Form 10-K

10-K 1 form10k2002.htm FORM 10-K FOR FISCAL YEAR ENDED FEBRUARY 28, 2002 Form 10-K

                                             SECURITIES AND EXCHANGE COMMISSION
                                                   Washington, D.C. 20549

                                                          FORM 10-K

(Mark One)

[  X  ]  Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 for the Fiscal Year Ended February 28,
         2002

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

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

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

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

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

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

                       (317) 266-0100                                                       (317) 266-0100
              (Registrant's Telephone Number,                                       (Registrant's Telephone Number,
                    Including Area Code)                                                 Including Area Code)


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

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

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

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

      The  aggregate  market  value of the  voting  stock  held by  non-affiliates  of the  registrant,  as of April 30,  2002,  was
approximately $1,363,568,000.

      The number of shares outstanding of each of the registrant's classes of common stock, as of April 30, 2002, was:

                                     47,790,845    Class A Common Shares, $.01 par value
                                      5,100,127    Class B Common Shares, $.01 par value
                                              0    Class C Common Shares, $.01 par value

      Emmis Operating  Company has 1,000 shares of common stock  outstanding as of April 30, 2002, and all of these shares are owned
by Emmis Communications Corporation.

                                                DOCUMENTS INCORPORATED BY REFERENCE

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

Proxy Statement for 2002 Annual Meeting                                                             Part III

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
AND EMMIS OPERATING COMPANY AND SUBSIDIARIES

FORM 10-K

TABLE OF CONTENTS

Page
PART I .................................................................................. 4
Item 1. Business............................................................... 4
Item 2. Properties............................................................. 18
Item 3. Legal Proceedings...................................................... 21

PART II .................................................................................. 22
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters.................................................. 22
Item 6. Selected Financial Data................................................ 23
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation................................... 25
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.............. 34
Item 8. Financial Statements and Supplementary Data........................... 36
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure............................... 85

PART III .................................................................................. 85
Item 10. Directors and Executive Officers of the Registrant..................... 85
Item 11. Executive Compensation................................................. 86
Item 12. Security Ownership of Certain Beneficial Owners
and Management....................................................... 86
Item 13. Certain Relationships and Related Transactions......................... 86

PART IV .................................................................................. 86
Item 14. Exhibits and Reports on Form 8-K....................................... 86

Signatures ................................................................................. 89

PART I

ITEM 1. BUSINESS.

GENERAL

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

Our strategy is to selectively acquire underdeveloped media properties in desirable markets and then to create value by
developing those properties to increase their cash flow. We find such underdeveloped properties attractive because they offer
greater potential for revenue and cash flow growth than mature properties. We have been successful in acquiring these types of
media properties and improving their ratings, revenues and cash flow with our marketing focus and innovative programming
expertise. We have created top-performing radio stations which rank, in terms of primary demographic target audience share, among
the top ten stations in the New York City, Los Angeles and Chicago radio markets according to the Fall 2001 Arbitron Survey. We
believe that our strong large-market radio presence and diversity of station formats makes us attractive to a diverse base of
radio advertisers and reduces our dependence on any one economic sector or specific advertiser. Since acquisition, we have
generally improved the margins of our television stations and we believe there is further room for margin improvement.

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

BUSINESS STRATEGY

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

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

EMPHASIZE FOCUSED SALES AND MARKETING STRATEGY. We design our local and national sales efforts based on advertiser demand and
our programming compared to the competitive formats within each market. We provide our sales force with extensive training and the
technology for sophisticated inventory management techniques, which provide frequent price adjustments based on regional and
market conditions. Furthermore, additional company resources have been allocated to locate, hire, train and retain top sales
people. In fiscal 2002, we implemented the Emmis Sales Assault Plan (ESAP), a company-wide initiative geared toward attracting
and developing sales leaders in the radio, television and magazine industries. Through February 28, 2002, nearly 100 sales people
were added to our workforce under this program, which was incremental to hirings in the normal course of business.

