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

                                    FORM 10-K

 [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

                  For the fiscal year ended: November 30, 2002
                                       or

 [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

                     For the transition period from       to

                        Commission file Number: 000-21623


                             OBIE MEDIA CORPORATION

                   4211 West 11th Avenue, Eugene, Oregon 97402
                   -------------------------------------------
                    (Address of principal executive offices)

                    Issuer's telephone number: (541) 686-8400

       Securities registered under Section 12(b) of the Exchange Act: None

         Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, without par value

                                (Title of class)

         Indicate by check mark whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 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.

         [ X ] Yes        [  ] No

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

         State issuer's revenues for its most recent fiscal year:  $44,758,996

         State the aggregate market value of the voting stock held by
nonaffiliates computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of a specified date within 60
days prior to the date of filing: $20,089,162 aggregate market value as of
December 31, 2002, based on the price at which the stock was sold.

         Indicate the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 5,908,577 shares of
Common Stock, without par value, on February 15, 2003.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Form 10-K incorporates information from the issuer's definitive
proxy statement for the annual meeting of shareholders to be held on April 25,
2003.

FORM 10-K

This Annual Report includes certain forward-looking statements that involve a
number of risks and uncertainties. Obie's actual results could differ materially
from the forward-looking statements. Factors that could cause or contribute to
such differences include: failure to conclude favorable negotiations on pending
transactions with existing transit agency partners or to successfully assimilate
expanded operations; potential impairments of liquidity or capital resources;
inability to generate sufficient advertising revenues to meet contractual
guarantees; inability to renew existing lending arrangements as they expire;
potential for cancellation or interruption of contracts with governmental
agencies; a further decline in the demand for advertising in the areas where we
conduct our business, or a deterioration of business conditions generally in
those areas; slower than expected acceptance of our innovative display products;
competitive factors, including increased competition and price pressures;
changes in the seasonality of our business; and changes in regulatory or other
external factors; as well as those factors listed from time to time in Obie's
SEC reports, including, but not limited to, the factors discussed in this Annual
Report. You should recognize that these forward-looking statements, which speak
only as of the date of this Annual Report, reflect management's expectations
based on information available as of that date; you should not construe our
forward-looking statements as assurances of future performance. We do not intend
to update our forward-looking statements except as required by law.

Unless otherwise indicated, the information contained in this Annual Report has
been restated to give retroactive effect to 11-for-10 stock splits declared in
October 1997, November 1998 and November 1999. Unless the context otherwise
requires, references in this Annual Report to "Obie Media," the "Company," "we,"
"us" or "our" are to Obie Media Corporation, its subsidiaries, and the
management personnel of those entities. Some information in this Annual Report
has been derived from government and industry sources. Although management
believes this information is reliable, it has not been independently verified.

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

COMPANY OVERVIEW

Obie Media Corporation is an out-of-home advertising company which markets
advertising space primarily on transit vehicles and outdoor advertising displays
such as billboards and wallscapes. As of November 30, 2002, we had 36 exclusive
agreements with transit districts in the United States and Canada to operate
transit advertising displays.

The markets in which these transit districts are located include nine of the 30
largest U.S. markets (as defined by DMA, or demographic market area)--Dallas;
Portland, Oregon; Sacramento; Hartford; Ft. Lauderdale; St. Louis; Tampa;
Indianapolis; and Kansas City--and the third largest Canadian market, Vancouver,
British Columbia. Since our initial public offering in November 1996, the number
of vehicles on which we have the right to operate transit advertising displays
has increased from approximately 1,200 to over 7,000. We also operate and
generally own over 1,200 advertising displays on billboards and walls primarily
in Washington, Oregon, California, Montana, Wyoming and Idaho. Obie was formed
in 1987 as a subsidiary of Obie
<PAGE>
Industries Incorporated ("Obie Industries"), a family-owned outdoor advertising
business. To facilitate its IPO, Obie was separated from Obie Industries in
November 1996.

In September 1998, Obie acquired P & C Media ("P & C"), which had operated in
the out-of-home advertising industry for over 50 years. P & C had 19 agreements
with transit districts, including districts located in Hartford, New Haven, and
Stamford, Connecticut; Fort Lauderdale and West Palm Beach, Florida; Cincinnati
and Cleveland, Ohio; Richmond, Virginia; and Milwaukee, Wisconsin. In August
1999, we completed a public offering of an additional 1,100,000 shares of common
stock. The net proceeds of the offering, approximately $9.7 million, were used
to reduce debt, including the debt incurred in our acquisition of P & C.

INDUSTRY OVERVIEW

We have focused our business in the out-of-home advertising industry, which
includes displays on buses, trains, taxis, subways, transit benches and
shelters, billboards, wallscapes on urban buildings, and displays in shopping
centers, malls, airports, stadiums, movie theaters and supermarkets. The
industry has grown significantly in recent years. According to estimates of the
Outdoor Advertising Association of America (the "OAAA"), between 1993 and 2001,
annual revenues generated by the out-of-home advertising industry increased
76.7% to $5.3 billion from $3.0 billion, representing a compound annual growth
rate of approximately 6.5%. In 2001, billboard-related outdoor expenditures on
products such as 30-sheet posters, 8-sheet posters and bulletins totaled 60% of
that $5.3 billion amount, or approximately $3.2 billion; transit-related outdoor
expenditures on products located on buses and trains, and venues such as
commuter rail stations or airports, totaled 17%, or approximately $901 million;
street furniture-related outdoor expenditures on products such as bus shelters
or in-store displays totaled 17%, or approximately $901 million; and,
alternative outdoor-related expenditures in venues such as sports arenas or
stadiums totaled 6%, or approximately $318 million. As of 1999, the OAAA
estimated that there were approximately 560,000 outdoor advertising displays in
the United States, operated by more than 500 companies.

We believe the out-of-home medium offers several advantages to advertisers. As
compared with television, newspapers, magazines and direct mail marketing,
out-of-home advertising offers repetitive consumer impacts at a comparatively
low cost-per-thousand impressions relative to other media alternatives (cost-per
thousands impressions is a commonly used advertising measurement). Because of
its cost-effective nature, we market out-of-home advertising as a good vehicle
to build mass-market support. Out-of-home advertising can also be used to target
a defined audience in a specific location. This allows local businesses to
target a particular geographic area and/or demographic group. Additionally,
increases in automobile travel times due to highway congestion and continued
migration of businesses and residences from cities to outlying suburbs has
increased consumer exposure to out-of-home advertising.

Transit advertising represents a significant portion of the out-of-home
advertising industry, and we have focused our business in this segment of the
industry. According to estimates of the Federal Transit Administration, in 1997
there were approximately 331 transit districts in the United States operating
more than 40,000 transit buses. The Canadian Urban Transit Association estimated
that approximately 11,548 urban transit vehicles were in use in Canada in 1999.
Transit districts range in size from very large districts with thousands of
vehicles to small districts with 10 or fewer vehicles. Advertising displays
represent a significant source of revenue to transit districts.

Agreements with transit districts are generally awarded through a competitive
proposal process. Each transit district evaluates proposals based on a number of
criteria, but primarily on the basis of the minimum amount that the bidder
guarantees to pay to the district. A transit agreement typically requires the
transit advertising operator to guarantee to pay the transit district the
greater of a minimum stated amount or a percentage of the advertising revenues
generated by the operator's use of the district's vehicles. These expenses
appear on our financial statements included under the heading "Occupancy"
expenses and totaled in aggregate $18,558,670 in fiscal 2002.
<PAGE>
The out-of-home advertising industry includes several large advertising and
media companies with operations in multiple markets. It also includes many small
and local companies operating a limited number of displays in a single or a few
local markets. There has been, and we expect there will continue to be,
consolidation in the out-of-home advertising industry.

OBIE MEDIA STRATEGY

Obie Media's overall business strategy is to expand upon our national presence
to become a leader in the out-of-home advertising industry. Our strategy is to
increase revenues and improve profitability by providing local, regional and
national advertisers with efficient access to one or multiple markets. The
following are components of our strategy:

o    DEVELOP REGIONAL OPERATING CENTERS. We seek to increase revenues,
     profitability and operating efficiencies by developing and using regional
     operating centers, or hubs. In developing hubs, we seek to establish an
     initial base of operations in a geographic region by obtaining exclusive
     agreements with one or more significant transit districts. We then seek to
     expand our market presence by bidding for contracts with other transit
     districts in that region and by expanding the range of non-transit products
     and services we can offer there. We believe this hub strategy will help us
     grow revenue and reduce costs by enabling us to provide sales and
     administrative services efficiently to several intra-regional markets from
     one strategically located operating base.

o    ACQUIRE ADDITIONAL TRANSIT ADVERTISING AGREEMENTS. We believe that by
     acquiring additional transit advertising agreements we can increase our
     operating efficiencies and geographic diversity while creating additional
     bases from which to achieve further market penetration. We expect to
     experience increased revenue and profitability from additional transit
     agreements as we continue to implement our direct sales and product
     strategies.

o    MAINTAIN A SIGNIFICANT, PROACTIVE SALES FORCE. We believe we can increase
     display occupancy levels by developing, training and retaining a
     significant, proactive sales force that sells directly to local advertisers
     and, more traditionally, to advertising agencies, thereby maximizing our
     advertising revenues. We believe our ratio of sales personnel to display
     inventory is higher than the industry average. We devote significant
     resources to recruit and train individuals who will excel in our culture
     and in our expected competitive environment. The sales force is motivated
     by an incentive-based compensation program and supported by a network of
     experienced local managers who operate under a centrally coordinated
     marketing plan. Management believes the size, quality and motivation of
     Obie's sales force afford us a competitive advantage.

o    INCREASE REVENUES FROM EXISTING DISPLAY SPACE. We seek to increase the
     revenue potential of our available transit and outdoor advertising display
     inventory by offering innovative transit products and maximizing the
     percentage of time our display space is occupied. We offer innovative
     transit products including vinyl displays that are physically larger than
     traditional transit advertisements. These vinyl displays offer customers
     greater impact while providing us with more revenue from a given transit
     display space. We seek to sell advertising on transit and outdoor displays
     under extended contracts, which enable us to fill display space that would
     normally be vacant between traditional advertising campaigns.

o    SELECTIVELY PURSUE ACQUISITION OPPORTUNITIES. Obie regularly evaluates
     opportunities to enter new markets and increase its presence in existing
     markets through the selective acquisition of out-of-home advertising
     companies or assets. We intend to continue focusing our acquisition efforts
     on expanding around our existing hubs and developing new hubs in regions
     where attractive growth and consolidation opportunities exist.

o    INCREASE INVENTORY OF OUTDOOR DISPLAYS. We look to increase Obie's market
     penetration by acquiring or building additional outdoor displays in new and
     existing markets. Management believes that a resulting increase in
     inventory
<PAGE>
     will provide advertisers a greater variety of display alternatives and
     leverage Obie's existing sales, design and production capabilities.

o    EXPAND OBIE MEDIA'S NATIONAL SALES EFFORT. To coordinate and expand our
     sales efforts more effectively to national advertisers and national
     advertising agencies, Obie Media has, through its wholly owned subsidiary
     Select Media, Inc., established national sales offices in Los Angeles,
     Chicago, New York City, San Francisco and Toronto, and we have a national
     sales presence in Dallas and a sales representation arrangement in
     Montreal. Management believes further growth and expansion into new markets
     will continue to increase our national sales. In addition, we now also
     broker national advertising services for outdoor companies in markets other
     than where we currently operate.

o    ATTRACT NEW ADVERTISERS THROUGH DIRECT LOCAL SALES. By selling directly to
     local businesses not represented by advertising agencies, we seek to obtain
     a larger share of the overall advertising expenditures in our markets and
     broaden our customer base for out-of-home advertising. We dedicate
     substantial resources to directly target local businesses whose advertising
     expenditures may not typically include out-of-home advertising and
     introduce them to the benefits of the medium. Obie also offers
     comprehensive sales, marketing and creative services that make it easier
     for these potential customers to purchase out-of-home advertising.

o    PRODUCE IN-HOUSE THE VAST MAJORITY OF THE PRODUCT GENERATED THROUGH DIRECT
     LOCAL SALES. We seek to produce a significant amount of display content for
     our transit advertising customers which otherwise would be subcontracted to
     outside vendors.

PRODUCTS AND MARKETS

Obie Media offers advertisers a wide range of out-of-home advertising products,
including transit advertising and outdoor advertising displays. Obie's product
mix provides advertisers with significant flexibility in their advertising
programs and allows it to cross-sell multiple products and leverage its design
and production capabilities. We also have benefited from improvements in
production technology, including the use of computerized design, vinyl
advertising copy and improved lighting techniques. These improvements have
facilitated a more dynamic, colorful and creative use of the out-of-home medium.

TRANSIT ADVERTISING. As of November 30, 2002, we had 36 exclusive agreements
with transit districts in the United States and Canada to operate transit
advertising displays on over 7,000 transit vehicles, excluding those contracts
with districts in San Antonio, TX and Cincinnati (bus contract only) that were
canceled in December 2002. The markets in which these remaining transit
districts are located include nine of the 30 largest U.S. markets--Dallas;
Portland, Oregon; St. Louis; Sacramento; Hartford; Ft. Lauderdale; Tampa,
Indianapolis, and Kansas City, Missouri--and the third-largest Canadian market,
Vancouver, British Columbia. Pursuant to Obie's transit advertising agreements,
we are the exclusive seller of exterior advertising on the transit vehicles
operated by the contracting transit districts. Typically, these agreements also
provide us the right to sell advertising on the interior of the vehicles.

Agreements with transit districts are awarded through a competitive proposal
process. Each transit district evaluates proposals based on a number of
criteria, but primarily on the basis of the minimum amount that the bidder
guarantees to pay to the district and the maximum total revenues available to
the district under the agreement. A transit agreement typically requires the
transit advertising operator to guarantee the transit district the greater of a
minimum stated amount or a percentage of the advertising revenues generated by
the operator's use of the district's vehicles. Transit advertising operators
often must post performance bonds or letters of credit to secure their
guarantees under their transit agreements. Obie Media's transit agreements
typically have terms of three -to five years, with renewals or extensions
granted either unilaterally at the discretion of the transit district or upon
the mutual agreement of the district and Obie Media. Some of our transit
district agreements
<PAGE>
provide that the transit district may terminate the agreement before the end of
the specified term at the convenience of the transit district, or if the transit
district determines that such termination is in the public best interest. These
expenses appear on Obie's financial statements included under the heading
"Occupancy" expenses and totaled in aggregate $18,558,670 in fiscal 2002. Obie
also sells advertising on more than 700 transit benches in Portland, Oregon,
approximately 100 transit shelters in Cincinnati, more than 250 benches in Fort
Worth, Texas and on 28 transit shelters and 104 benches in Kelowna, B.C..
Management believes these products complement Obie's other product offerings and
intends to attempt to secure additional shelters, dioramas and transit benches
in our markets.

Transit districts range in size from very large districts with thousands of
vehicles to small districts with 10 or fewer vehicles. Through our hub strategy
and proactive marketing to local advertisers, we can offer our services
efficiently to large and small transit districts. The following table sets forth
certain information about Obie Media's transit district agreements as of
November 30, 2002, excluding the bus contracts in San Antonio, Texas and
Cincinnati, Ohio which ended in December 2002:
<TABLE>
<CAPTION>
TRANSIT DISTRICT AGREEMENTS                 DMA RANK        NO. OF VEHICLES SERVED     SINCE        EXPIRATION DATE
                                                                                                        (FISCAL)
<S>                                         <C>                      <C>                <C>               <C>
British Columbia
         Vancouver                          3 (CDN)                  1,136              1998              2005
         Victoria and 27 smaller districts  NA                         380              1998              2005
         Kelowna                            NA                          42              2002              2006
Texas
         Dallas                             7                          809              1997              2007

Oregon
         Portland                           23                         726              1994              2004
         Eugene and Springfield            122                         102              1980 (1)          2005
         Salem                              NA                          54              1994              2006
Missouri
         St. Louis                          22                         534              1999              2004
         Kansas City                        30                         280              1999              2004
Wisconsin
         Milwaukee                          33                         500              1992 (2)          2006
         Madison                            84                         170              1999              2004
         Racine                             NA                          23              1997 (2)          Annual
         Kenosha                            NA                          47              1996 (2)          2003
Connecticut
         Hartford, New Haven and Stamford   27                         380              1996 (2)          2004
         Danbury                            NA                          52              1999              2004
         Bridgeport                         NA                          52              1981 (2)          2003
         New Britain                        NA                          20              1981 (2)          Annual
         Waterbury                          NA                          41              1981 (2)          Annual
California
         Sacramento                         19                         246              1994              2005
         Stockton                           NA                         111              1989              Annual

Florida
         Ft. Lauderdale                     16                         202              1998 (2)          2003
         West Palm Beach                    43                         139              1998 (2)          2003
         Daytona Beach                      NA                          50              1981 (2)          2004
         Tampa                              14                         150              2001              2006
<PAGE>
Indiana
         Indianapolis                       26                         141              2001              2004
Ontario, Canada
         London                             NA                         170              1999              2004
         Burlington                         NA                          46              1999              2004
         Oshawa                             NA                          41              1999              2004
         Mississauga                        NA                         313              2002              2005
         Niagara Falls                      NA                          26              1999              2004
 Washington
         Spokane                            77                         133              1999              2006
         Jefferson County                   NA                          16              1999              2003
         Yakima                            125                          22              1999              2004
         Tri-Cities                        125                          60              2001              2006
         Vancouver                          23                         101              2001              2006
         Wenatchee                          NA                          20              2001              2006
Total                                                                7,335
</TABLE>

(1) This agreement was serviced by a division of Obie Industries (Obie Media's
parent corporation until 1996) prior to 1987, when Obie Media was formed.

