.4% and $8.3 million, or
11.0%, respectively. The increase relates to higher sales-related costs, higher insurance
and health-related costs, and expenses associated with a promotional concert held in New
York during the quarter.

Television
station operating expenses, excluding noncash compensation, for the three and six months
ended August 31, 2003 increased $0.5 million, or 1.5% and $2.0 million, or 2.7%,
respectively. On a pro forma basis (assuming the purchase of WBPG-TV and sale of Mira
Mobile Television had occurred on March 1, 2002), television station operating expenses,
excluding noncash compensation, for the three and six months ended August 31, 2003 would
have increased $0.5 million, or 1.5% and $1.0 million, or 1.4%, respectively. This
increase is principally due to higher programming costs and higher insurance and
health-related costs.

Publishing
operating expenses, excluding noncash compensation, for the three and six months ended
August 31, 2003 increased $0.7 million, or 4.7%, and $1.8 million, or 6.0%, respectively.
As previously discussed, our publishing division has replaced lost national advertising
revenues with revenues from custom publications and special advertiser sections, which are
more expensive to produce due principally to higher editorial and production costs. Our
publishing division also experienced higher insurance and health-related costs.

On
a consolidated basis, total station operating expenses, excluding noncash compensation,
for the three and six months ended August 31, 2003 increased $9.7 million, or 11.2% and
$13.0 million, or 7.5%, respectively, due to the effect of the items described above.

Noncash compensation
expenses:

Noncash
compensation expenses for the three and six months ended August 31, 2003 were $5.4 million
and $12.5 million, respectively, compared to $5.8 million and $11.1 million for the same
period of the prior year, a decrease of $0.4 million or 6.4%, and an increase of $1.4
million or 12.0%, respectively. The following table summarizes the noncash compensation
expense by segment:

[GRAPHIC OMITTED][GRAPHIC
OMITTED]

Noncash
compensation includes compensation expense associated with restricted common stock issued
under employment agreements, common stock issued to employees at our discretion, Company
matches in our 401(k) plans, and common stock issued to employees pursuant to our stock
compensation program. Our stock compensation program resulted in noncash compensation
expense of approximately $3.8 million for the three months ended August 31, 2002 and 2003,
and $8.2 million and $8.3 million for the six months ended August 31, 2002 and 2003,
respectively. Effective March 1, 2003, Emmis elected to double its 401(k) match to $2
thousand per employee, with one-half of the contribution made in Emmis stock. The
increased 401(k) match was made instead of making a contribution to the Companys
profit sharing plan. This resulted in approximately $0.3 million and $1.3 million of
additional noncash compensation expense in the three and six months ended August 31, 2003,
respectively, over the same periods in the prior year. The remaining decrease in the three
months ended August 31, 2003 is primarily attributable to lower accruals for bonuses to be
paid in stock.

Corporate expenses, excluding noncash
compensation:

Corporate
expenses, excluding noncash compensation, for the three and six months ended August 31,
2003 were $5.9 million and $11.6 million, respectively, compared to $5.0 million and $10.2
million for the same periods of the prior year, an increase of $0.9 million or 16.2% and
$1.4 million or 14.2%. These costs increased due to higher insurance and health care
costs, professional fees associated with evaluating new business opportunities, merit
increases, funding for training and diversity initiatives, and higher corporate governance
costs.

Depreciation and
amortization:

Radio
depreciation and amortization expense for the three months ended August 31, 2003 was $2.4
million compared to $1.9 million for the same period of the prior year, an increase of
$0.5 million or 25.1%. Radio depreciation and amortization expense for the six months
ended August 31, 2003 was $4.4 million compared to $4.0 million for the same period of the
prior year, an increase of $0.4 million or 9.1%. Substantially all of the increase in
radio depreciation and amortization is attributable to our Austin radio acquisition, which
closed on July 1, 2003.