(2) These dates reflect periods of service under agreements with P & C, which
Obie Media acquired in September 1998.

The above transit district agreements are scheduled to expire as follows:

                                    Approximate
                                    Number of Vehicles
                  Number of         Covered Under
                  Agreements        Agreements
Fiscal            Scheduled to      Scheduled to
Year              Expire            Expire

2003              5                     456
2004              13                  2,638
2005              5                   2,177
2006              8                   1,060
2007              1                     809

Certain of our transit district agreements provide for additional one-year to
five-year renewals beyond the specified expiration date, either unilaterally by
the transit district or by mutual agreement of Obie Media and the transit
district. The table above represents the expiration date in the contract,
excluding possible extensions.

TRANSIT DISPLAY PRODUCTS. We offer traditional and innovative, non-traditional
transit advertising products. Traditionally, transit advertisements have been
inserted into metal frames mounted on the exterior or interior of a bus.
Industry standard sizes include "Kings," "Queens," "Tails" and "Heads." While
still offering traditional advertising products, Obie Media also offers vinyl
displays that cover almost the entire side and/or rear of a bus. These vinyl
products create significant additional revenue potential per bus when compared
to traditional products. Management believes these products also give Obie a
competitive advantage in bidding for transit advertising agreements in districts
that use, or are willing to use them.




<PAGE>
OUTDOOR ADVERTISING DISPLAYS. Obie Media owns and operates over 1,200 billboards
primarily in Washington, Oregon, California, Montana, Wyoming and Idaho. Many of
Obie's billboards are directional bulletins, which are large format displays
ranging from 160 to 672 square feet in size. Obie's bulletins are generally
located on major thoroughfares and provide greater impact and higher value than
traditional posters.

We lease the property underlying our billboards, generally under 10-year leases
that give us renewal rights for two additional five-year periods. The lessor
typically reserves the right to cancel the lease if construction of permanent
improvements on the subject property conflicts with the billboard.

Most of Obie's billboards were designed and installed within the last decade,
and most are built of steel and engineered to withstand high winds. More than
two-thirds of our billboards are illuminated. The displays are insured against
damage caused to them by storms, vandalism and most other causes. Obie Media
also leases building walls in urban areas for wallscape displays. Wallscapes are
painted or printed on vinyl surfaces or directly on the sides of buildings. Obie
currently leases 7 building walls for wallscape displays in Seattle, 16 in
Portland and 19 in Spokane. The following table gives the number of Obie's
outdoor displays at November 30, 2002:

MARKET                     DISPLAYS

Washington                 468
Oregon                     156
California                  87
Montana                    247
Wyoming, Idaho
and other                  259
                           ---
Total                    1,217

SALES AND SERVICE. In each of Obie's principal markets, Obie Media maintains a
large, high quality, proactive sales force. Management believes Obie's ratio of
sales personnel to display inventory is higher than the industry average. At
November 30, 2002, Obie had 92 sales and marketing employees. Obie's superior
sales and service efforts are a key element in maximizing our inventory
occupancy levels.

Management views our proactive sales efforts as an important part of our
culture. In recruiting a sales force, we screen applicants carefully. We
typically hire college graduates who have demonstrated their suitability and
aptitude to excel in our unique sales environment. New sales employees undergo
extensive training and are supervised by regional sales managers with
substantial advertising sales experience. The company also uses a computer
based, on-line customer service and management software system that can be
accessed and utilized wherever internet connectivity is available. Obie Media
and each of our sales representatives jointly establish individual sales
targets. Management meets monthly with all our salespeople to acknowledge and
reward individuals who are meeting or exceeding their targets. A sales
representative's compensation depends significantly on meeting or exceeding
individual targets.

Obie has significantly expanded its national sales presence in recent years. To
complement our growth, we have established, through our wholly owned subsidiary
Select Media, Inc., national sales and marketing offices in Los Angeles,
Chicago, New York City, San Francisco and Toronto. Obie's national sales team
services national advertising accounts, calls on customers in major cities where
Obie Media does not have sales offices and supports Obie's sales force in local
markets. We also provide a national advertising brokerage service to other
outdoor advertising companies in markets in which we do not currently operate.

Management works directly with companies and advertising agencies to coordinate
the marketing, production and installation of advertising displays. Obie's sales
personnel also serve as customer service representatives, maintaining frequent
and regular contact with our advertising customers to resolve customer concerns
in the field. Management believes that our high quality customer service
contributes to customer loyalty and improves renewal rates.
<PAGE>
Out-of-home advertisements are traditionally sold for a few months at a time. To
increase occupancy, we employ several techniques to encourage customers to
commit to longer contracts, including offering incentives through Obie's rate
structure and pricing policies. We sell certain innovative transit products
primarily by means of year-long contracts. We also sell space on almost all of
our outdoor advertising displays by means of extended contracts, and offer
outdoor display customers the opportunity to rotate their advertisements among
several display faces within the same market.

DESIGN AND PRODUCTION

Obie maintains its own design and production facilities in Eugene, Oregon. Obie
offers advertisers customized design and production services as well as display
space. Charges for design and production are typically added to the cost of the
space and billed to customers over the life of the advertising contract.
Management believes that Obie's design and production capabilities give it a
significant competitive advantage in direct sales to advertisers, particularly
those it targets who do not have an advertising agency, and brings new customers
to the out-of-home advertising medium.

The design department works with these advertisers and with Obie's sales
representatives to create advertising copy, design and layout. Customers that
are represented by advertising agencies generally arrange for the production of
their ads, with Obie Media providing installation services. We increasingly act
as a broker with respect to this production. In the second quarter of fiscal
2001, we acquired a second large-format digital production printer for an
approximate cost of $400,000 and a third in December 2001 for approximately
$250,000. This additional capacity allows us to produce approximately 95% of
contracted production services in-house.

CUSTOMERS

Obie Media maintains a broad base of local, regional and national advertising
customers. Most of our regional and national customers are represented by
advertising agencies. Customers represented by advertising agencies accounted
for approximately 45% of our gross revenues in fiscal 2002 (47% in fiscal 2001,
excluding Chicago advertising agency business). Consistent with standard
industry practice, advertising agencies working with Obie Media typically retain
15% of the gross advertising revenues from their accounts. Advertising agencies
generally create the artistic design and written content of their customers'
advertising. They plan and implement their customers' overall advertising
campaigns, including the selection and purchase of advertising media. Obie
Media's sales personnel, including its national sales team, are trained to work
closely with advertising agencies to service the needs of these customers.

A key component of Obie's sales and marketing strategy is the proactive
marketing of services to local advertisers. Local advertisers tend to have
smaller advertising budgets and require greater assistance from our production
and creative personnel to design and produce advertising copy. With respect to
local sales, we often expend significant sales efforts on educating potential
out-of-home advertising customers about the cost and reach benefits of the
medium and on developing advertising strategies. While price and availability of
display space are important factors in local sales, service and customer
relationships are also critical. Management believes that our strength in sales,
design and service gives us an advantage in local sales, and that our direct
sales focus on local companies significantly contributes to increased occupancy
and renewal rates. Further, management believes this focus is an important
competitive advantage that enables us to serve smaller transit districts
efficiently.

No single advertising customer represented more than 10 percent of Obie's
revenues for any of the periods presented in the accompanying financial
statements.
<PAGE>
COMPETITION

Obie Media's markets are highly competitive. In the transit advertising market,
we compete with other out-of-home advertising companies that submit proposals
for exclusive agreements with transit districts by means of a formal proposal
process. In the outdoor advertising display market, we compete with other
out-of-home advertising companies for customers. We also compete for customers
with other advertising media, including broadcast, satellite and cable
television, radio, print media, direct mail marketing and displays in shopping
centers and malls, airports, stadiums, movie theaters and supermarkets and on
taxis, trains and subways. Substantial competition exists among all advertising
media on a cost-per-thousand-impressions basis and on the ability to effectively
reach a particular demographic section of the market. As a general matter,
competition is confined to defined geographic markets.

In recent years, there has been significant consolidation among Obie's
competitors, including consolidation between out-of-home advertising companies
and broadcast or other media companies. For example, in May 1999, Infinity
Broadcasting Corporation ("Infinity"), now a subsidiary of Viacom Inc. and the
sole shareholder of Viacom Outdoor (formerly TDI Worldwide, Inc.), agreed to
acquire Outdoor Systems, Inc., a leading company in the outdoor advertising
display market. In 2002, Clear Channel Communications, Inc. acquired The
Ackerley Group, Inc., the parent of outdoor media company, AK Media.

Several of our competitors, including diversified media companies such as
Viacom, are substantially larger, better capitalized, more widely known and have
access to substantially greater resources than Obie Media. These traits may
provide competitive advantages, particularly in large advertising markets.

TRANSIT. The transit advertising market has historically been fragmented,
consisting of a few national transit advertising companies with operations in
multiple markets and numerous small companies operating under one or a few
agreements. In large advertising markets, we encounter direct competition for
transit agreements from Viacom Outdoor, the largest transit advertising company
in the United States, and a dominant competitor in such markets. Competition
among transit advertising companies is primarily based on obtaining and
retaining agreements with transit districts. Agreements with transit districts
are awarded primarily on the basis of the minimum amount the bidder guarantees
to the district. Other factors that transit districts may consider in awarding
agreements are the bidder's financial ability to support its minimum revenue
guarantee, the bidder's business reputation and the soundness of the bidder's
marketing plan. The agreements generally give the operator the exclusive right
to provide transit advertising services within the transit district. The number
and nature of competitors for each agreement depend upon the desirability of the
market, including the number of vehicles operated by the transit district, and
the size and rank of the market.

OUTDOOR ADVERTISING DISPLAYS. The outdoor advertising display market is also
fragmented. Several large outdoor advertising companies have operations in
multiple markets. Many more small companies operate a limited number of displays
in a single or a few local markets. Although some consolidation has occurred in
this segment of the out-of-home industry over the past few years, the OAAA
estimated that, as of 1999, there were approximately 560,000 outdoor displays in
the United States operated by more than 500 companies. The primary competitive
factors in the outdoor advertising display market are the location of a
company's displays and the price charged for their use.

GOVERNMENT REGULATION

The government extensively regulates the outdoor advertising industry at the
federal, state and local levels. These laws and regulations limit the growth of
outdoor advertising companies and operate as a substantial barrier to entry in
the industry and, in limited circumstances, may restrict advertising content.
Construction of new outdoor structures has been substantially restricted to
commercial and industrial areas. Many jurisdictions also have restricted the
location, relocation, height and size of outdoor advertising structures. Some
jurisdictions also restrict the ability to enlarge or upgrade existing
structures, such as converting from wood to steel or from non-illuminated to
illuminated displays, and restrict the reconstruction of structures that
<PAGE>
are substantially destroyed as a result of storms or other causes. Some
jurisdictions have enacted local laws and ordinances that prohibit wallscapes
and other outdoor advertising on urban buildings.

Management believes Obie's displays conform to current laws and regulations.
When leasing property for the installation of new outdoor advertising displays,
Obie carefully reviews applicable laws, including building, sign and zoning
ordinances. Because billboards are typically located adjacent to roads and
highways, they are also subject to condemnation or other actions by governmental
entities in the event of road or highway improvement or expansion. While
compensation for such actions is generally available, under existing state and
local regulations, Obie may not be permitted to relocate any condemned displays.

In limited circumstances, laws and governmental regulations may restrict the
content of outdoor advertising. For example, some states have banned all outdoor
advertising of tobacco products. In November 1998, 46 states signed a settlement
agreement with the four largest American tobacco companies. Among other things,
the agreement bans transit and outdoor advertising of the companies' tobacco
products in the 46 states. The U.S Congress has also considered legislation that
would severely restrict or ban such advertising. The outdoor advertising
industry is thus heavily regulated and existing or future laws or regulations
could adversely affect the industry. To date, our operations have not been
materially adversely affected by such laws and regulations.

EMPLOYEES

At November 30, 2002, Obie had 218 full-time and 14 part-time employees, of whom
92 were primarily engaged in sales and marketing, 30 were engaged in art design
and production, 51 were engaged in installation, construction or maintenance of
transit or outdoor advertising displays, and 59 were employed in financial,
administrative or similar capacities. None of our employees are covered by
collective bargaining agreements, except for 4 installers in Portland, Oregon
and 10 installers in British Columbia. Management believes that our
relationships with our employees are good.

ITEM 2.    DESCRIPTION OF PROPERTIES

Obie's headquarters are located in a 20,000 square foot facility in Eugene,
Oregon. The headquarters includes space for its centralized design and
production departments, as well as its accounting, credit, marketing and
management personnel. The headquarters is leased from Obie Industries, an
affiliate of Obie Media, pursuant to a lease under which Obie Media moved into
the facility and began paying rent in May 1997. Lease payments were
approximately $329,000 in each of fiscal 2002 and 2001, and $268,000 during
fiscal 2000. Brian Obie, Obie's Chairman of the Board, President and Chief
Executive Officer, is the President, a director and the controlling shareholder
of Obie Industries. Delores Mord, Obie's Secretary and a director of Obie Media,
is Vice President, a director and a shareholder of Obie Industries. Management
believes the headquarters lease carries terms, including rental rates, term, and
other rights and obligations, which are substantially similar to those that
would be available in arms' length transactions from unrelated parties.

Obie leases parcels of property beneath outdoor advertising structures. Obie's
site leases are generally for a term of ten years, with two five-year renewal
options at Obie's discretion. We also lease local operating offices for sales,
service and installation in Spokane and Yakima, Washington; Portland and Salem,
Oregon; Ft. Lauderdale, West Palm Beach and Tampa, Florida; Hartford and New
Haven, Connecticut; Cincinnati, Ohio; Dallas and San Antonio, Texas; Sacramento
and Stockton, California; St. Louis and Kansas City, Missouri; Milwaukee and
Madison, Wisconsin; Indianapolis, Indiana; Billings and Great Falls, Montana;
Vancouver, Victoria, Kelowna and Nanaimo, British Columbia; and London,
Mississauga, Whitby and Burlington, Ontario. Obie also leases national sales
offices in Los Angeles, Chicago, New York City, San Francisco and

<PAGE>
Toronto. Total lease payments for the forgoing leases were $2.7 million, $2.1
million, and $1.7 million for fiscal 2002, 2001 and 2000, respectively.

ITEM 3.    LEGAL PROCEEDINGS

Obie is defended in litigation in the ordinary course of its business and in the
aggregate such suits are not expected to be material.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS

No matters were submitted to a vote of Obie Media's shareholders during the
fourth quarter of fiscal 2002.

PART II

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

PRICE RANGE OF COMMON STOCK

Since November 21, 1996, Obie Media's Common Stock has been traded on the Nasdaq
Market under the symbol "OBIE." The following table presents the high and low
bid prices of Obie's Common Stock as reported by The Nasdaq Stock Market, as
adjusted to give retroactive effect to 11-for-10 stock splits declared by Obie
Media in October 1997, November 1998 and November 1999:

FISCAL 2002                HIGH     LOW
         First Quarter   $  3.40  $ 1.84
         Second Quarter     3.84    2.95
         Third Quarter      3.67    2.30
         Fourth Quarter     3.50    1.65

FISCAL 2001                HIGH     LOW
         First Quarter    $11.50  $ 7.25
         Second Quarter     8.94    6.50
         Third Quarter      7.10    2.48
         Fourth Quarter     3.55    1.65

As of February 12, 2003, there were approximately 91 holders of record of Obie's
Common Stock. Management believes the number of beneficial owners is
substantially greater than the number of record holders because a large portion
of Obie's outstanding Common Stock is held of record in "street name."


















<PAGE>
DIVIDENDS

Obie has not paid cash dividends on its common stock during the last two fiscal
years and does not anticipate doing so in the foreseeable future. We plan to
retain any future earnings to finance operations. In addition, Obie Media's
credit agreements may limit Obie's ability to pay dividends or make other
distributions on Obie's common stock.


ITEM 6.   SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
IN THOUSANDS EXCEPT PER                                  Years Ended November 30
SHARE AMOUNTS                                  2002        2001      2000       1999       1998

Statement of Operations Data
<S>                                          <C>          <C>      <C>        <C>       <C>
Net Sales                                    44,758       43,574   48,304     36,460     22,718
Production, occupancy and sales              33,725       35,209   35,609     26,438     14,793
General and Administrative                    7,901        9,208    6,882      4,677      3,628
Depreciation and Amortization                 2,181        2,077    1,871      1,513        935
Start-up Costs                                   __           __      116        668        106
Contract Settlement                              __           __       __     (1,077)        __
         Operating (loss) income                952       (2,920)   3,826      4,241      3,255
Results of discontinued operations           (1,243)      (3,915)      __         __         __

Net  Income (Loss) Available for
Common Shareholders                          (2,017)      (7,248)   1,618      2,012      1,501

EBITDA (1)                                    1,890       (5,849)   5,697      5,754      4,190

Basic Net Income (Loss) per Share            ($0.34)      ($1.23)   $0.27      $0.40      $0.32

Diluted Net Income (Loss) per Share          ($0.34)      ($1.23)   $0.27      $0.39      $0.32

Balance Sheet Data
Working Capital                             $ 6,511      $ 4,415  $10,544     $2,695     $1,033
Total Assets                                 38,127       44,161   38,937     32,704     27,647

Long-term Debt, less Current Portion         17,707       13,881   13,695      4,919     13,354

Shareholders' Equity                        $10,127      $12,149  $19,225    $17,365    $ 5,547
</TABLE>

(1)  "EBITDA" (earnings before interest, taxes, depreciation and amortization),
     a non GAAP financial measure, is defined as operating income (loss) before
     depreciation and amortization expense. While EBITDA should not be
     considered in isolation or as a substitute for net income (loss), cash
     provided by operating activities or other income or cash flow data prepared
     in accordance with generally accepted accounting principles, or as a
     measure of profitability or liquidity, management believes that it is
     widely used by some investors as one measure to evaluate the financial
     performance of companies in the out-of-home advertising industry.
     Accordingly, this information has been disclosed to facilitate the
     comparative analysis of Obie's operating performance relative to other
     companies in the out-of-home advertising industry.



<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations
following are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
us to make estimates and judgements that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities.

We believe that the estimates, assumptions and judgements involved in the
accounting policies described below have the greatest potential impact on our
financial statements, so we consider these to be our critical accounting
policies. Because of the uncertainty inherent in these matters, actual results
could differ from the estimates we use in applying the critical accounting
policies. Certain of these critical accounting policies affect working capital
account balances, including the reserve for uncollectible accounts receivable
and deferred income taxes. These policies require that we make estimates in the
preparation of our financial statements as of a given date. However, since our
business cycle is relatively short, actual results related to the estimates
relative to uncollectible accounts receivable are generally known within the six
month period following the financial statement date. Thus, these policies
generally affect only the timing of reported amounts across two to three
quarters. The estimate of deferred tax assets may affect reported amounts beyond
that time period.

Within the context of these critical accounting policies, we are not currently
aware of any reasonably likely events or circumstances which would result in
materially different amounts being reported.

RECOGNITION OF REVENUE

Revenue from advertising contracts is recognized ratably over the contract term,
and the estimated cost components of a contract (cost of the advertising space
and the costs of producing and installing advertising copy) are deferred and
matched against the periodic recognition of revenue on essentially a
straight-line basis. This method also necessitates the recognition of an
unearned revenue liability for billings to customers for time periods beyond the
end of the current accounting cycle.

DISCONTINUED OPERATIONS

Effective during its fiscal year ending November 30, 2002, the Company adopted
Statements of Financial Accounting Standards No. 144 and No. 146 "Accounting for
the Impairment of Long-Lived Assets" (SFAS 144) and "Accounting for Costs
Associated with Exit or Disposal Activities" (SFAS 146).

Pursuant to these pronouncements, the Company has classified as " Discontinued
Operations" the results of operations and any exit costs associated with transit
district contracts that were targeted for exit during the year. As a result the
Company has no further involvement with these markets. The US transit districts
included in Discontinued Operations are: Chicago, San Antonio, Cincinnati, and
Kitsap. The Canadian transit districts included are: Pickering, Whitby,
Cambridge and St. Catharines. Results of operations for these transit districts
for 2001 have been reclassified to Discontinued Operations for comparability
purposes. There were no discontinued operations to report in 2000.

RESERVE FOR UNCOLLECTIBLE ACCOUNTS RECEIVABLE

We make ongoing estimates relating to the collectiblity of our accounts
receivable and maintain a reserve for estimated losses resulting from the
inability of our customers to make required payments. In determining the amount
of the reserve, we consider
<PAGE>
our historical level of credit losses, the aging spread of accounts at the date
the estimate is made, trends in the overall media economy, and general business
conditions. Historically, losses from uncollectible accounts have not exceeded
our reserves except that writeoffs exceeded reserves by approximately $525,000
in fiscal 2002 and $1.4 million in fiscal 2001. Since we cannot predict future
changes in the financial stability of our customers, actual future losses from
uncollectible accounts may differ from our estimates. If the financial condition
of our customers were to deteriorate, resulting in their inability to make
payments, a larger reserve might be required. In the event that a smaller or
larger reserve was appropriate, we would record a credit or charge to
administrative expense in the period in which we made such a determination.

INCOME TAXES

We record valuation allowances against our deferred tax assets, when necessary,
in accordance with SFAS No. 109, Accounting for Income Taxes. Realization of
deferred tax assets (such as net operating loss carryforwards) is dependent on
future taxable earnings and is therefore uncertain. At least quarterly, we
assess the likelihood that our deferred tax asset balance will be recovered from
future taxable income. To the extent that we believe recovery is unlikely, we
establish a valuation allowance against our deferred tax assets increasing our
income tax expense in the period such determination is made. An increase in the
valuation allowance would result in a charge to income tax expense. A decrease
in the valuation allowance would result in a reduction to income tax expense.

On an interim basis, we estimate what our effective tax rate will be for the
full fiscal year and record a quarterly income tax provision in accordance with
the anticipated annual rate. As the fiscal year progresses we continually refine
our estimate based upon actual events and earnings during the year. This
continual estimation process periodically results in a change to our expected
tax rate for the fiscal year. When this occurs, we adjust the income tax
provision during the quarter in which the change in estimate occurs so that the
year-to-date provision is in accordance with the annual anticipated rate.

PROPERTY, PLANT AND EQUIPMENT AND OTHER LONG-LIVED ASSETS

Property, plant and equipment, including buildings, equipment, and computer
hardware and software is recorded at cost (including, in some cases, the cost of
internal labor) and is depreciated over estimated useful lives. Changes in
circumstances (such as technological advances or changes to our business
operations) can result in differences between the actual and estimated useful
lives. In those cases were we determine that the useful life of a long-lived
asset should be shortened, we increase depreciation expense over the remaining
estimated useful life to depreciate the asset to its salvage value.

On June 30, 2001, the FASB issued SFAS 142, "Goodwill and Other Intangible
Assets," which eliminates the amortization of goodwill and other acquired
intangible assets with indefinite economic useful lives. SFAS 142 is effective
for fiscal years beginning after December 15, 2001. Obie will adopt SFAS 142
effective December 1, 2002.

As of November 30, 2002 Obie had net unamortized goodwill in the amount of $5.4
million. SFAS 142 requires that goodwill be tested annually for impairment using
a two-step process. The first step is to identify a potential impairment and, in
transition, this step must be measured as of the beginning of the fiscal year.
However, a company has six months from the date of adoption to complete this
first step. Obie expects to complete that first step of the goodwill impairment
testing during the first quarter of the year ending November 30, 2003 (fiscal
year 2003). The second step of the goodwill impairment test measures the amount
of impairment loss (measured as of the beginning of the year of adoption), if
any, and must be completed by the end of the Company's fiscal year. Any
impairment loss resulting from the transitional impairment tests will be
reflected as the cumulative effect of a change in accounting principle in the
first quarter of fiscal year 2003. The Company does not believe that the result
of these impairment tests will have a material effect on the Company's earnings
and financial position. As a result of adopting SFAS 142 we will no longer
amortize goodwill. We would have amortized $516,000 related to goodwill
balances in fiscal 2003.
<PAGE>
OTHER CONTINGENCIES

In the ordinary course of business, we are involved in legal proceedings
involving contractual, employment relationships and a variety of other matters.
We record contingent liabilities resulting from claims against us when it is
probable that a liability has been incurred and the amount of the loss is
reasonably estimable. We disclose contingent liabilities when there is a
reasonable possibility that the ultimate loss will exceed the recorded
liability. Estimating probable losses requires analysis of multiple factors, in
some cases including judgements about the potential actions of third party
claimants and courts. Therefore, actual losses in any future period are
inherently uncertain. Currently, we do not believe that any of our pending legal
proceedings or claims will have a material impact on our financial position or
results of operations. However, if actual or estimated probable future losses
exceed our recorded liability for such claims, we would record additional
charges as other expense during the period in which the actual loss or change in
estimate occurred.

OVERVIEW

Obie Media is an out-of-home advertising company that markets advertising space
primarily on transit vehicles and outdoor advertising displays (billboards and
wallscapes). As of November 30, 2002, Obie had 36 exclusive agreements with
transit districts in the United States and Canada to operate transit advertising
displays. Since Obie's IPO in November 1996, the number of vehicles on which we
have the right to operate transit advertising displays has increased from
approximately 1,200 to over 7,000. We also operate and generally own more than
1,200 advertising displays on billboards and walls primarily in Washington,
Oregon, Montana, Wyoming, California and Idaho.

On December 5, 2001 the Company received notice from the Chicago Transit
Authority (CTA) that it was terminating the Company's transit advertising
agreement effective as of that date. The Company and the CTA had been disputing
settlement of 2001 transit fees in light of the nature of the early termination
and a shortage of advertising space made available to the Company, and the
parties entered into an agreement as of May 28, 2002 resolving all of the
outstanding issues.

The agreed upon fee for the 2001 contract year has been settled with the CTA at
$17 million, substantially less than the original contracted guaranteed payment
of $21.8 million. As of May 31, 2002, approximately $7.5 million had been paid
to the CTA, and an additional $1.5 million was paid on June 1, 2002. The balance
is payable in substantially equal monthly payments of $116,080 beginning June
2002 and ending May 2007, with an additional $1.0 million balloon payment due on
January 1, 2004. The monthly payments are without interest through May 2003, and
include a 5% interest charge thereafter. These periodic deferred payments have
been valued using a junior unsecured discount rate of 15%, resulting in a
present value of $6.1 million, which is included within long-term debt in our
balance sheet. The result is a present value of $15.1 million for the
settlement. The cost of the settlement is covered by previous accruals,
including an accrual which the Company established in the third quarter of
fiscal 2001.

A substantial portion of our loss for fiscal 2001 resulted from our payment of
minimum advertising revenues guaranteed to transit districts under our transit
district contracts. Beginning in the latter half of Fiscal 2001 we became
increasingly concerned about these minimum revenue guarantees in the face of
declining advertising revenues in some transportation districts. Accordingly, we
began to seek to restructure or terminate certain of these arrangements in a way
that would limit Obie's exposure to these payments to an amount that would
reflect a more appropriate sharing of revenues under our advertising contracts.
Between August 31, 2001 and February 15, 2003, we have renegotiated 11 contracts
that have resulted in transit guarantee reductions of $1.5 million in fiscal
2001and $3.4 million in fiscal 2002. It cannot be assured that we will be able
to eliminate or further reduce this type of risk and, if not, we may experience
further adverse impacts on our operating revenues, some or all of which may be
material.

In addition, during fiscal 2002, transit contract bids occurred in our transit
markets of Austin, Dallas and San Antonio, Texas, Kansas City, Cincinnati
(buses) and Santa Cruz and Sacramento, California. We were awarded new contracts
in Kansas City,
<PAGE>
Dallas and Sacramento as we were the high bidder for those contracts. A decision
is still pending for Santa Cruz. In the other markets mentioned above, except
for Austin, we had been experiencing significant operating losses due primarily
to the high minimum guaranteed payments to the transit authorities. In our
rebids of these markets we substantially reduced the amounts offered as
guaranteed payments, and as a result, the contracts were awarded to others. We
also terminated contracts in St. Catharines, Pickering and Whitby, all in the
Canadian province of Ontario. Since we have exited these markets, the results of
operations of these markets, plus the results relative to the Chicago market
termination and settlement described above, have been classified as results from
discontinued operations in our statement of operations.

Obie's operating results are affected by general economic conditions, as well as
trends in the advertising industry. Moreover, our historical growth has
primarily resulted from: (i) growth in our transit advertising business,
primarily resulting from new agreements with additional transit districts; (ii)
the acquisition of P & C on September 1, 1998; and (iii) the development and
acquisition of new outdoor displays. As a result of these factors, our operating
performance is not necessarily comparable on a period-to-period basis. We plan
to continue expanding through both internal growth and acquisitions.

OPERATING RESULTS

The following table presents certain items from Obie Media's consolidated
statements of income (and EBITDA) as a percentage of net revenues.

                             Year Ended November 30
                                                     2002     2001    2000
                                                     ----     ----    ----
Transit net advertising revenue                     85.0%     84.5%   87.0%
Outdoor net advertising revenue                     15.0      15.5    13.0
Net revenues                                       100.0     100.0   100.0
Operating expenses:
     Production, occupancy and selling              75.3      80.8    73.7
     General and administrative                     17.7      21.1    14.2
     Start-up costs                                   __        __     0.2
     Depreciation and amortization                   4.9       4.8     3.9
         Operating income   (loss)                   2.1      (6.7)    7.9
Interest expense                                     3.9       3.1     2.3
         Income (loss) before income taxes and
             Discontinued operations                (1.7)     (9.8)    5.6
Provision for (benefit from) income taxes            0.0      (2.1)    2.3
         Income (loss) from continuing operations   (1.7)     (7.7)    3.4
Results of discontinued operations                  (2.8)     (8.9)     __
         Net income (loss)                          (4.5)    (16.6)    3.4
EBITDA (1)                                           4.2     (13.4)   11.8

(1)  "EBITDA" (earnings before interest, taxes, depreciation and amortization),
     a non GAAP financial measure, is defined as operating income (loss) before
     depreciation and amortization expense. While EBITDA should not be
     considered in isolation or as a substitute for net income (loss), cash
     provided by operating activities or other income or cash flow data prepared
     in accordance with generally accepted accounting principles, or as a
     measure of profitability or liquidity, management believes that it is
     widely used by some investors as one measure to evaluate the financial
     performance of companies in the out-of-home advertising industry.
     Accordingly, this information has been disclosed to facilitate the
     comparative analysis of Obie's operating performance relative to other
     companies in the out-of-home advertising industry.
<PAGE>
COMPARISON OF YEARS ENDED NOVEMBER 30, 2002 AND 2001

RESULTS OF CONTINUING OPERATIONS

REVENUES. Obie's revenues are derived from sales of advertising on out-of-home
advertising displays, primarily on transit vehicles under transit district
agreements and on outdoor advertising displays we own or operate. Revenues are a
function of both the occupancy of these display spaces and the rates we can
charge. We focus our sales efforts on maximizing occupancy levels while
maintaining rate integrity in our markets. Over the past several years, our
transit advertising operations have expanded more rapidly than our outdoor
advertising operations. Net revenues for fiscal 2002 increased $1.2 million, or
2.7%, from $43.6 million in fiscal 2001 to $44.8 million. In fiscal 2002 the
entire increase related to net transit revenues as outdoor net revenues were
unchanged from fiscal 2001 to fiscal 2002.

PRODUCTION AND INSTALLATION EXPENSES. These expenses relate primarily to the
production of transit advertising content and the installation of the content on
transit vehicles, benches and shelters. Also included is the cost of billboard
content and installation. Production and installation expenses increased
$112,000 or 1.7% from $6.4 million in fiscal 2001 to $6.6 million in fiscal
2002. The increase was primarily related to increased production volume in
transit related production.

TRANSIT AND OUTDOOR OCCUPANCY EXPENSES. These expenses include fees paid to
transit authorities and lease payments to landowners for billboard sites. Under
Obie Media's transit agreements, we typically guarantee to pay the transit
district the greater of a minimum stated amount or a percentage of the
advertising revenues generated by our use of the district's vehicles. Occupancy
expense for outdoor structures includes the cost of illuminating outdoor
displays and property taxes on the outdoor advertising structures. Transit and
outdoor occupancy expenses decreased $1.8 million or 9.1% from $20.4 million in
fiscal 2001 to $18.6 million in fiscal 2002. The decrease is primarily as a
result of renegotiated transit fee arrangements mentioned above.

SELLING EXPENSES. Sales expenses consist primarily of employment and
administrative expenses associated with our sales force. These expenses
increased $256,000, or 3.1% from $8.4 million in fiscal 2001 to $8.6 million in
fiscal 2002. The increase was primarily a result of a general inflationary
increase in all expenses.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses include
costs related to individual markets, as well as corporate expenses. Expenses
related to individual markets include expenses for the personnel and facilities
required to administer that market and neighboring markets. Corporate general
and administrative expenses represent personnel and facilities costs for Obie
Media's executive offices and centralized staff functions which include
accounting, marketing, human resources and technology management.