Television
depreciation and amortization expense for the three months ended August 31, 2003 was $7.5
million compared to $7.0 million for the same period of the prior year, an increase of
$0.5 million or 5.9%. Television depreciation and amortization expense for the six months
ended August 31, 2003 was $15.1 million compared to $14.0 million for the same period of
the prior year, an increase of $1.1 million or 8.2%. The increase was mainly attributable
to depreciation of digital equipment purchased to replace existing analog equipment.

Publishing
depreciation and amortization expense for the three months ended August 31, 2003 was $0.2
million compared to $0.5 million for the same period of the prior year, a decrease of $0.3
million or 51.9%. Publishing depreciation and amortization expense for the six months
ended August 31, 2003 was $0.4 million compared to $1.0 million for the same period of the
prior year, a decrease of $0.6 million or 58.2%. The decrease was mainly attributable to
certain definite-lived intangible assets becoming fully amortized during fiscal 2003.

Corporate
depreciation and amortization expense for the three months ended August 31, 2003 was $1.5
million compared to $1.2 million for the same period of the prior year, an increase of
$0.3 million or 30.2%. Corporate depreciation and amortization expense for the six months
ended August 31, 2003 was $3.0 million compared to $2.3 million for the same period of the
prior year, an increase of $0.7 million or 31.0%. The increase was mainly attributable to
higher depreciation expense related to computer equipment and software purchases over the
past twelve months.

On
a consolidated basis, total depreciation and amortization expense for the three months
ended August 31, 2003 was $11.6 million compared to $10.6 million for the same period of
the prior year, an increase of $1.0 million or 9.6%, due to the effect of the items
described above. On a consolidated basis, total depreciation and amortization expense for
the six months ended August 31, 2003 was $23.0 million compared to $21.4 million for the
same period of the prior year, an increase of $1.6 million or 7.5%, due to the effect of
the items described above.

Operating income:

Radio
operating income for the three months ended August 31, 2003 was $33.3 million compared to
$30.1 million for the same period of the prior year, an increase of $3.2 million or 10.5%.
Radio operating income for the six months ended August 31, 2003 was $58.3 million compared
to $53.9 million for the same period of the prior year, an increase of $4.4 million or
8.1%. This increase is attributable to higher net revenues, partially offset by higher
station operating expenses and depreciation and amortization expense, as discussed above.

Television
operating income for the three months ended August 31, 2003 was $11.1 million compared to
$11.6 million for the same period of the prior year, a decrease of $0.5 million or 4.5%.
Television operating income for the six months ended August 31, 2003 was $23.1 million
compared to $23.3 million for the same period of the prior year, a decrease of $0.2
million or 1.1%. This decrease was driven by higher noncash compensation and higher
depreciation and amortization expense, as discussed above.

Publishing
operating income for the three months ended August 31, 2003 was $1.3 million compared to
$1.3 million for the same period of the prior year. Publishing operating income for the
six months ended August 31, 2003 was $1.5 million compared to $1.9 million for the same
period of the prior year, a decrease of $0.4 million, or 22.2%. The decrease was primarily
attributable to the shift in revenue mix, as discussed above.

On
a consolidated basis, total operating income for the three months ended August 31, 2003
was $37.2 million compared to $35.8 million for the same period of the prior year, an
increase of $1.4 million or 3.8%. On a consolidated basis, total operating income for the
six months ended August 31, 2003 was $65.7 million compared to $65.1 million for the same
period of the prior year, an increase of $0.6 million or 1.0%. This increase principally
related to the changes in radio, television and publishing operating income and higher
corporate expenses and higher noncash compensation expense, as discussed above.