General and administrative expenses decreased $1.3 million, or 14.2%, from $9.2
million in fiscal 2001 to $7.9 million in fiscal 2002. The decrease was a
combination of general inflationary increases in most expense items, offset by a
reduction in bad debt expenses in fiscal 2002 as compared to fiscal 2001, and
personnel reductions in marketing, human resources and the business office at
the corporate headquarters.

START-UP COSTS. Start-up costs are the costs Obie incurs in pursuing new transit
district agreements and the costs of establishing a sales force and office in a
new market prior to beginning to operate under a new agreement. These costs
consist primarily of travel expenses, various personnel costs, legal fees and
the costs of preparing proposals in response to transit district requests for
proposals. The amount of start-up costs we incur in the future will vary, both
in total amount and as a percentage of revenues, depending on the number and
complexity of proposals for new districts and our success in obtaining new
contracts.

There were no start-up costs in either fiscal 2002 or fiscal 2001.
<PAGE>
DEPRECIATION AND AMORTIZATION EXPENSES. Depreciation and amortization expenses
increased $104,000, or 5.0%, from $2.1 million in fiscal 2001 to $2.2 million in
fiscal 2002, primarily due to capital expenditures for outdoor advertising
displays as well as investment in digital production equipment as noted above.

OPERATING INCOME. Due to the events and factors discussed above we experienced
operating income of $952,000 in fiscal 2002, compared to an operating loss of
$2.9 million in fiscal 2001.

INTEREST EXPENSE. Interest expense increased $388,000, or 29.0%, from $1.3
million in fiscal 2001 to $1.7 million in fiscal 2001. The increase was due
primarily to the amortization of the discount on the Chicago Transit Authority
settlement.

PROVISION FOR INCOME TAXES. The Company accounted for all available loss
carryback refunds in the fiscal 2001 provision for income taxes. The Company has
substantial loss carryforwards, against which valuation allowances have been
provided. The net loss before income taxes resulted in a tax benefit of $2.0
million for fiscal 2001, the year in which carryback refunds were applied ($1.1
million of the benefit was applied to discontinued operations). The difference
between the statutory United States federal income tax rate and the beneficial
tax rate for both fiscal 2002 and 2001 is due primarily to the deferred tax
valuation reserve for the net operating loss carryforwards.

INCOME (LOSS) FROM CONTINUING OPERATIONS. Due to the items and factors discussed
above we experienced a loss of $773,000 in fiscal 2002 as compared to a loss of
$3.3 million in fiscal 2001.

RESULTS OF DISCONTINUED OPERATIONS

Most transit arrangements include a provision that a certain percentage of net
revenues be shared with the transit authorities (transit fees) on a revenue
sharing basis (a certain percentage to the transit authority, the balance
retained by Obie), but often with minimum payment requirements. Agreements that
contain large minimum transit fee payment guarantees significantly hinder Obie's
ability to manage its operating expenses in weak economic environments. These
high minimum payment requirements have prompted the Company to either negotiate
modifications to those contracts, negotiate or effect early terminations to the
contracts, or to exit the market at the end of the contract term.

As discussed above, discontinued operations contain the operating results, net
of income taxes, for transit markets from which we have exited. The discontinued
operations for fiscal 2002 include the operations of San Antonio, Texas,
Cincinnati, Ohio (transit), and the Ontario, Canada markets described above.
Discontinued operations for fiscal 2001 also included the results of operations,
including the results of the settlement, related to the Chicago, Illinois
market. The results of the Chicago operation and settlement included in fiscal
2001 is the primary reason for the $2.7 million reduction in the loss from
discontinued operations from fiscal 2001 to fiscal 2002.

NET LOSS

Obie realized a net loss of $2.0 million during fiscal 2002, compared to a net
loss of $7.2 million in fiscal 2001. The difference in the losses for fiscal
2002 and fiscal 2001were primarily due to the decrease in the loss from
discontinued operations in fiscal 2002 when compared to fiscal 2001, and the
absence of an income tax benefit for the operating loss in fiscal 2002.


<PAGE>
COMPARISON OF YEARS ENDED NOVEMBER 30, 2001 AND 2000

RESULTS OF CONTINUING OPERATIONS

REVENUES. Obie's revenues are derived from sales of advertising on out-of-home
advertising displays, primarily on transit vehicles under transit district
agreements and on outdoor advertising displays we own or operate. Revenues are a
function of both the occupancy of these display spaces and the rates we can
charge. We focus our sales efforts on maximizing occupancy levels while
maintaining rate integrity in our markets. Over the past several years, our
transit advertising operations have expanded more rapidly than our outdoor
advertising operations. Net revenues for fiscal 2001 decreased $4.7 million, or
9.8%, from $48.3 million in fiscal 2000 to $43.6 million in fiscal 2001. This
decrease was substantially the result of a general decline in national and local
transit advertising, offset partially by increased revenues generated in the
newly acquired markets of Tampa and Indianapolis. Net Transit revenues decreased
$5.2 million, or 12.3%, from $42.0 million in fiscal 2000 to $36.8 million in
fiscal 2001, primarily due to these same factors. Net Outdoor advertising
revenues increased approximately $437,000, or 6.9 %, from $6.3 million in fiscal
2000 to $6.7 million in fiscal 2001, primarily as a result of revenues
associated with price increases, improvements to existing billboards, and an
acquisition of additional billboards in Montana.

PRODUCTION AND INSTALLATION EXPENSES. These expenses relate primarily to the
production of transit advertising content and the installation of the contact on
transit vehicles, benches and shelters. Also included is the cost of billboard
content and installation. Production and installation remained unchanged at $6.4
million in both fiscal 2001 and 2001.

TRANSIT AND OUTDOOR OCCUPANCY EXPENSES. These expenses include fees paid to
transit authorities and lease payments to landowners for billboard sites. Under
Obie Media's transit agreements, we typically guarantee to pay the transit
district the greater of a minimum stated amount or a percentage of the
advertising revenues generated by our use of the district's vehicles. Occupancy
expense for outdoor structures includes the cost of illuminating outdoor
displays and property taxes on the outdoor advertising structures. These
expenses decreased $1.5 million, or 6.7% from $21.9 million in fiscal 2000 to
$20.4 million in fiscal 2001. This decrease was primarily a result of the
reduction in percentage transit fee payments to transit authorities in light of
the reduced transit revenues in fiscal 2001.

SELLING EXPENSES. Sales expenses consist primarily of employment and
administrative expenses associated with our sales force. These expenses
increased $1.0 million, or 13.8% from $7.3 million in fiscal 2000 to $8.4
million in fiscal 2001. This increase was the result of higher than expected
personnel turnover and related costs in fiscal 2001 as compared to fiscal 2000,
and the expansion of the overall sales force during 2001.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses include
costs related to individual markets, as well as corporate expenses. Expenses
related to individual markets include expenses for the personnel and facilities
required to administer that market and neighboring markets. Corporate general
and administrative expenses represent personnel and facilities costs for Obie
Media's executive offices and centralized staff functions.

General and administrative expenses increased $2.3 million, or 33.8%, from $6.9
million in fiscal 2000 to $9.2 million in fiscal 2001. The increase resulted
primarily from an increase of bad debt expenses of $1.7 million in fiscal 2001
as compared to fiscal 2000, and increases in personnel and related costs
associated with managing the growth of Obie's transit business, including the
addition of new districts.

START-UP COSTS. Start-up costs are the costs Obie incurs in pursuing new transit
district agreements and the costs of establishing a sales force and office in a
new market prior to beginning to operate under a new agreement. These costs
consist primarily of travel expenses, various personnel costs, legal fees and
the costs of preparing proposals in response to transit
<PAGE>
district requests for proposals. The amount of start-up costs we incur in the
future will vary, both in total amount and as a percentage of revenues,
depending on the number and complexity of proposals for new districts and our
success in obtaining new contracts. There were no start-up costs for fiscal 2001
as compared to $116,000 in fiscal 2000.

DEPRECIATION AND AMORTIZATION EXPENSES. Depreciation and amortization expenses
increased $207,000, or 11.1%, from $1.9 million in fiscal 2000 to $2.1 million
in fiscal 2001, primarily due to capital expenditures for outdoor advertising
displays and digital production equipment.

OPERATING INCOME. Due to the events and factors discussed above Obie experienced
an operating loss of $2.9 million in fiscal 2001, compared to operating income
of $3.8 million in fiscal 2000.

INTEREST EXPENSE. Interest expense increased $216,000, or 19.3%, from $1.1
million in fiscal 2000 to $1.3 million in fiscal 2001, primarily due to the
increased use of the working capital credit line and additional long-term
borrowings.

PROVISION FOR INCOME TAXES. The loss before income taxes resulted in a tax
benefit of $2.0 million for fiscal 2001, compared to a provision for income
taxes of $1.1 million during fiscal 2000 ($1.1 million of the fiscal 2001 amount
has been allocated to discontinued operations). Obie's beneficial tax rate was
21.7% for fiscal 2001. The difference between the statutory United States
federal income tax rate and the beneficial tax rate for fiscal 2001 is due
primarily to a deferred tax valuation reserve for net operating loss
carryforwards. Obie's effective tax rate for fiscal 2000 was 40.2%, higher than
the statutory rate due to provisions for foreign and state income taxes.

INCOME (LOSS) FROM CONTINUING OPERATIONS. Due to the reasons and factors noted
above, Obie realized a net loss from continuing operations of $3.3 million
during fiscal 2001, compared to net income of $1.6 million in fiscal 2000.

RESULTS OF DISCONTINUED OPERATIONS

Most transit arrangements include a provision that a certain percentage of net
revenues be shared with the transit authorities (transit fees) on a revenue
sharing basis (a certain percentage to the transit authority, the balance
retained by Obie), but often with minimum payment requirements. Agreements that
contain large minimum transit fee payment guarantees significantly hinder Obie's
ability to manage its operating expenses in weak economic environments. These
high minimum payment requirements have prompted the Company to either negotiate
modifications to those contracts, negotiate or effect early terminations to the
contracts, or to exit the market at the end of the contract term.

As discussed above, discontinued operations contain the operating results, net
of income taxes, for transit markets from which we have exited. The discontinued
operations for fiscal 2001 include the operations of San Antonio, Texas,
Cincinnati, Ohio (transit), and the Ontario, Canada markets described above.
Discontinued operations for fiscal 2001 also included the results of operations,
including the results of the settlement, related to the Chicago, Illinois
market. There were no results from discontinued operations to report in fiscal
2000.

NET LOSS

Due to the reasons and factors noted above, Obie realized a net loss of $7.2
million during fiscal 2001, compared to net income of $1.6 million in fiscal
2000.

RECENT DEVELOPMENTS

A substantial portion of Obie's loss for fiscal 2001 resulted from the payment
of minimum advertising revenues guaranteed to transit districts under our
transit district contracts. Beginning in the latter half of Fiscal 2001 we began
to be increasingly concerned about these minimum revenue guarantees in the face
of declining advertising revenues in some transportation
<PAGE>
districts. Accordingly, we began to seek to restructure or terminate certain of
these arrangements in a way that would limit Obie's exposure to these payments
to an amount that would reflect a more appropriate sharing of revenues under our
advertising contracts. Between August 31, 2001 and February 15, 2003, we have
renegotiated 11 contracts that have resulted in transit guarantee reductions of
$1.5 million in fiscal 2001and $3.4 million in fiscal 2002. It cannot be assured
that we will be able to eliminate or further reduce this type of risk and, if
not, we may experience further adverse impacts on our operating revenues, some
or all of which may be material.

In addition, during fiscal 2002, transit contract bids occurred in our transit
markets of Austin, Dallas and San Antonio, Texas, Kansas City, Cincinnati
(buses) and Santa Cruz and Sacramento, California. We were awarded new contracts
in Kansas City, Dallas and Sacramento. Contracts for the other markets were
awarded to competitors, except for Santa Cruz where a decision by the transit
authority is still pending. The results of operations of those markets where we
were not the successful bidder have been included in the results of discontinued
operations in our statement of operations.

On December 5, 2001 the Company received notice from the Chicago Transit
Authority (CTA) that it was terminating the Company's transit advertising
agreement effective as of that date. The Company and the CTA had been disputing
settlement of 2001 transit fees in light of the nature of the early termination
and a shortage of advertising space made available to the Company, and the
parties entered into an agreement as of May 28, 2002 resolving all of the
outstanding issues.

The agreed upon fee for the 2001 contract year has been settled with the CTA at
$17 million, substantially less than the original contracted guaranteed payment
of $21.8 million. As of May 31, 2002, approximately $7.5 million had been paid
to the CTA, and an additional $1.5 million was paid on June 1, 2002. The balance
is payable in substantially equal monthly payments of $116,080 beginning June
2002 and ending May 2007, with an additional $1.0 million balloon payment due in
January 2004. The monthly payments are without interest through May 2003, and
include a 5% interest charge thereafter. These periodic deferred payments have
been valued using a junior unsecured discount rate of 15%, resulting in a
present value of $6.0 million, which is included within long-term debt in our
balance sheet. The result is a present value of $15.1 for the settlement. The
cost of the settlement is covered by previous accruals, including an accrual
which the Company established in the third quarter of fiscal 2001.

Effective February 19, 2001 Obie entered into a new financing arrangement with
U.S. Bank. The arrangement provided for a $16.0 million term line maturing in
August of 2007, and a $6.0 million working capital line of credit available for
general purposes. These credit facilities are secured by substantially all of
the assets of Obie and its subsidiaries. Obie used the term revolver to
refinance all of its then-existing debt, including the previously outstanding
line of credit. Principal payments on the term revolver began in the third
quarter of fiscal 2002. As of November 30, 2002 we were not in compliance with
our operating covenants in our existing credit facility that relate to certain
financial ratios, and U.S. Bank has granted us a waiver of that non compliance.
On February 25, 2003 U.S. Bank and Obie agreed to a revised credit facility
which included a reduction in the working capital line of credit to $4.5
million, modified financial ratio covenants, and reduced principal payment
requirements during fiscal 2003. $1.5 million was available under the working
capital line of credit as of November 30, 2002. The revised agreement extends
the term of the credit facility through December 15, 2003 when both the term
revolver and working capital credit line expire. The credit facility requires
the execution and delivery of definitive transaction documentation and Obie's
continued compliance with the revised covenants.

Effective December 1, 2002 we formed a new wholly owned subsidiary, Select
Media, Inc. under which our national sales organization will operate.

SEASONALITY

Historically, Obie Media's revenues and operating results have fluctuated by
season. Typically, Obie's results of operations are strongest in the fourth
quarter and weakest in the first quarter of our fiscal year, which ends November
30. Obie's transit advertising operations are more seasonal than our outdoor
advertising operations as the outdoor advertising display space, unlike our
transit advertising display space, is and has been sold nearly exclusively by
means of 12-month contracts.
<PAGE>
Management believes the seasonality of our revenues and operating results will
increase if transit advertising operations continue to expand more rapidly than
our outdoor advertising operations. This seasonality, together with fluctuations
in general and regional economic conditions and the timing and expenses related
to acquisitions, securing new transit agreements and other actions we have taken
and plan to continue to take to implement our growth strategy, have contributed
to fluctuations in our periodic operating results. These fluctuations likely
will continue. Accordingly, results of operations in any period may not be
indicative of the results to be expected for any future period.

LIQUIDITY AND CAPITAL RESOURCES

Obie Media has historically satisfied its working capital requirements with cash
from operations and revolving credit borrowings. Obie's working capital at
November 30, 2001 and 2002 was $4.4 million and $7.2 million, respectively. The
increase in working capital is due primarily to (1) a decrease in accounts
receivable, due primarily to the exit from the Chicago market, (2) a reduction
in accrued transit fees because of the amount included in 2001 that related to
the Chicago settlement that has been recorded as long-term debt in 2002 in
accordance with the settlement agreement, (3) increased utilization of the
Company's working capital line of credit, and (4) an increase in the current
portion of long-term debt. Acquisitions and capital expenditures, primarily for
the construction of new outdoor advertising displays, digital printing equipment
and technology related assets, have been financed primarily with borrowed funds.

Obie Media's net cash provided by operating activities was $1.1 million during
fiscal 2002 as compared to net cash used in operating activities of $1.2 in
fiscal 2001. The change between periods was due primarily to a decrease in
accounts receivable and refundable income taxes.

Net cash used in investing activities was $1.2 million and $1.3 million in
fiscal 2002 and 2001, respectively. The decrease from fiscal 2001 to fiscal 2002
resulted primarily from a reduction of $430,000 in capital expenditures in
fiscal 2002 when compared to fiscal 2001, offset by the cost of acquiring the
minority interest in OB Walls, Inc. Capital expenditures consist primarily of
the cost of building and acquiring outdoor advertising displays and the cost of
digital printing equipment in both years. We anticipate that our capital
expenditures will approximate $600,000 in fiscal 2003.