Interest expense:

With
respect to Emmis, interest expense for the three months ended August 31, 2003 was $21.2
million compared to $26.2 million for the same period of the prior year, a decrease of
$5.0 million or 19.2%. Interest expense for the six months ended August 31, 2003 was $43.9
million compared to $56.1 million for the same period of the prior year, a decrease of
$12.2 million or 21.7%. 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 reflect 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. A
portion of the decrease in interest expense is attributable to the expiration of interest
rate swap agreements originally entered into in fiscal 2001. These swaps, which began
expiring in February 2003, had an original aggregate notional amount of $350.0 million and
fixed LIBOR at a weighted-average 4.76%. As of August 31, 2003, we had one remaining
outstanding swap contract totaling $40 million, which fixed LIBOR at a weighted-average
5.13%. This remaining contract expires in February 2004. 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 three months ended August 31, 2003 was
$14.6 million compared to $19.8 million for the same period of the prior year, a decrease
of $5.2 million or 26.1%. Interest expense for EOC for the six months ended August 31,
2003 was $30.9 million compared to $42.3 million for the same period of the prior year, a
decrease of $11.4 million or 26.9%. 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 before income taxes and
accounting change:

With
respect to Emmis, income before income taxes and accounting change for the three months
ended August 31, 2003 was $16.3 million compared to a loss of $2.7 million for the same
period in the prior year. Income before income taxes and accounting change for the six
months ended August 31, 2003 was $21.9 million compared to $1.5 million for the same
period in the prior year. The increase is mainly attributable to better operating results
at our stations and a reduction in interest expense as a result of the factors described
above, partially offset by the gain on sale of our Denver radio assets of $8.9 million,
loss on debt extinguishment of $13.5 million and loss from unconsolidated affiliates of
$4.1 million, all included in the prior year. With respect to EOC, income before income
taxes and accounting change for the three months ended August 31, 2003 was $22.9 million
compared to $12.8 million for the same period in the prior year, an increase of $10.1
million, or 78.9%. Income before income taxes and accounting change for the six months
ended August 31, 2003 was $35.0 million compared to $24.5 million for the same period in
the prior year, an increase of $10.5 million, or 42.8%. The increase is mainly
attributable to better operating results at our stations and a reduction in interest
expense as a result of the factors described above, partially offset by the gain on sale
of our Denver radio assets of $8.9 million, loss on debt extinguishment of $4.4 million
and loss from unconsolidated affiliates of $4.1 million, all included in the prior year.

Net income (loss):

With
respect to Emmis, net income was $7.5 million and $7.9 million for the three and six
months ended August 31, 2003, respectively, compared to a net loss of $6.8 million and
$174.6 million for the respective periods in the prior year. The increase in net income is
mainly attributable to (1) the inclusion in the prior year of 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, and (2) better operating
results at our stations and a reduction in interest expense as a result of the factors
described above, partially offset by the gain on sale of our Denver radio assets of $8.9
million, loss on debt extinguishment of $4.4 million and loss from unconsolidated
affiliates of $4.1 million, all included in the prior year, all net of tax. With respect
to EOC, net income was $14.0 million and $20.8 million for the three and six months ended
August 31, 2003, respectively, compared to $8.0 million and a net loss of $152.5 million
for the respective periods in the prior year. The increase in net income is mainly
attributable to (1) the inclusion in the prior year of 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, and (2) better operating
results at our stations and a reduction in interest expense as a result of the factors
described above, partially offset by the gain on sale of our Denver radio assets of $8.9
million, loss on debt extinguishment of $4.4 million and loss from unconsolidated
affiliates of $4.1 million, all included in the prior year, all net of tax.

Liquidity and Capital
Resources

Our
primary sources of liquidity are cash provided by operations and cash available through
revolver 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 a discussion of specific segment needs.

At
August 31, 2003, we had cash and cash equivalents of $14.1 million and net working capital
for Emmis and EOC of $39.3 million and $40.4 million, respectively. 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. The increase in net working capital
primarily relates to higher receivables due to the seasonality of the business, and lower
accrued salaries and commissions since year-end bonuses that were accrued as of February
28, 2003 were paid shortly after year-end.