Net cash provided by financing activities was $1.5 million and $2.3 million in
fiscal 2002 and 2001, respectively. The decrease was primarily the result of a
$1.1 million increase in payments on long term debt in fiscal 2002 as compared
to fiscal 2001.

Effective February 19, 2001 Obie entered into a new financing arrangement with
U.S. Bank. The arrangement provided for a $16.0 million term line maturing in
August of 2007, and a $6.0 million working capital line of credit available for
general purposes. These credit facilities are secured by substantially all of
the assets of Obie and its subsidiaries. Obie used the term revolver to
refinance all of its then-existing debt, including the previously outstanding
line of credit. Principal payments on the term revolver began in the third
quarter of fiscal 2002. As of November 30, 2002 we were not in compliance with
our operating covenants in our existing credit facility that relate to certain
financial ratios, and U.S. Bank has granted us a waiver of that non compliance.
On February 25th, 2003 U.S. Bank and Obie agreed to a revised credit facility
which included a reduction in the working capital line of credit to $4.5
million, modified financial ratio covenants and a reduction of principal payment
requirements for fiscal 2003. $1.5 million was available under the working
capital line of credit as of November 30, 2002. The revised agreement extends
the term of the credit facility through December 15, 2003 when both the term
revolver and working capital credit line expire. The credit facility requires
the execution and delivery of definitive transaction documentation and Obie's
continued compliance with the revised covenants. Management can provide no
assurances that U.S. Bank will continue to renew our credit arrangements as they
expire. (See "Recent Developments" above.)
<PAGE>
At November 30, 2002 Obie Media had outstanding borrowings of $23.5 million, of
which $17.4 million was pursuant to the credit agreements with US Bank described
above, $5.8 million pursuant to the Chicago Transit Authority settlement,
$225,000 for the acquisition of the minority interest in OB Walls, Inc., and
$81,000 pursuant to the agreement to acquire P & C.

We expect to continue pursuing a policy of measured growth through obtaining new
transit district agreements, acquiring out-of-home advertising companies or
assets and constructing new outdoor advertising displays. We intend to finance
our future expansion activities using a combination of internal and external
sources. Management believes that internally generated funds and funds available
for borrowing under Obie's bank credit facilities will be sufficient to satisfy
all debt service obligations, to finance existing operations, including
anticipated capital expenditures but excluding possible acquisitions, through
fiscal 2003. Future acquisitions by Obie Media, if any, may require additional
debt or equity financing.

LONG-TERM FINANCIAL OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS

Our significant long-term contractual obligations as of November 30, 2002 are as
follows:
<TABLE>
<CAPTION>
                                    Cash payments during the fiscal years ended November 30 (in thousands)
-------------------------------- -------------- ------------ ------------- ------------- --------------- --------------
Description of Commitment            2003          2004          2005          2006           2007        Thereafter
-------------------------------- -------------- ------------ ------------- ------------- --------------- --------------
<S>                                 <C>           <C>           <C>           <C>            <C>          <C>
Transit guaranteed minimum          $17,164       $15,417       $10,670       $5,448         $3,645       $       __
payments
-------------------------------- -------------- ------------ ------------- ------------- --------------- --------------
Chicago Transit Authority
settlement                            1,550         2,609        1,535         1,466            707               __
-------------------------------- -------------- ------------ ------------- ------------- --------------- --------------
Building and land leases
                                      2,182         1,803        1,583         1,310            474              691
-------------------------------- -------------- ------------ ------------- ------------- --------------- --------------
Bank term loan                        2,000        12,400           __            __             __               __
-------------------------------- -------------- ------------ ------------- ------------- --------------- --------------
</TABLE>

MARKET RISK

Because our debt bears interest at variable rates, we may be exposed to future
interest rate changes on our debt. Management does not believe that a
hypothetical 10 percent change in end of period interest rates would have a
material effect on Obie's cash flow.

THE EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS.

In June 2000 the FASB issued Statement of Financial Accounting Standards N0.
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities - an amendment of FASB No. 133" ("SFAS 138"). In June 1999, the FASB
issued Statement of Financial Accounting Standards N0. 137 - "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 137"). SFAS 137 is an
amendment to Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities". SFAS 133 and 138 establish
accounting and reporting standards for all derivative instruments. SFAS 133 and
138 are effective for fiscal years beginning after June 15, 2000. Obie adopted
SFAS 133 and 138 for its fiscal year beginning December 1, 2000. Obie does not
currently have any derivative instruments nor does it participate in hedging
activities, and therefore the adoption of these standards did not have any
impact on its financial statements or results of operations.
<PAGE>
On June 30, 2001, the FASB issued SFAS 142, "Goodwill and Other Intangible
Assets," which eliminates the amortization of goodwill and other acquired
intangible assets with indefinite economic useful lives. SFAS 142 is effective
for fiscal years beginning after December 15, 2001. Obie adopted SFAS 142
effective December 1, 2002.

As of November 30, 2002 Obie had net unamortized goodwill in the amount of $5.4
million. SFAS 142 requires that goodwill be tested annually for impairment using
a two-step process. The first step is to identify a potential impairment and, in
transition, this step must be measured as of the beginning of the fiscal year.
However, a company has six months from the date of adoption to complete this
first step. Obie expects to complete that first step of the goodwill impairment
testing during the first quarter of the year ending November 30, 2003 (fiscal
year 2003). The second step of the goodwill impairment test measures the amount
of impairment loss (measured as of the beginning of the year of adoption), if
any, and must be completed by the end of the Company's fiscal year. Any
impairment loss resulting from the transitional impairment tests will be
reflected as the cumulative effect of a change in accounting principle in the
first quarter of fiscal year 2003. The Company does not believe that the effect
of these impairment tests will have a material effect on the Company's earnings
and financial position.

On October 3, 2001, the FASB issued Statement of Financial Accounting Standards
No. 144 ("SFAS No. 144"), "Accounting for the Impairment or Disposal of
Long-Lived Assets". SFAS No. 144 supercedes Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of". SFAS No. 144 applies to all long-lived
assets (including discontinued operations) and consequently amends Accounting
Principles Board Opinion No. 30, "Reporting Results of Operations -- Reporting
the Effects of Disposal of a Segment of a Business". SFAS No. 144 develops one
accounting model for long-lived assets that are to be disposed of by sale. SFAS
No. 144 requires that long-lived assets that are to be disposed of by sale be
measured at the lower of book value or fair value less the cost to sell. SFAS
144 is effective for fiscal years beginning after December 15, 2001, however,
earlier adoption is permitted. The Company early adopted the provisions of SFAS
No. 144 in Fiscal 2002 and has recorded the results of operations from transit
markets that it has exited as discontinued operations.

On June 28, 2002, the FASB adopted Statement of Financial Accounting Standards
No. 146 ("SFAS 146"), "Accounting for Exit or Disposal Activities", effective
for exit or disposal activities that are initiated after December 31, 2002, with
early application encouraged. SFAS 146 addresses significant issues regarding
the recognition, measurement, and reporting of costs that are associated with
exit and disposal activities, including restructuring activities that are
currently accounted for pursuant to the guidance that the Emerging Issues Task
Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)". The Company early
adopted the provisions of SFAS No. 146 in Fiscal 2002 and has recorded exit
costs relating to contract terminations resulting from its exit of certain
transit markets in accordance with the provisions of SFAS 146. These costs have
been recorded as a component of discontinued operations in accordance with SFAS
144.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, ("SFAS No. 148"), "Accounting for Stock-Based Compensation - Transition
and Disclosure - an amendment of FAS 123." SFAS No. 148 amends Statement of
Financial Accounting Standards No. 123, ("SFAS No. 123") "Accounting for
Stock-Based Compensation", to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures about the method
of accounting for stock-based employee compensation and the effect of the method
used on reported results. Finally, SFAS No.148 amends APB Opinion No. 28,
"Interim Financial Reporting," to require disclosure about those effects in
interim financial information. The amendments to the transition and disclosure
provisions is effective for fiscal years ending after December 15, 2002. The
amendment to Opinion 28 is effective for financial reports containing condensed
financial statements for interim periods beginning after December 15, 2002. We
are currently evaluating the impact of SFAS No. 148. We will adopt the
disclosure provisions of SFAS No. 148 in our Form 10-Q for the quarter ending
May 31, 2003 and in our Annual Report on Form 10-K for the year ending November
30, 2003.
<PAGE>
ITEM 8.  FINANCIAL STATEMENTS

The financial statements and supplementary data required by this item are
included on pages F-1 to F-16 of this Annual Report. Unaudited quarterly data
for each of the eight quarterly periods in the years ended November 30, 2002 and
2001 is as follows:
<TABLE>
<CAPTION>
In thousands, except per share data:
                                        1st Quarter             2nd Quarter             3rd Quarter             4th Quarter
                                   As                      As                      As                      As
                                   Previously  As          Previously  As          Previously  As          Previously  As
                                   Reported    Restated    Reported    Restated    Reported    Restated    Reported    Restated
2002:                              ----------- ---------   ----------- ---------   ----------- ---------   ----------- ---------
<S>                                <C>         <C>         <C>         <C>         <C>         <C>          <C>        <C>
Net revenues                       $ 10,129    $   9,774   $ 11,329    $ 11,013    $ 12,076    $ 11,607           --   $12,365
Operating income (loss)              (1,205)        (916)      (205)        110         642         765           --       992
Income (loss) from
discontinued operations                  --         (289)        --        (315)         --        (124)          --      (515)
Net income (loss)                    (1,521)      (1,521)      (521)       (521)         22          22           --         3
Basic/diluted income (loss) per share:
     Continuing operations               --    $   (0.21)        --    $   (0.04)        --    $    0.02          --   $  0.09
     Discontinued operations             --    $   (0.05)        --    $   (0.05)        --    $   (0.02)         --   $ (0.09)
     Net income (loss)             $  (0.26)   $   (0.26)  $  (0.09)   $   (0.09)  $  (0.00)   $    0.00               $  0.00

2001:
Net revenues                       $ 11,724    $   9,712   $ 15,923    $  10,324   $ 18,737    $  10,653     $13,899   $12,885
Operating income (loss)              (1,066)        (496)       (24)        (742)    (7,260)      (2,237)        423       555
Income (loss) from
discontinued operations                  --           --         --          446         --       (3,961)         --       (61)
Net income (loss)                      (800)        (800)      (249)        (249)    (5,961)      (5,961)       (238)     (238)
Basic/diluted income (loss) per share:
     Continuing operations               --    $   (0.08)        --    $   (0.12)        --    $   (0.34)         --  $   (0.03)
     Discontinued operations             --    $   (0.06)        --    $    0.08         --    $   (0.67)         --  $   (0.01)
     Net income (loss)             $  (0.14)   $   (0.14)  $  (0.04)   $   (0.04)  $  (1.01)   $   (1.01)    $ (0.04) $   (0.04)
</TABLE>

See footnote 1. to the consolidated financial statements regarding the cause for
the above restatements.


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

The has been no change in the Company's auditors, and there are no disagreements
with the auditors on accounting or financial disclosure matters.















<PAGE>
PART 3.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Information with respect to directors and executive officers is included under
"Election of Directors" and "Executive Officers" in Obie's definitive proxy
statement for its 2003 Annual Meeting of Shareholders to be filed not later than
120 days after the end of the fiscal year covered by this Annual Report, and
when so filed such information is incorporated herein by reference.

Information with respect to Section 16(a) of the Securities Exchange Act is
included under "Compliance with Section 16(a) of the Securities Exchange Act" in
Obie's definitive proxy statement for its 2003 Annual Meeting of Shareholders to
be filed not later than 120 days after the end of the fiscal year covered by
this Annual Report, and when so filed such information is incorporated herein by
reference.

ITEM 11.  EXECUTIVE COMPENSATION

Information with respect to executive compensation is included under "Executive
Compensation" in Obie's definitive proxy statement for its 2003 Annual Meeting
of Shareholders to be filed not later than 120 days after the end of the fiscal
year covered by this Annual Report, and when so filed such information is
incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information with respect to security ownership of certain beneficial owners and
management is included under "Principal Shareholders and Management Ownership"
in Obie's definitive proxy statement for its 2003 Annual Meeting of Shareholders
to be filed not later than 120 days after the end of the fiscal year covered by
this Annual Report, and when so filed such information is incorporated herein by
reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information with respect to certain relationships and related party transactions
is included under "Certain Transactions" in Obie's definitive proxy statement
for its 2003 Annual Meeting of Shareholders to be filed not later than 120 days
after the end of the fiscal year covered by this Annual Report, and when so
filed such information is incorporated herein by reference.

ITEM 14.  CONTROLS AND PROCEDURES

Within the 90-days prior to the filing of this Annual Report on Form 10-K, we
carried out an evaluation, under the supervision and with the participation of
our Chief Executive Officer and Chief Financial Officer of the effectiveness of
the design and operation of our disclosure controls and procedures. Based on
this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information required to be included in this Annual
Report on Form 10-K.






<PAGE>
There have been no significant changes in our internal controls or in other
factors which could significantly affect internal controls subsequent to our
most recent evaluation of our internal controls

PART IV

ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K

(a)(1) Financial Statements. The Financial Statements are listed in the Index to
Consolidated Financial Statements on page F-1 of this Annual Report.
(a)(2) Exhibits:
       Exhibit Description
3.1    Restated Articles of Incorporation, as amended (1)
3.2    Restated Bylaws, as amended (1)
4.1    See Articles 3, 4 and 8 of Exhibit 3.1 and Articles 1, 2, 5, 6 and 7 of
       Exhibit 3.2
10.1*  Restated 1996 Stock Incentive Plan (4)
10.2   Form of Indemnification Agreement between Obie and its directors (4)
10.3   Form of Indemnification Agreement between Obie and its officers (4)
10.4   Lease between Obie Industries Incorporated and Obie, dated November 12,
       1996 (1)
10.5   Amendment, dated July 15, 1997, to lease agreement between Obie
       Industries Incorporated and Obie (2)
10.6   Restated and Amended Loan Agreement, dated as of September 1, 1998, among
       Obie, Obie Media Limited, Philbin & Coine, Inc., and U.S. Bank National
       Association, and related documents (4)
10.7   Amendment to Loan Agreement, dated January 3, 2000 (7)
10.8   Stock Purchase Agreement among Registrant and Philbin & Coine, Inc. and
       Wayne P. Schur dated August 25, 1998 (3)
10.9*  Employment Agreement, dated September 1, 1998, between Obie and Wayne P.
       Schur (4)
10.10* Amendment to Wayne P. Schur employment agreement (7)
10.11* Non-Qualified Stock Option Agreement, dated September 1, 1998, between
       Obie and Wayne P. Schur(4)
10.12  Settlement Offer Letter dated September 25, 1998 from Tri-County
       Metropolitan Transportation District of Oregon to Registrant, signed by
       the Registrant indicating acceptance (5)
Portions of the Definitive Proxy Statement for the 2001 Annual Meeting of
Shareholders to be held on April 27, 2001 (6)
21.1   List of subsidiaries (4)
23.1   Consent of PricewaterhouseCoopers LLP, Independent Public Accountants
99.1   Certification by Gary F. Livesay pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002
99.2   Certification by Brian B. Obie pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002
*Management Contract or Compensatory Plan or Arrangement.
(1)    Incorporated herein by reference from Obie's Registration Statement on
       Form SB-2 (Registration No. 333-5728-LA), declared effective on November
       21, 1996.
(2)    Incorporated by reference to Obie's Annual Report on Form 10-KSB for the
       year ended November 30, 1997 filed February 27, 1998.
(3)    Incorporated by reference to Obie's Form 8-K filed September 14, 1998.
(4)    Incorporated by reference to Obie's Annual Report on Form 10-KSB for the
       year ended November 30, 1998 filed March 1, 1999.
(5)    Incorporated by reference to Obie's Registration Statement on Form S-1
       (Registration No. 333-79367), declared effective on August 10, 1999.
(6)    To be filed with the Securities and Exchange Commission within 120 days
       after the end of the fiscal year covered by this report.
(7)    Incorporated by reference to Obie's Annual Report on Form 10-KSB for the
       year ended November 30, 2001 filed February 27, 2002.
<PAGE>
Upon written request to Brian B. Obie, CEO and President of Obie Media
Corporation, 4211 West 11th Avenue, Eugene, OR 97402, shareholders will be
furnished a copy of any exhibit, upon payment of $.25 per page, which represents
Obie's reasonable expense in furnishing the exhibit requested.

(b)      Reports on Form 8-K. Obie Media filed one report on Form 8-K during the
         2002 fiscal year. That report was filed on December 6, 2001 announcing
         the termination of its advertising contract with the Chicago Transit
         Authority.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

OBIE MEDIA CORPORATION

Dated:   February 28, 2003      By /s/ BRIAN B. OBIE
                                Brian B. Obie, Chairman, President and Chief
                                Executive Officer


In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

                                    PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR:

Dated:   February 28, 2003      By /s/ BRIAN B. OBIE
                                Brian B. Obie, Chairman, President and Chief
                                Executive Officer

PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:

Dated:   February 28, 2003      By /s/ GARY F. LIVESAY
                                Gary F. Livesay, Chief Financial Officer

                                    DIRECTORS:

Dated:   February 28, 2003      By /s/ DELORES M. MORD
                                Delores M. Mord, Director

Dated:   February 28, 2003      By /s/ RANDALL C. PAPE
                                Randall C. Pape, Director

Dated:   February 28, 2003      By /s/ STEPHEN A. WENDELL
                                Stephen A. Wendell, Director

Dated:   February 28, 2003      By /s/ RICHARD C. WILLIAMS
                                Richard C. Williams, Director








<PAGE>
                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gary F. Livesay, certify that:

1. I have reviewed this annual report on Form 10-K of Obie Media Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this annual
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: February 27, 2003

                             By: /s/ GARY F. LIVESAY
                             Vice President
                             Chief Financial Officer
<PAGE>
                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brian B. Obie, certify that:

1. I have reviewed this annual report on Form 10-K of Obie Media Corporation;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this annual
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: February 27, 2003

                             By: /s/ BRIAN B. OBIE
                             President
                             Chief Executive Officer
<PAGE>
EXHIBIT INDEX

Exhibit*
23.1   Consent of PricewaterhouseCoopers LLP, Independent Public Accountants,
       for the year ending November 30, 2002
99.1   Certification of Gary F. Livesay pursuant to Section 906 of the
       Sarbanes-Oxly Act of 2002
99.2   Certification by Bian B. Obie pursuant to Section 906 of the
       Sarbanes-Oxly Act of 2002

o      See Item 14(a)(2) of this Annual Report for a list of all exhibits,
       including those incorporated by reference.















































<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference in Registration Statement on
Form S-8 (N0. 333-48447) of Obie Media Corporation of our report dated February
27, 2003 relating to the financial statements which appear in this Form 10-K.


                            /s/ PricewaterhouseCoopers
Portland, Oregon
February 27, 2003

















































<PAGE>
                             Exhibits 99.1 and 99.2

                            CERTIFICATION PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Obie Media Corporation (the Company ) on
Form 10K for the fiscal year ended November 30, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the Report ), I, Gary F.
Livesay, Vice President and Chief Financial Officer, certify, pursuant to 18
U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes Oxley Act of 2002, that
to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.


By: /s/ GARY F. LIVESAY
        Vice President
        Chief Financial Officer


In connection with the Annual Report of Obie Media Corporation (the Company ) on
Form 10K for the fiscal year ended November 30, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the Report ), I, Brian B.
Obie, President and Chief Executive Officer, certify, pursuant to 18 U.S.C.
1350, as adopted pursuant to 906 of the Sarbanes Oxley Act of 2002, that to the
best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.


By: /s/ BRIAN B. OBIE
        President
        Chief Executive Officer

















<PAGE>
OBIE MEDIA CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Accountants                                          F-2

Report of Prior Independent Accountants                                    F-2a

Consolidated Balance Sheet as of November 30, 2002 and 2001                F-3

Consolidated Statement of Operations for the years ended
          November 30, 2002, 2001 and 2000                                 F-4

Consolidated Statement of Changes on Shareholders' Equity
          for the years ended November 30, 2002, 2001 and 2000             F-5

Consolidated Statement of Cash Flows for the years ended
          November 30, 2002, 2001 and 2000                                 F-6

Notes to Consolidated Financial Statements                                 F-7








































<PAGE>
Report of Independent Accountants

To the Board of Directors and Shareholders
of Obie Media Corporation:

In our opinion, the accompanying consolidated balance sheets as of November 30,
2002 and 2001 and the related consolidated statements of operations, changes in
shareholders' equity, and of cash flows present fairly, in all material
respects, the financial position of Obie Media Corporation and its subsidiaries
at November 30, 2002, and the results of their operations and their cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion. The
financial statements of the Company as of and for the year ended November 30,
2000 were audited by other independent accountants whose report dated February
19, 2001 expressed an unqualified opinion on those statements.

As discussed in Note 1 to the consolidated financial statements, the Company
adopted the provisions of Statements of Financial Accounting Standards No. 144
and No. 146, "Accounting for the Impairment of Long-lived Assets," and
"Accounting for Costs Associated with Exit or Disposal Activities," on December
1, 2001. As further discussed in Notes 5 and 11 to the consolidated financial
statements, the Company's credit accomodations of $17.4 million with its current
lender expire on December 15, 2003.


PricewaterhouseCoopers LLP

February 27, 2003
Portland, Oregon

                                       F-2




















<PAGE>
Report of Independent Public Accountants

To the Board of Directors and Shareholders
of Obie Media Corporation:

We have audited the accompanying consolidated balance sheets of Obie Media
Corporation (an Oregon corporation) and subsidiaries as of November 30, 2000 and
1999, and the related consolidated statements of income, changes in
shareholders' equity and cash flows for each of the three years in the period
ended November 30, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Obie Media Corporation and
subsidiaries as of November 30, 2000 and 1999, and the results of their
operations and their cash flows for each of the three years in the period ended
November 30, 2000 in conformity with accounting principles generally accepted in
the United States.


                               ARTHUR ANDERSEN LLP
                               /s/ Arthur Andersen LLP


Portland, Oregon
February 19, 2001

NOTE:  The above report of Arthur Andersen LLP has been previously obtained and
has not been reissued by Arthur Andersen LLP.



















                                      F-2a
<PAGE>
OBIE MEDIA CORPORATION
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 30, 2002 AND 2001
                                                                                              2002           2001
                                                                                       -------------------------------
<S>                                                                                        <C>               <C>
ASSETS
CURRENT ASSETS
          Cash                                                                             $1,815,886        $404,473
          Accounts receivable, net of allowance for doubtful accounts
            of $1,938,537 and $1,944,921 respectively                                       7,327,681      11,828,554
          Refundable income taxes                                                             121,055       1,881,041
          Prepaid expenses and other current assets                                         4,869,804       5,155,385
          Deferred income taxes                                                             1,732,395       1,781,671
                                                                                       -------------------------------
                                                                                           15,886,821      21,051,124
                                                                                       -------------------------------

PROPERTY AND EQUIPMENT, net                                                                15,864,193      16,603,760

OTHER ASSETS
          Goodwill, net                                                                     5,448,552       5,683,805
          Other assets, net                                                                   947,322         822,548
                                                                                       -------------------------------
                                                                                          $38,126,888     $44,161,237
                                                                                       -------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITES
          Current portion of long-term debt                                                $2,847,311        $340,418
          Line of credit                                                                    2,980,483       1,697,117
          Accounts payable                                                                    283,075       1,202,133
          Accrued transit fees                                                              1,102,519      11,223,678
          Accrued expenses                                                                    737,698         668,740
          Income taxes payable                                                                      -         286,197
          Unearned revenue                                                                    767,637       1,218,088
                                                                                       -------------------------------
                     Total current liabilities                                              8,718,723      16,636,371

DEFERRED INCOME TAXES                                                                       1,573,729       1,461,432

LONG TERM DEBT, less current portion                                                       17,707,306      13,881,200
                                                                                       -------------------------------
                                                                                           27,999,758      31,979,003

MINORITY INTEREST IN SUBSIDIARY                                                                     -          32,899

COMMITMENTS  AND CONTINGENCIES(Note 8)

SHAREHOLDERS' EQUITY
          Preferred stock, without par value, 10,000,000 shares
            Authorized, no shares issued and outstanding                                            -               -




<PAGE>
          Common stock, without par value, 20,000,000 shares
            authorized, 5,908,577 shares issued
            and outstanding                                                                17,272,128      17,272,128
          Other comprehensive income                                                            5,350          11,028
          Accumulated deficit                                                             (7,150,348)     (5,133,821)
                                                                                       -------------------------------
                     Total shareholders' equity                                            10,127,130      12,149,335
                                                                                       -------------------------------
                                                                                          $38,126,888     $44,161,237
                                                                                       -------------------------------
</TABLE>

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

                                       F-3











































<PAGE>
OBIE MEDIA CORPORATION
<TABLE>
<CAPTION>
Consolidated Statements of Operations
For the Years Ended November 30, 2002, 2001 and 2000
                                                                             2002           2001           2000
                                                                        ----------------------------------------------
<S>                                                                        <C>             <C>             <C>
REVENUES:
       Outdoor advertising                                                 $ 6,735,537     $6,732,336      $6,294,914
       Transit advertising                                                  38,023,459     36,841,683      42,009,339
                                                                        ----------------------------------------------
                     Net revenues                                           44,758,996     43,574,019      48,304,253

OPERATING EXPENSES:
       Production and Installation                                           6,556,985      6,445,133       6,398,939
       Occupancy                                                            18,558,670     20,410,976      21,871,217
       Sales                                                                 8,609,133      8,353,125       7,338,947
       General and administrative                                            7,900,815      9,207,872       6,882,450
       Depreciation and amortization                                         2,181,490      2,077,365       1,870,630
       Start-up costs                                                                -              -         115,632
                                                                        ----------------------------------------------
                     Operating income (loss)                                   951,903    (2,920,452)       3,826,438

INTEREST EXPENSE                                                             1,724,994      1,337,136       1,120,976
                                                                        ----------------------------------------------

INCOME (LOSS) FROM CONTINUING OPERATIONS
   BEFORE INCOME TAXES                                                       (773,091)    (4,257,588)       2,705,462

PROVISION FOR (BENEFIT FROM) INCOME TAXES                                       -           (923,957)       1,087,218
                                                                        ----------------------------------------------

                                                                        ----------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS                                     (773,091)    (3,333,631)       1,618,244
                                                                        ----------------------------------------------
DISCONTINUED OPERATIONS (NOTE 1 )
   INCOME (LOSS) FROM DISCONTINUED OPERATIONS                              (1,243,436)    (5,006,084)               -
   INCOME TAX EXPENSE (BENEFIT)                                                      -    (1,091,327)               -
                                                                        ----------------------------------------------
   INCOME (LOSS) ON DISCONTINUED OPERATIONS                                (1,243,436)    (3,914,757)               -
                                                                        ----------------------------------------------
NET INCOME           (LOSS)                                               ($2,016,527)   ($7,248,388)      $1,618,244
                                                                        ----------------------------------------------

BASIC NET INCOME (LOSS) PER SHARE:
   INCOME (LOSS) FROM CONTINUING OPERATIONS                                  $  (0.13)      $  (0.57)        $   0.27
   LOSS FROM DISCONTINUED OPERATIONS                                         $  (0.21)         (0.66)               -

NET INCOME (LOSS) PER SHARE                                                  $  (0.34)      $  (1.23)        $   0.27









<PAGE>
DILUTED NET INCOME (LOSS) PER SHARE:
   INCOME (LOSS) FROM CONTINUING OPERATIONS                                  $  (0.13)      $  (0.57)        $   0.27
   LOSS FROM DISCONTINUED OPERATIONS                                            (0.21)         (0.66)               -

NET INCOME (LOSS) PER SHARE                                                  $  (0.34)      $  (1.23)        $   0.27
</TABLE>



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

                                       F-4















































<PAGE>
OBIE MEDIA CORPORATION
<TABLE>
<CAPTION>
Consolidated Statements of Changes in Shareholders' Equity
For the Years Ended November 30, 2002, 2001 and 2000

                                                                                      Cumulative      Retained
                                                                                        Other         Earnings
                                               Common Stock               Note      Comprehensive   (Accumulated
                                          Shares         Amount        Receivable        Loss         Deficit)          Total
                                       --------------------------------------------------------------------------------------------
<S>                                       <C>           <C>                     <C>        <C>           <C>          <C>
BALANCE, November 30, 1999                 5,855,244     $16,869,413             $0         ($993)        $496,323     $17,364,743
Issuance of common stock for
  benefit plan and option exercises           41,060         250,880        (59,895)                                       190,985
Additional expenses of public offering                        (1,837)                                                       (1,837)
Purchase of fractional shares                    (72)           (763)                                                         (763)
Foreign currency translation                                                               (1,210)                          (1,210)
Income tax benefit of nonqualified
  stock option exercise                                       54,435                                                        54,435
Net income                                                                                               1,618,244       1,618,244
                                       --------------------------------------------------------------------------------------------
BALANCE, November 30, 2000                 5,896,232      17,172,128        (59,895)       (2,203)       2,114,567      19,224,597
Issuance of common stock for
  benefit plan and option exercises           12,345         100,000                                                       100,000
Collection of note receivable                                                59,895                                         59,895
Foreign currency translation                                                                13,231                          13,231
Net (loss)                                                                                              (7,248,388)     (7,248,388)

                                       --------------------------------------------------------------------------------------------
BALANCE, November 30, 2001                 5,908,577     $17,272,128             $0        $11,028     ($5,133,821)    $12,149,335

Foreign currency translation                                                                (5,678)                         (5,678)
Net (loss)                                                                                              (2,016,527)     (2,016,527)

                                       --------------------------------------------------------------------------------------------
BALANCE, November 30, 2002                 5,908,577     $17,272,128             $0         $5,350     ($7,150,348)    $10,127,130
                                       --------------------------------------------------------------------------------------------
</TABLE>















The accompany notes are an integral part of these consolidated financial
statements.
                                       F-5


<PAGE>
OBIE MEDIA CORPORATION
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows
For the Years Ended November 30, 2002, 2001 and 2000
                                                                                      2002           2001            2000
                                                                                 -----------------------------------------------
<S>                                                                                <C>             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITES:
Net income (loss)                                                                  ($2,016,527)    ($7,248,388)      $1,618,244
Adjustments to reconciled net income to net cash provided
  by operating activities:
          Depreciation and amortization                                               2,181,490       2,077,365       1,870,630
          Provision for transit contract losses                                                       6,007,233
          Deferred income taxes                                                         161,573     (1,261,373)         905,154
          Income tax benefit of nonqualified stock option exercises                                                      54,435
          Change in assets and liabilities:
                (Increase) decrease in:
                     Accounts receivable                                              4,500,873     (2,554,872)     (1,255,233)
                     Refundable income taxes                                          1,759,986     (1,881,041)
                     Prepaid expenses and other assets                                  115,993         286,843     (2,462,717)
                Increase (decrease) in:
                     Accounts payable                                                 (919,058)         187,954          14,285
                     Accrued expenses                                               (3,956,853)       3,433,240       (370,616)
                     Unearned revenue                                                 (450,451)        (67,277)         371,105
                     Income taxes payable                                             (286,197)       (211,307)          53,588
                                                                                 -----------------------------------------------
            Net cash provided by (used in )operating activities                       1,090,829     (1,231,623)         798,875
                                                                                 -----------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITES:
Capital acquisitions, net                                                             (894,755)     (1,324,931)     (5,230,048)
Other investing activities                                                                              (2,525)        (30,769)
Purchase of minority interest in subsidiary                                           (300,000)
                                                                                 -----------------------------------------------
            Net cash used in investing activities                                   (1,194,755)     (1,327,456)     (5,260,817)
                                                                                 -----------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Costs to issue common stock                                                                                             (1,837)
Proceeds from issuance of common stock options                                                                           99,825
Net borrowings on line of credit                                                      1,283,366       1,697,117       2,705,717
Proceeds from long-term debt                                                          1,525,000         697,876       4,000,000
Net payments on long-term debt                                                      (1,287,349)       (139,200)     (1,739,381)
Proceeds from common stock note receivable                                                               59,895           (763)
                                                                                 -----------------------------------------------
            Net cash provided by financing activites                                  1,521,017       2,315,688       5,063,561
                                                                                 -----------------------------------------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                 (5,678)          13,231         (1,210)
                                                                                 -----------------------------------------------

NET INCREASE (DECREASE) IN CASH                                                       1,411,413       (230,160)         600,409

CASH, beginning of period                                                               404,473         634,633          34,224
                                                                                 -----------------------------------------------





<PAGE>
CASH, end of period                                                                  $1,815,886        $404,473        $634,633
                                                                                 -----------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Issuance of stock to employee benefit plan                                                             $100,000         $91,160
Issuance (reduction) of note payable for business acquisition                           225,000       (232,888)       (339,112)
Issuance of common stock for note receivable                                                                  -          59,895
Issuance of note payable for Chicago Transit Authority settlement                     6,095,348
Costs associated with financing activities                                              240,000               -               -
Interest capitalized                                                                                          -          12,895

CASH PAID FOR INTEREST                                                                1,687,022       1,336,029       1,042,172

CASH PAID FOR TAXES                                                                      69,084       1,315,626          74,305
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

                                       F-6









































<PAGE>
OBIE MEDIA CORPORATION

Notes to Consolidated Financial Statements
November 30, 2002,2001 and 2000

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

COMPANY

Obie Media Corporation (the Company) is a full service out-of-home advertising
company which markets advertising space primarily on transit vehicles and
outdoor advertising displays (billboards and wallscapes). At November 30, 2002,
the Company had 36 exclusive agreements with transit districts in the United
States and Canada to operate transit advertising displays. These transit
districts are located in, among other advertising markets: Dallas; Portland,
Oregon; Sacramento; Hartford; Ft. Lauderdale, St. Louis and Vancouver, British
Columbia. The Company also operates and generally owns advertising displays on
billboards and walls primarily located in Washington, Oregon, California,
Montana, Wyoming and Idaho.