Operating
Activities

With respect
to Emmis, net cash flows provided by operating activities were $39.8 million for the six
months ended August 31, 2003 compared to $35.5 million for the same period of the prior.
With respect to EOC, net cash flows provided by operating activities were $39.8 million
for the six months ended August 31, 2003 compared to net cash flows used in operating
activities of $34.6 million for the same period of the prior year. The increase in cash
flows provided by operating activities for the six months ended August 31, 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 offset by the payment of
fiscal 2003 year-end bonuses. 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
used in investing activities for both Emmis and EOC were $124.6 million for the six months
ended August 31, 2003 compared to cash provided by investing activities of $122.3 million
in the same period of the prior year. This decrease is primarily attributable to our
purchase of a controlling interest in six radio stations in Austin as well as a television
station in Mobile in the six months ended August 31, 2003 as opposed to our sale of two
radio stations in Denver in the six months ended August 31, 2002, partially offset by a
reduction in capital expenditures in the six months ended August 31, 2003 over the same
period in the prior year. Investment activities include capital expenditures and business
acquisitions and dispositions.

As
discussed in Note 3 to the accompanying condensed consolidated financial statements,
effective March 1, 2003, Emmis acquired substantially all of the assets of television
station WBPG-TV in Mobile, AL  Pensacola, FL from Pegasus Communications Corporation
for a cash purchase price of approximately $11.7 million, including transaction costs of
$0.2 million. The acquisition was financed through borrowings under the credit facility
and was accounted for as a purchase.

As
discussed in Note 3 to the accompanying condensed consolidated financial statements, on
July 1, 2003, Emmis effectively acquired, for a purchase price of $106.4 million, a
controlling interest of 50.1% in a partnership that owns six radio stations in the Austin,
Texas metropolitan area. These six stations are KLBJ-AM, KLBJ-FM, KDHT-FM (formerly
KXMG-FM), KROX-FM, KGSR-FM and KEYI-FM. The acquisition was financed through borrowings
under our credit facility and was accounted for as a purchase. In addition, Emmis has the
option, but not the obligation, to purchase our 49.9% partners entire interest in
the partnership after a period of approximately five years based on an 18-multiple of
trailing 12-month cash flow.

During
the quarter ended August 31, 2003, Emmis acquired the rights to program and sell
advertising on radio stations in five cities in the Flanders region of Belgium for
approximately $1 million. Future consideration for these rights is approximately $2
million, payable over six years, and is contingent on the Flemish government renewing the
station licenses. Based upon applicable Flemish laws and regulations, we believe the
licenses are likely to be renewed.

Capital
expenditures primarily relate to leasehold improvements to various office and studio
facilities, broadcast equipment purchases, tower upgrades and computer equipment
replacements. In the six month periods ended August 31, 2003 and 2002, we had capital
expenditures of $8.8 million and $12.2 million, respectively. We anticipate that future
requirements for capital expenditures will include capital expenditures incurred during
the ordinary course of business, including approximately $6 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 four of our satellite stations. We expect to
fund such capital expenditures with cash generated from operating activities and
borrowings under our credit facility.

Financing
Activities

Cash flows
provided by financing activities for both Emmis and EOC were $82.8 million for the six
months ended August 31, 2003. Cash flows used in financing activities for Emmis and EOC
were $152.5 million and $151.6 million, respectively, for the same period of the prior
year.

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. 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 six months ended
August 31, 2002.

As
of August 31, 2003, EOC had $1,064.4 million of long-term corporate indebtedness
outstanding under its credit facility ($764.4 million) and senior subordinated notes
($300.0 million), and an additional $9.7 million of other indebtedness. As of August 31,
2003, total indebtedness outstanding for Emmis included all of EOCs indebtedness as
well as $210.4 million of senior discount notes. Emmis also had $143.8 million of
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 August 31, 2003, our weighted average borrowing rate under
our credit facility was approximately 3.6% and our overall weighted average borrowing
rate, after taking into account amounts outstanding under our senior subordinated notes
and senior discount notes, was approximately 6.1%. The overall weighted average borrowing
rate for EOC, which would exclude the senior discount notes, was approximately 4.8%.