BASIS OF PRESENTATION

The consolidated financial statements include the Company, its wholly owned
subsidiaries, Obie Media Limited, and OB Walls, Inc. All significant
inter-company accounts and transactions between the Company and its subsidiaries
have been eliminated in consolidation.

FOREIGN CURRENCY TRANSLATION

The financial statements of the Company's foreign subsidiary, Obie Media
Limited, are translated into United States dollars using exchange rates at the
balance sheet date for assets and liabilities, and average exchange rates for
the period for revenues and expenses. The effect of the foreign currency
translation was insignificant for the years ended November 30, 2002, 2001 and
2000.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Because of the uncertainty
inherent in these matters, actual results could differ from the estimates.
Certain of these estimates affect working capital account balances, including
the reserve for uncollectible accounts receivable and deferred income taxes. The
Company makes estimates in the preparation of its financial statements as of a
given date. However, since the Company's business cycle is relatively short,
actual results related to the estimates relative to uncollectible accounts
receivable are generally known within the six month period following the
financial statement date. Thus, these policies generally affect only the timing
of reported amounts across two to three quarters. The estimate of deferred tax
assets may affect reported amounts beyond that time period.

REVENUE RECOGNITION

The Company has contracts to provide advertising to its customers. Advertising
revenue is recognized ratably over the period the advertising is displayed.
Payments received and amounts billed for advertising revenue in advance of
display are deferred. Costs incurred for the production and installation of
displays for advertising, which are paid for by the customer ratably over the
term of the advertising contract, and are deferred and recognized as expense as
the related revenue is recognized over the life of the respective contracts.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of
credit risk consist principally of cash and accounts receivable. The Company
places its cash with high credit quality financial institutions. Concentrations
of credit risk with respect to accounts receivable are not significant due to
the large number of customers, and their dispersion across different industries
and geographic areas.
<PAGE>
At November 30, 2002, the Company had agreements with 36 transit districts.
Customers advertising on transit vehicles owned by the nine largest transit
districts, of Dallas; Portland, Oregon; Vancouver, British Columbia; St. Louis;
Sacramento; Ft. Lauderdale, Hartford, Milwaukee and Victoria, B.C. represented
approximately 50.0 percent of the Company's total net revenues from continuing
operations for the year ended November 30, 2002. No single advertising customer
represented 10 percent or more of the Company's revenues for any of the periods
presented in the accompanying financial statements.

Transit agreements range from one to five years and are subject to renewal
either at the discretion of the transit district or upon the mutual agreement of
the Company and the transit district. Generally, these agreements require the
Company to pay the transit district the greater of a percentage of the related
advertising revenues, net of the advertising production charges, or a guaranteed
minimum amount(Note 8).

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash, accounts receivable,
accounts payable, accrued expenses and debt instruments. At November 30, 2002
and 2001, the fair value of the Company's financial instruments are estimated to
be equal to their reported carrying value. The carrying value of long-term debt
approximates fair value. The resulting estimates of fair value require
subjective judgments and are approximations. Changes in the methodologies and
assumptions could significantly affect the estimates.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is provided on the
straight-line method over the estimated useful lives. Additions and
improvements, including interest incurred during construction, are capitalized.
Normal repairs and maintenance are expensed as incurred. The cost and
accumulated depreciation of assets sold or otherwise retired are removed from
the accounts and the resulting gain or loss is recognized.

GOODWILL AND OTHER LONG-LIVED ASSETS

On September 1, 1998 the Company acquired all of the outstanding stock of
Philbin & Coine, Inc., a New York corporation doing business as P & C Media (P &
C). Goodwill resulting from the P&C acquisition has been amortized over 15 years
using the straight-line method and is net of accumulated amortization of
$2,181,571 and $1,679,192 at November 30, 2002 and 2001, respectively. Pursuant
to Statement of Financial Accounting Standards (SFAS) Number 142, "Goodwill and
Other Intangible Assets", the Company will no longer amortize goodwill effective
December 1, 2002. The Company will test goodwill annually for impairment as
required by SFAS No. 142. Other long-lived assets are periodically evaluated
when facts and circumstances indicate that the value of such assets may be
impaired.

Other assets include loan costs, which are stated at cost and amortized over the
life of the loan.

INCOME TAXES

The Company uses the liability method to record deferred tax assets and
liabilities that are based on the difference between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes. These
temporary differences result from the use of different accounting methods for
financial statement and tax reporting purposes. The measurement of deferred tax
assets is reduced by a valuation allowance, if necessary, by the amount of any
tax benefits that, based upon available evidence, are not expected to be
realized.

SEGMENT INFORMATION

The Company operates in the single segment of out-of-home media.

EARNINGS PER SHARE

Basic earnings per share (EPS) and diluted EPS are computed using the methods
prescribed by Statement of Financial Accounting Standards (SFAS) No.
128,"Earnings per Share." Basic EPS is calculated using the weighted average
number of common shares outstanding for the period and diluted EPS is calculated
using the weighted average number of common shares and dilutive common
equivalent shares outstanding during the period if the effect is dilutive.
<PAGE>
Following is a reconciliation of basic EPS and diluted EPS:
<TABLE>
<CAPTION>
                                                                     Year Ended November 30, 2002
                                                              ----------------------------------------
                                                                                       Per Share
                                                                (Loss)         Shares          Amount
                                                              ----------     ----------      ---------
<S>                                                           <C>            <C>               <C>
Basic EPS-
   Loss attributable to common shareholders:
         From continuing operations                           $(773,091)     5,908,577         $(0.13)
         From discontinued operations                        (1,243,436)     5,908,577          (0.21)
Effect of dilutive Securities-
   Stock options                                                     -
                                                              ----------     ----------      ---------
Diluted EPS-
   Loss attributable to common shareholders                 $(2,016,527)     5,908,577         ($0.34)
                                                              ==========     ==========      =========


                                                                     Year Ended November 30, 2001
                                                              ---------------------------------------
                                                                                      Per Share
                                                                (Loss)         Shares         Amount
                                                              ----------     ----------      ---------
Basic EPS-
Loss attributable to common shareholders:
         From continuing operations                         $(3,393,785)     5,904,146         $(0.57)
         From discontinued operations                        (3,854,603)     5,904,146          (0.66)
Effect of dilutive Securities-
   Stock options                                                     -
                                                              ----------     ----------      ---------
Diluted EPS-
   Loss attributable to common shareholders                 $(7,248,388)     5,904,146         ($1.23)
                                                              ==========     ==========      =========


                                                                     Year Ended November 30, 2000
                                                              ----------------------------------------
                                                                                       Per Share
                                                                (Loss)         Shares          Amount
                                                              ----------     ----------      ---------
Basic EPS-
   Income available to common shareholders                   $1,618,244      5,884,666          $0.27
Effect of dilutive Securities-
   Stock options                                                     -          41,256
                                                              ----------     ----------
Diluted EPS-
   Income available to common shareholders                   $1,618,244      5,925,922          $0.27
                                                              ==========     ==========
</TABLE>


At November 30, 2002, 2001 and 2000, the Company had 670,181, 673,736 and
174,833 stock options outstanding, respectively, of the Company's common stock
that were not considered in the respective diluted EPS calculations since they
would have been antidilutive.

COMPREHENSIVE INCOME

In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" (SFAS
130). This statement establishes standards for reporting and displaying
comprehensive income and its components in a full set of general-purpose
financial statements. The objective of SFAS 130 is to report a measure of all
changes in equity of an enterprise that result from transactions and other
economic events of the period other than transactions
<PAGE>
with owners. The Company adopted SFAS 130 during the first quarter of fiscal
1999. Comprehensive income does not materially differ from currently reported
net income in the periods presented.

DISCONTINUED OPERATIONS

Effective during its fiscal year ending November 30, 2002, the Company adopted
Statements of Financial Accounting Standards No. 144 and No. 146 "Accounting for
the Impairment of Long-Lived Assets" (SFAS 144) and "Accounting for Costs
Associated with Exit or Disposal Activities" (SFAS 146).

Pursuant to these pronouncements, the Company has classified as "Discontinued
Operations" the results of operations and any exit costs associated with expired
or terminated transit district contracts during the year that were not renewed
with the Company. As a result, the Company exited these markets and has no
further involvement. The US transit districts included in Discontinued
Operations are: Chicago, San Antonio, Cincinnati, and Kitsap. The Canadian
transit districts included are: Pickering, Whitby, Cambridge and St. Catharines.
Results of operations for these transit districts for 2001 have been
reclassified to Discontinued Operations for comparability purposes. There were
no Discontinued Operations to report in fiscal 2000.

Net revenues and the components of net loss related to the discontinued
operations were a follows:

                                                     Years ended November 30
                                                        2002         2001
                                                     ----------   -----------
Net revenues                                         $1,601,226   $20,766,807
                                                     ==========   ===========
Loss from discontinued operations before
    Income taxes                                    $(1,243,436)  $(5,006,084)
Income tax benefit                                            -    (1,091,327)
                                                     ----------   -----------
Net loss from discontinued operations               $(1,243,436)  $(3,914,757)
                                                     ==========   ===========

NEW ACCOUNTING PRONOUNCEMENTS

On October 3, 2001, the FASB issued Statement of Financial Accounting Standards
No. 144 ("SFAS No. 144"), "Accounting for the Impairment or Disposal of
Long-Lived Assets". SFAS No. 144 supercedes Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of". SFAS No. 144 applies to all long-lived
assets (including discontinued operations) and consequently amends Accounting
Principles Board Opinion No. 30, "Reporting Results of Operations -- Reporting
the Effects of Disposal of a Segment of a Business". SFAS No. 144 develops one
accounting model for long-lived assets that are to be disposed of by sale. SFAS
No. 144 requires that long-lived assets that are to be disposed of by sale be
measured at the lower of book value or fair value less the cost to sell. SFAS
144 is effective for fiscal years beginning after December 15, 2001, however,
earlier adoption is permitted. The Company early adopted the provisions of SFAS
No. 144 in Fiscal 2002 and has recorded the results of operations from transit
markets that it has exited as discontinued operations.

On June 28, 2002, the FASB adopted Statement of Financial Accounting Standards
No. 146 ("SFAS 146"), "Accounting for Exit or Disposal Activities", effective
for exit or disposal activities that are initiated after December 31, 2002, with
early application encouraged. SFAS 146 addresses significant issues regarding
the recognition, measurement, and reporting of costs that are associated with
exit and disposal activities, including restructuring activities that are
currently accounted for pursuant to the guidance that the Emerging Issues Task
Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)". The Company early
adopted the provisions of SFAS No. 146 in Fiscal 2002 and has recorded exit
costs relating to contract terminations resulting from its exit of certain
transit markets in accordance with the provisions of SFAS 146. These costs have
been recorded as a component of discontinued operations in accordance with SFAS
144.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, ("SFAS No. 148"), "Accounting for Stock-Based Compensation - Transition
and Disclosure - an amendment of FAS 123." SFAS No. 148 amends Statement of
Financial Accounting Standards No. 123, ("SFAS No. 123") "Accounting for
Stock-
<PAGE>
Based Compensation", to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures about the method
of accounting for stock-based employee compensation and the effect of the method
used on reported results. Finally, SFAS No.148 amends APB Opinion No. 28,
"Interim Financial Reporting," to require disclosure about those effects in
interim financial information. The amendments to the transition and disclosure
provisions is effective for fiscal years ending after December 15, 2002. The
amendment to Opinion 28 is effective for financial reports containing condensed
financial statements for interim periods beginning after December 15, 2002. We
are currently evaluating the impact of SFAS No. 148. We will adopt the
disclosure provisions of SFAS No. 148 in our Form 10-Q for the quarter ending
May 31, 2003 and in our Annual Report on Form 10-K for the year ending November
30, 2003.

On June 30, 2001, the FASB issued SFAS 142, "Goodwill and Other Intangible
Assets," which eliminates the amortization of goodwill and other acquired
intangible assets with indefinite economic useful lives. SFAS 142 is effective
for fiscal years beginning after December 15, 2001. Obie adopted SFAS 142
effective December 1, 2002.

As of November 30, 2002 Obie had net unamortized goodwill in the amount of $5.4
million. SFAS 142 requires that goodwill be tested annually for impairment using
a two-step process. The first step is to identify a potential impairment and, in
transition, this step must be measured as of the beginning of the fiscal year.
However, a company has six months from the date of adoption to complete this
first step. Obie expects to complete that first step of the goodwill impairment
testing during the first quarter of the year ending November 30, 2003 (fiscal
year 2003). The second step of the goodwill impairment test measures the amount
of impairment loss (measured as of the beginning of the year of adoption), if
any, and must be completed by the end of the Company's fiscal year. Any
impairment loss resulting from the transitional impairment tests will be
reflected as the cumulative effect of a change in accounting principle in the
first quarter of fiscal year 2003. The Company does not believe that the effect
of these impairment tests will have a material effect on the Company's earnings
and financial position.

RECLASSIFICATIONS

Certain amounts previously reported in the 2001 and 2000 financial statements
have been reclassified to conform to the 2002 financial statement
classifications which had no impact on net income or shareholders'equity.

2.       CONTRACT TERMINATION

         On December 5, 2001 the Company received notice from the Chicago
Transit Authority (CTA) that it was terminating the Company's transit
advertising agreement effective as of that date. The Company and the CTA had
been disputing settlement of 2001 transit fees in light of the nature of the
early termination and a shortage of advertising space made available to the
Company, and the parties entered into an agreement effective May 28, 2002
resolving all of the outstanding issues.

         The agreed upon fee for the 2001 contract year was settled on May 28,
2002 at $17 million, substantially less than the original contracted guaranteed
payment of $21.8 million. As of May 31, 2002, approximately $7.5 million had
been paid to the CTA, and an additional $1.5 million was paid on June 1, 2002.
The balance is payable in substantially equal monthly payments of $116,080
beginning June 2002 and ending May 2007, with an additional $1.0 million balloon
payment due in January 2004. The monthly payments are without interest through
May 2003, and include a 5% interest charge thereafter. These periodic deferred
payments have been valued using a junior unsecured discount rate of 15%,
resulting in a present value of $6.1 million, which is included within long-term
debt in the accompanying balance sheet at November 30, 2002. The result is a
present value of $15.1 million for the settlement. The cost of the settlement is
covered by previous accruals, including an accrual which the Company established
in the third quarter of fiscal 2001.

3. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consist of the following:
<PAGE>
                                                          November 30,
                                                 ----------------------------
                                                      2002           2001
                                                 -------------  -------------

           Prepaid leases                              439,632        488,154
           Transit advertising production costs      2,378,529      2,645,093
           Transit fees                              1,449,686      1,362,130
             Other                                     601,957        660,008
                                                 -------------  -------------
                                                 $   4,869,804  $   5,155,385
                                                 =============  =============


4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:
                                              November 30,
                                     ------------------------------
                                          2002            2001       Asset Lives
                                     --------------  --------------  -----------
   Outdoor advertising structures    $   18,420,326  $   18,016,711     20 years
 Other equipment and leaseholds           6,907,458       6,467,524   5-20 years
                                     --------------  --------------
                                         25,327,784      24,484,235
      Less- Accumulated depreciation      9,463,591       7,880,475
                                     --------------  --------------
                                     $   15,864,193  $   16,603,760
                                     ==============  ==============

5. FINANCING ARRANGEMENTS

Long-term debt consists of the following:

                                                            November 30,
                                                     ---------------------------
                                                         2002           2001
Term loan with U.S. Bank National Association        ------------   ------------
   (U.S. Bank), with quarterly reducing
   availability, interest at prime rate plus 3%
   (7.5% at November 30, 2002); maximum available
   of $15,600,000 as of November 30, 2002; the
   loan is collateralized by substantially all of
   the Company's assets                               $14,400,000    $13,892,818
Note payable to former shareholder of P&C in
   monthly installments of $20,300 without
   interest due March, 2003                                81,200        324,800
Note payable plus interest at 8%                                           4,000
Note payable to former shareholder of OB Walls,
   with monthly payments of $5,284.13 including
   interest at 6% due November 2006; with collateral
   of OB Walls stock                                      225,000
Note payable to Chicago Transit Authority relating
   to settlement of contract termination. Monthly
   payments of $116,080 through May 2003, plus an
   additional 5% interest factor beginning in June of
   2003, with a balloon payment of $1,000,000 due
   January 2004. The entire obligation has been
   discounted using a 15% discount rate                 5,848,417
                                                     ------------   ------------
                                                       20,554,617     14,221,618
         Less- Current portion                          2,847,311        340,418
                                                     ------------   ------------
                                                      $17,707,306    $13,881,200

The term loan with U.S. Bank is due in full on December 15, 2003. The Company is
currently in discussions with other lenders to replace the loan under terms and
conditions typical in the media industry.
<PAGE>
The Company also has a $6,000,000 operating line of credit with U.S. Bank. The
interest rate is at U.S. Bank's prime rate plus 3% (7.5% percent at November 30,
2002) and the line is collateralized by receivables, equipment, inventory and
contract rights. The outstanding balance on this line of credit at November 30,
2002 was $2,980,483. The line of credit also expires on December 15, 2003 and
the company is in the process of identifying a replacement lender.