The
debt service requirements of EOC over the next twelve month period (net of interest under
our credit facility) are expected to be $54.8 million. This amount is comprised of $24.4
million for interest under our senior subordinated notes and $30.4 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.

At
October 1, 2003, we had $130.0 million available under our credit facility, less $1.8
million in outstanding letters of credit. As 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 connection with the acquisition of a controlling interest
in six radio stations in Austin effective July 1, 2003, Emmis has the option, but not the
obligation, to purchase our 49.9% partners entire interest in the Austin partnership
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 is not
currently inclined to effectuate the separation absent a significant acquisition of either
radio or television properties.

Intangibles

At
August 31, 2003, approximately 81% 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 our stations compliance with the various
regulatory requirements. Historically, all of our FCC licenses have been renewed at the
end of their respective periods, and we expect that all FCC licenses will continue to be
renewed in the future.

New Accounting
Pronouncements

On
March 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 145,
Rescission of SFAS Nos. 4, 44, and 64, Amendment of SFAS No. 13, and Technical Corrections(SFAS No. 145). 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. This pronouncement requires gains and losses related to debt
transactions to be classified in income from continuing operations. Although we did not
have any gains or losses from debt transactions in the current year, ECC had recorded an
extraordinary loss of $8.8 million, net of tax, and $11.1 million, net of tax, in the
three and six months ended August 31, 2002, respectively, and EOC had recorded an
extraordinary loss of $0.5 million, net of tax, and $2.9 million, net of tax, in the three
and six months ended August 31, 2002, respectively, in connection with debt
extinguishments. Accordingly, we retroactively reclassified the losses of $9.9 million and
$13.5 million, respectively, for ECC and $0.8 million and $4.4 million, respectively, for
EOC to include them in income from continuing operations.

On
March 1, 2003, the Company adopted Financial Accounting Standards Board Interpretation No.
45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others(FIN 45). FIN 45 applies to
contracts or indemnification agreements that contingently require the guarantor to make
payments to the guaranteed party based on changes in an underlying obligation that is
related to an asset, liability, or an equity security of the guaranteed party. FIN
45s disclosure requirements were effective for financial statements of interim or
annual periods ending after December 15, 2002. FIN 45s initial recognition and
initial measurement provisions were applicable on a prospective basis to guarantees issued
or modified after December 31, 2002, irrespective of the guarantors fiscal year-end.
The Company adopted the disclosure requirements of FIN 45 for its fiscal 2003 annual
report. Adoption of the initial recognition and initial measurement requirements of FIN 45
did not materially impact the Companys financial position, results of operations or
applicable disclosures.

On
January 1, 2003, the Financial Accounting Standards Board issued Financial Accounting
Standards Board Interpretation No. 46, Consolidation of Variable Interest Entities(FIN 46). FIN 46 addresses consolidation of business enterprises of variable
interest entities. FIN 46 is effective immediately for all variable interest entities
created after January 31, 2003 and for the first fiscal year or interim period beginning
after June 15, 2003 for variable interest entities in which an enterprise holds a variable
interest that it acquired before February 1, 2003. The Company has not acquired any
variable interest entities subsequent to January 31, 2003 and will therefore adopt FIN 46
for its quarterly report for the period ending November 30, 2003. The Company is currently
evaluating the impact, if any, of this pronouncement on its future consolidated results of
operations and consolidated balance sheets.

In
May 2003, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 150, Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity(SFAS No. 150). SFAS No. 150 requires
financial instruments within its scope to be classified as a liability (or an asset in
some circumstances). Many of these instruments were previously classified as equity. SFAS
150 is effective for our quarter ended November 30, 2003. The Company is currently
evaluating the impact, if any, of this pronouncement on its future consolidated results of
operations and consolidated balance sheets.

Regulatory, International
and Other Matters

We
acquired KGMB-TV in Honolulu, Hawaii as part of the Lee acquisition in October 2000.
Because we also own KHON-TV in Honolulu and both stations are rated among the top four
television stations in the Honolulu market, we have been operating KGMB-TV under various
temporary waivers to the FCCs ownership rules. While the FCC has adopted new local
television ownership rules which continue to prohibit the ownership of two top-rated
television stations in a single market, the implementation of the new rules has been
challenged in Federal court and the court has issued an indefinite stay. The stay has
prevented the new rules from becoming effective. In addition, Emmis has filed its own
petition in the same Federal court challenging the legality of the Commissions rule
that prohibits one company from owning two stations that are rated in the top four in a
single market. We cannot predict when or how the court will rule on our petition, or when
or how the FCC will rule on our most recent waiver request. In the mean time, we continue
to operate both of our stations in Honolulu.

FCC
regulations require most commercial television stations in the United States to be
currently broadcasting in digital format. Thirteen of our sixteen television stations
(excluding satellite stations) are currently broadcasting in digital format.
Two stations have received an extension that expires in December 2003. The other station,
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. In addition, four of our nine satellite stations
are not currently broadcasting in digital format. The extensions for these four satellite
stations expired in August 2003. However, we currently have extension requests pending
with the FCC and we believe that the continued grant of extensions is appropriate because
the delays are largely due to conditions beyond our control. However, no assurances can be
given that further extensions will be granted. Based upon the FCCs treatment of
certain broadcasters who were not granted extensions to the original August 2002 deadline,
we believe that the FCC will issue a formal admonishment to any broadcaster whose
extension request is denied and may issue a monetary fine if the station has not commenced
digital broadcasting within six months of the date of the FCCs admonishment. We
cannot predict the extent, if any, of the monetary fine, nor can we predict the other
actions the FCC will take if the station does not commence digital broadcasts within six
months after the date of the fine.

During
the quarter ended August 31, 2003, the partners in our Hungarian subsidiary, including
Emmis, agreed to forgive certain indebtedness and accrued interest owed to the partners by
the subsidiary. The activity relating to Emmis eliminates in consolidation. The
forgiveness of debt by our minority partners was accounted for as a capital transaction.
Since the accrued interest was charged to expense by the Hungarian subsidiary, reversal of
the portion of accrued interest attributable to the minority partners of $1.3 million was
credited to income and is reflected in other income (expense), net in the accompanying
condensed consolidated statements of operations.

In
October 2003, we exercised our right to purchase the equity interests of our minority
partner in Argentina. The purchase right gives Emmis the right to buy the minority shares
at their fair market value as determined by an independent appraisal. Emmis has commenced
the appraisal process, but is also in discussions with our minority partner to reach a
negotiated purchase. We do not expect the purchase of the equity interest to be material
to our financial statements.

Quantitative and
Qualitative Disclosures About Market Risk

Management
monitors and evaluates changes in market conditions on a regular basis. Based upon the
most recent review, management has determined that there have been no material
developments affecting market risk since the filing of the Companys Annual Report on
Form 10-K for the year ended February 28, 2003.

Item 3. Quantitative and
Qualitative Disclosures About Market Risk

Discussion
regarding these items is included in managements discussion and analysis of
financial condition and results of operations.

Item 4. Controls and
Procedures

Quarterly Evaluation of
the Companies Disclosure Controls

Within
the 90 days prior to the date of this Quarterly Report on Form 10-Q, 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

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 filed as exhibits to this Quarterly Report. 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 Quarterly Report includes the information concerning the
Controls Evaluation required by Rule 13a-15 under the Exchange Act and 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 Quarterly 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.

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 Quarterly 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 4 and 5 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 Quarterly 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.

During
the most recent fiscal quarter, there has been no change in internal control over
financial reporting that has materially affected, or is reasonably likely to materially
affect, the Companys internal control over financial reporting.