The aggregate principal payments due on the above debt subsequent to November
30, 2002, are:

       Fiscal Year Ending
         November 30,
       ------------------
        2003                 $2,847,311
        2004                 14,501,202
        2005                  1,207,740
        2006                  1,321,517
        2007                    676,847
                            -----------
                            $20,554,617
                            ===========

The US Bank loan agreements contain certain restrictive covenants and required
ratios. As of November 30, 2002 the Company was out of compliance with certain
of the ratios, and has received a waiver of such violations from the bank. On
February 25th, 2003 U.S. Bank and Obie agreed to a revised credit facility which
included a reduction in the working capital line of credit to $4.5 million,
modified financial ratio covenants and a reduction of principal payment
requirements for fiscal 2003. $1.5 million was available under the working
capital line of credit as of November 30, 2002. The revised agreement extends
the term of the credit facility through December 15, 2003 when both the term
revolver and working capital credit line expire. The credit facility requires
the execution and delivery of definitive transaction documentation and Obie's
continued compliance with the revised covenants.

6.  INCOME TAXES

The provision for income taxes for the years ended November 30, 2002, 2001 and
2000 was comprised of the following:
<TABLE>
<CAPTION>
                                                                   November 30,
                                                     ---------------------------------------
                                                         2002           2001        2000
                                                     -----------  ------------- ------------
<S>                                                  <C>              <C>       <C>
Provision for income taxes (benefit)
         Current                                     $ (161,455)      (753,911) $   182,064
         Deferred                                       161,455     (1,261,373)     905,154
                                                     -----------  ------------- ------------
                  Total provision (benefit)          $            $ (2,015,284) $ 1,087,218
                                                     ===========  ============= ============

The tax effects of temporary differences that give rise to deferred tax assets
and liabilities are as follows:

Current deferred tax assets:
   Deferred revenue                                  $   351,603  $     784,421 $  1,129,329
   Allowance for doubtful accounts                       636,526        735,504      239,361
   Accrued expenses and other                            106,803        261,756       92,576
   Net operating loss carryfoward                      2,198,146      1,096,677           -
   Valuation allowance                                (1,560,683)    (1,096,677)          -
                                                     -----------  ------------- ------------
        Total current deferred tax assets              1,732,395      1,781,681    1,461,266

Current deferred tax liabilities:
   Prepaid fees and other                                                         (1,042,008)
                                                     -----------  ------------- ------------
                  Net current deferred tax assets    $ 1,732,395  $   1,781,681      419,258
                                                     ===========  ============= ============
<PAGE>
Non-current deferred tax liabilities:
   Property and equipment                            $ 1,573,729  $   1,461,432 $  1,360,392
                                                     ===========  ============= ============
</TABLE>
The valuation allowance is related to deferred tax assets including net
operating loss carryovers of $5,314,552 which expire in 2021. Income tax expense
for the years ended November 30, 2002, 2001 and 2000 differs from the amounts
computed by applying the U.S. federal income tax rate of 34 percent to pretax
income, as follows:

                                                                 Year Ended
                                                                November 30,
                                                            -------------------
                                                            2002   2001    2000
                                                            ----   ----    ----
Statutory federal income tax rate                           34.0%  34.0%   34.0%
Changes in income taxes resulting from-
   State and local taxes, net of federal income tax benefit  3.5    1.8     4.4
   Net Operating Loss Valuation Allowance                   32.5)  (8.9)     -
   Other differences, net                                   (5.0)  (5.2)    1.8
                                                            ----   ----    ----
                  Actual income tax rate                     0.0%  21.7%   40.2%
                                                            ====   ====    ====

7. SHAREHOLDERS' EQUITY

The Company's Restated Articles of Incorporation authorize the issuance of up to
20,000,000 shares of common stock and 10,000,000 shares of preferred stock
issuable in a series (Preferred Stock).

PREFERRED STOCK

The Board of Directors is authorized, without further shareholder authorization,
to issue Preferred Stock in one or more series and to fix the terms and
provisions of each series, including dividend rights and preferences, conversion
rights, voting rights, redemption rights and rights on liquidation, including
preferences over common stock.

COMMON STOCK

Holders of common stock are entitled to one vote per share on all matters
requiring shareholder vote. Holders of common stock are entitled to receive
dividends when and as declared by the Board of Directors out of any funds
lawfully available therefor, and, in the event of liquidation or distribution of
assets, are entitled to participate ratably in the distribution of such assets
remaining after payment of liabilities, in each case subject to any preferential
rights granted to any series of Preferred Stock that may then be outstanding.

STOCK OPTIONS

On September 1, 1998, the Company granted non statutory stock options to the
former shareholder of P&C, as part of the acquisition of P&C (Note 1),
exercisable for 151,250 shares of the Company's common stock. Additionally, as
part of the acquisition, the Company granted non statutory stock options to the
legal counsel of the P&C shareholder exercisable for 12,100 shares of the
Company's common stock. Of the 163,350 stock options granted, 24,200 were
exercisable on the date of grant at an exercise price of $7.20 per share, and
were included in the purchase price for the acquisition of P&C. The remaining
139,150 options granted to the former shareholder of P&C became fully vested in
September 2001 in conjunction with his resignation from the Company.
<PAGE>
In addition, on October 2, 1996 (amended April 21, 2000), the Company's Board of
Directors and shareholders adopted the 1996 Stock Incentive Plan (the Plan),
which provides for the issuance of 399,300 shares of common stock pursuant to
Incentive Stock Options (ISOs), Nonqualified Stock Options (NSOs), stock bonuses
and stock sales to employees, directors and consultants of the Company. During
the year ended November 30, 2000, the Company reserved an additional 150,000
shares of the Company's common stock for the issuance of stock options under the
Plan, and an additional 100,000 shares in the year ended November 30, 2001. ISOs
may be issued only to employees of the Company and will have a maximum term of
ten years from the date of grant. NSO's have a maximum life of 15 years. The
exercise price for ISO's may not be less than 100% of the fair market value of
the common stock at the time of the grant, and the aggregate fair market value
(as determined at the time of the grant) of shares issuable upon the exercise of
ISOs for the first time in any one calendar year may not exceed $100,000. In the
case of ISOs granted to holders of more than 10% of the voting power of the
Company, the exercise price may not be less than 110% of the fair market value
of the common stock at the time of the grant, and the term of the option may not
exceed five years. NSOs may be granted at not less than 85% of the fair market
value of the common stock at the date of grant. Options become exercisable in
whole or in part from time to time as determined by the Board of Directors'
Compensation Committee, which administers the Plan. Activity under the Plan is
summarized as follows:

                                                                  Weighted
                                    Shares          Shares        Average
                                 Available for    Subject to      Exercise
                                    Grant          Options         Price
                                 ----------       ----------      --------
BALANCES, November 30, 1999         125,144          276,369         8.24
   Additional shares provided       150,000                -            -
   Adjustment for stock split        12,515
   Options granted                 (241,490)         241,490         9.29
   Options canceled                  58,429          (58,429)        9.42
   Options exercised                      -          (31,944)        5.00
                                 ----------       ----------
BALANCES, November 30, 2000         104,598          427,486         9.15
   Additional shares provided       100,000                -            -
   Options granted                 (118,833)         118,833         7.08
   Options canceled                  49,243          (49,243)        9.91
                                 ----------       ----------
BALANCES, November 30, 2001         135,008          497,076         8.59
    Options granted                (172,289)         172,289         3.78
Options cancelled                   162,534         (162,534)        8.62
                                 ----------       -----------
BALANCES, November 30, 2002         125,253          506,831         6.95
                                 ==========       ===========

STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 123

During 1995, the Financial Accounting Standards Board issued SFAS 123, which
defines a fair value based method of accounting for employee stock options and
similar equity instruments and encourages all entities to adopt that method of
accounting for all of their employee stock compensation plans. However, it also
allows an entity to continue to measure compensation cost for those plans using
the method of accounting prescribed by APB 25. Entities electing to continue to
use the accounting treatment in APB 25 must make pro forma disclosures of net
income and, if presented, earnings per share, as if the fair value based method
of accounting defined in SFAS 123 had been adopted.

The Company has elected to account for its stock-based compensation plans under
APB 25; however, the Company has computed, for pro forma disclosure purposes the
value of all options granted during the years ended November 30, 2002, 2001 and
2000 using the Black-Scholes option pricing model as prescribed by SFAS 123
using the following weighted average assumptions for grants:

                                        Year Ended November 30,
                                   ----------------------------------
                                    2002          2001         2000
                                   -------       -------      -------
Risk-free interest rate              4.9%         5.2%        6.250%
Expected dividend yield                0%           0%            0%
<PAGE>
Expected lives                     6 years       6 years      6 years
Expected volatility                81.48%        71.51%       66.43%

Using the Black-Scholes methodology, the total value of options granted during
the years ended November 30, 2002, 2001 and 2000 was $357,879, $567,565 and
$1,470,878 respectively, which would be amortized on a pro forma basis over the
vesting period of the options (typically five years). The weighted average per
share fair value of options granted during the years ended November 30, 2002,
2001 and 2000 was $2.08, $4.78 and $6.09, respectively. If the Company had
accounted for its stock-based compensation plans in accordance with SFAS 123,
the Company's net income (loss) and net income (loss) per share would
approximate the proforma disclosures below:
<TABLE>
<CAPTION>
                                               Year Ended November 30,
                      -----------------------------------------------------------------------
                                2002                     2001                   2000
                      ----------------------   ----------------------  ----------------------
                          As                         As                       As
                       Reported     Pro Forma     Reported     Pro Forma    Reported   Pro Forma
                      ----------  ------------   ----------   ----------  ----------  ----------
<S>                  <C>          <C>            <C>         <C>          <C>         <C>
Net income (loss)    $(2,016,527) ($2,500,396)   $(7,248,388)$(7,766,312) $1,618,244  $1,182,461

Basic net income
  (loss) per share         $(.34)       $(.42)        $(1.23)     $(1.32)      $0.27       $0.20

Diluted net income
  (loss) per share         $(.34)       $(.42)        $(1.23)     $(1.32)      $0.27       $0.20
</TABLE>

The effects of applying SFAS 123 in this pro forma disclosure are not indicative
of future amounts. SFAS 123 does not apply to awards prior to January 1, 1995
and additional awards are anticipated in future years.

The following table summarizes information about stock options outstanding at
November 30, 2002. Options on 506,831 shares were granted under the Company's
stock option plan, and options on an additional 163,350 shares were other option
grants.

                   Options Outstanding                Options Exercisable
--------------------------------------------------- -------------------------
                                Weighted
                   Number       Average    Weighted     Number       Weighted
   Range of    Outstanding at  Remaining   Average  Exercisable at    Average
   Exercise     November 30,  Contractual  Exercise  November 30,    Exercise
    Prices          2002      Life - Years  Price        2002          Price

$ 1.52 - 3.05        12,500       14.9     $  2.80            --           --
  3.05 - 4.57       122,598       14.3        3.19         2,500      $  3.23
  4.57 - 6.09        99,860       10.0        5.26        81,463      $  5.19
  6.09 - 7.61       181,819        7.5        7.01       149,550         7.13
  7.61 - 9.14       160,902       10.4        8.49       101,452         8.70
  9.14 -10.66        15,560       11.3       10.08        10,122        10.02
 10.66 -12.18        56,422       12.2       11.27        17,658        11.22
 12.18 -13.70           176       10.6       12.60           106        12.60
 13.70 -15.23        20,344       11.6       15.07         9,900        15.09
--------------   ----------      ------    --------  -----------    ---------
$ 1.52 -15.23      670,181        10.6    $  7.00       372,751      $  7.59
==============   ==========      ======    ========  ===========    =========

8.     COMMITMENTS, CONTINGENCIES AND CERTAIN RELATED-PARTY TRANSACTIONS

TRANSIT AGREEMENTS

Certain transit agreements require the Company to remit to the transit district
the greater of a percentage of the related advertising revenues or a guaranteed
minimum amount. At November 30, 2002 future guaranteed minimum payments under
the transit agreements are as follows:
<PAGE>
       Fiscal Year Ending
          November 30,
       ------------------
              2003                  17,164,096
              2004                  15,047,243
              2005                  10,670,028
              2006                   5,447,840
              2007                   3,644,573

From time to time, we are party to various legal proceedings or claims, either
asserted or unasserted, which arise in the ordinary course of business. Our
management has reviewed pending legal matters and believes that the resolution
of such matters will not have a material adverse effect on our consolidated
financial position, results of operations or cash flow.

OPERATING LEASES

The Company rents office and production space from an affiliated company 50% of
which is owned by the Company's Chairman and CEO. Such rents totaled $328,541,
$324,246 and $268,262 for the years ended November 30, 2002, 2001 and 2000,
respectively.

The Company leases parcels of property beneath outdoor advertising structures.
These leases are generally for a term of up to ten years, with two five-year
renewal options at the Company's discretion. The Company also leases facilities
for sales, service and installation for its operating offices. Total rent
expense pursuant to these leases was $2,481,009, $2,088,505 and $1,665,334 for
the years ended November 30, 2002, 2001 and 2000, respectively.

At November 30, 2002, future minimum lease payments for all operating leases
described above are as follows

         Fiscal Year Ending
          November 30,
       ------------------

             2003                    2,182,061
             2004                    1,802,831
             2005                    1,583,123
             2006                    1,310,423
             2007                      473,993
          Thereafter                   690,783

9.     EMPLOYEE BENEFIT PLAN

Substantially all of the Company's employees who have met vesting requirements
participate in a defined contribution benefit plan that provides for
discretionary annual contributions by the Company. During the years ended
November 30, 2002, 2001 and 2000, the Company accrued $0, $100,000 and $0
respectively, as a contribution to the plan. In 2001, the Company paid the 2001
contribution through a contribution of 12,345 shares of its common stock to the
Plan and the balance in cash.

10.    GEOGRAPHIC INFORMATION

For geographic information, net revenues from continuing operations are
allocated between the United States of America and Canada, depending on whether
the advertising contracts are to customers within the United States or located
outside the United States. Long-lived assets outside the United States of
America were immaterial for all periods presented.
<PAGE>
                                      Net Revenues for the
                                    Years Ended November 30,
                         ----------------------------------------------
                              2002            2001            2000
                         --------------  --------------  --------------
     Canada              $    8,395,681  $    5,904,701  $    7,523,320
     United States           36,363,315      37,669,318      40,780,933
                         --------------  --------------  --------------
                         $   44,758,996  $   43,574,019  $   48,304,253
                             ==========      ==========      ==========


11.    DEBT FINANCING ARRANGEMENTS AND LIQUIDITY

The Company experienced a net loss of $2,016,527 with net cash flow from
operations of $1,090,829 during the year ended November 30, 2002. Despite the
unfavorable loss, the Company has been able to fulfill its needs for working
capital and capital expenditures, due in part to its ability to maintain
adequate financing arrangements. The Company's line of credit becomes due on
December 15, 2003. Company borrowings at November 30, 2002 were $23,535,100 on
an asset base of $38,126,888. The Company expects that operations will continue
for 2003 with the realization of assets, and discharge of liabilities in the
ordinary course of business. The Company believes that its prospective needs for
working capital and capital expenditures will be met from cash flows generated
by operations and borrowings pursuant to a bank line of credit. If operations
are not consistent with management's plan, there is no assurance that the
amounts from these sources will be sufficient for such purposes. In that event,
or for other reasons, the Company may be required to seek alternative financing
arrangements. There is no assurance that such sources of financing will be
available if required, or if available, will be on terms satisfactory to the
Company.

12.    ACQUISITIONS

In November 2002, the Company acquired all of the minority shareholder's
interest in its 50% owned joint venture, Obie Walls, LLC. Total consideration
paid was $300,000 and consisted of $75,000 cash and a $225,000 note payable. The
Company applied purchase accounting to record the acquisition of the minority
shareholder's 50% interest. As a result, the Company recorded $267,126 of
goodwill.

13.    SUBSEQUENT EVENT

On December 1, 2002 the Company formed a new wholly owned subsidiary, Select
Media, Inc., under which the Company's national sales functions will operate.