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.

PART II  OTHER
INFORMATION

Item 4. Submission of
Matters to a Vote of Security Holders

At
the annual meeting of the shareholders of ECC held on June 25, 2003, the following matters
received the following votes:

`Votes                Votes               Abstentions &
Matter Description                             For                Against            Broker Non-Votes
                                         ----------------      ---------------      --------------------

1.     Election of Directors

            Susan B. Bayh *                  42,944,960        -                    727,435

            Peter A. Lund *                  42,990,063        -                    682,332

            Gary L. Kaseff                   93,199,172        -                    773,243

            Frank V. Sica                    92,386,788        -                    1,585,627

*  Designates Class A Directors elected only by the holders of ECC's Class A Common Stock.


2.     Ratification of auditors              93,122,386        844,759              5,270`

---

Item 6. Exhibits and
Reports on Form 8-K

| | (a)
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 the Companys Form 10-K/A for the 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.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.1 | Employment agreement effective as of March 1, 2003, by and between Emmis Operating
Company and Gary L. Kaseff.
| | ---- | --------------------------------------------------------------------------------------------------------------

| | 10.2 | Change
in Control Severance  Agreement,  dated as of August 11, 2003, by and between Emmis
 Communications                            Corporation and Walter Z. Berger.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.3 | Change
in Control Severance  Agreement,  dated as of August 11, 2003, by and between Emmis
 Communications                            Corporation and Gary L. Kaseff.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.4 | Change
in Control Severance  Agreement,  dated as of August 11, 2003, by and between Emmis
 Communications                            Corporation and Randall D. Bongarten.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.5 | Change
in Control Severance  Agreement,  dated as of August 11, 2003, by and between Emmis
 Communications                            Corporation and Richard F. Cummings.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10.6 | Change in Control Severance Agreement, dated as of August 11, 2003, by and between Emmis
Communications Corporation and Michael Levitan.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------

| | 10.7 | Change in Control Severance Agreement, dated as of August 11, 2003, by and between Emmis
Communications Corporation and Paul Fiddick.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------

| | 10.8 | Change in Control Severance Agreement, dated as of August 11, 2003, by and between Emmis
Communications Corporation and Gary Thoe.
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------

| | 15 | Letter
re: unaudited interim financial information.
| | -- | ---------------------------------------------------

| | 31.1 | Certification
of Principal Executive Officer of Emmis Communications Corporation
                           pursuant to Rule 13a-14(a) under the Exchange Act.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.2 | Certification
of Principal Financial Officer of Emmis Communications Corporation
                           pursuant to Rule 13a-14(a) under the Exchange Act.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.3 | Certification
of Principal Executive Officer of Emmis Operating Company pursuant to
                           Rule 13a-14(a) under the Exchange Act.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | 31.4 | Certification
of Principal Financial Officer of Emmis Operating Company pursuant to
                           Rule 13a-14(a) under the Exchange Act.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.1 | Certification
of Principal Executive Officer 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.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.2 | Certification
of Principal Financial Officer 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.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.3 | Certification
of Principal Executive Officer 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.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 32.4 | Certification
of Principal Financial Officer 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.
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b)                 Reports
on Form 8-K
| | ---------------------------------------

| | On
July1, 2003, the Company included on Form 8-K its press release announcing its financial
results for the three months ended May 31, 2002 and 2003.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------

---

# Signatures

Pursuant
to the requirements 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:  October 15, 2003 |  | By:  /s/ WALTER Z. BERGER
Walter Z. Berger
Executive Vice President (Authorized Corporate
Officer), Chief Financial Officer and Treasurer

---

# Signatures

Pursuant
to the requirements 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: October 15, 2003 |  | By:  /s/ WALTER Z. BERGER
Walter Z. Berger
Executive Vice President (Authorized Corporate
Officer), Chief Financial Officer and Treasurer