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

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

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

RADIO STATIONS

    In the following table,  "Market Rank by Revenue" is the ranking of the market revenue size of the principal radio market served
by the station among all radio  markets in the United  States.  Market  revenue and ranking  figures are from Duncan's  Radio Market
Guide (2001 ed.). We own a 40% equity  interest in the publisher of Duncan's  Radio Market  Guide.  "Ranking in Primary  Demographic
Target" is the  ranking  of the  station  among all radio  stations  in its market  based on the Fall 2001  Arbitron  Survey.  A "t"
indicates the station tied with another station for the stated ranking.  "Station Audience Share" represents a percentage  generally
computed by dividing the average number of persons over age 12 listening to a particular  station  during  specified time periods by
the average number of such persons for all stations in the market area as determined by Arbitron.


                                                                                                 RANKING IN
     STATION                   MARKET                                           PRIMARY            PRIMARY          STATION
       AND                     RANK BY                                        DEMOGRAPHIC        DEMOGRAPHIC       AUDIENCE
     MARKET                    REVENUE            FORMAT                      TARGET AGES          TARGET            SHARE
----------------            -----------   ----------------------           ----------------   ----------------   ------------

Los Angeles, CA                   1
     KPWR-FM                              Contemporary Hit/Urban                 12-24                1               4.0
     KZLA-FM                              Country                                25-54               17t              2.2

New York, NY                      2
     WQHT-FM                              Contemporary Hit/Urban                 12-24                1               5.7
     WQCD-FM                              Contemporary Jazz                      25-54                4               3.4
     WRKS-FM                              Classic Soul/Smooth R&B                25-54               12t              2.7

Chicago, IL                       3
     WKQX-FM                              Alternative Rock                       18-34                4               2.8

Phoenix, AZ                      14
     KTAR-AM                              News/Talk/Sports                       35-64                1               6.8
     KKFR-FM                              Contemporary Hit/Urban                 18-34                2               4.4
     KKLT-FM                              Soft Adult/Contemporary                25-54                7               3.7
     KMVP-AM                              Sports                                 25-54               24t              0.4

St. Louis, MO                    18
     KSHE-FM                              Album Oriented Rock                    25-54                3               4.5
     KPNT-FM                              Alternative Rock                       18-34                1               4.1
     KIHT-FM                              70's Rock                              25-54                6               3.3
     WMLL-FM                              80's Rock                              18-34               13               1.8
     KFTK-FM                              Talk                                   25-54               21               0.8

Indianapolis, IN                 31
     WIBC-AM                              News/Talk/Sports                       35-64                4               8.9
     WYXB-FM                              Soft Adult/Contemporary                25-54                3t              5.6
     WNOU-FM                              Contemporary Hit                       18-34                4               5.5
     WENS-FM                              Adult Contemporary                     25-54                8               3.8

Terre Haute, IN                 171
     WTHI-FM                              Country                                25-54                1              20.5
     WWVR-FM                              Classic Rock                           25-54                2              12.1

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

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


TELEVISION STATIONS

    In the following table, "DMA Rank" is estimated by the A.C. Nielsen Company  ("Nielsen") as of January 2002.  Rankings are based
on the relative size of a station's  market among the 210  generally  recognized  Designated  Market Areas  ("DMAs"),  as defined by
Nielsen.  "Number of Stations in Market" represents the number of television stations ("Reportable  Stations") designated by Nielsen
as "local" to the DMA,  excluding  public  television  stations and stations which do not meet minimum Nielsen  reporting  standards
(i.e.,  a weekly  cumulative  audience of less than 2.5%) for reporting in the Sunday through  Saturday,  9:00 a.m. to midnight time
period.  "Station Rank" reflects the station's rank relative to other  Reportable  Stations based upon the DMA rating as reported by
Nielsen from 9:00 a.m. to midnight,  Sunday through Saturday during November 2001.  "Station Audience Share" reflects an estimate of
the share of DMA  households  viewing  television  received by a local  commercial  station in comparison to other local  commercial
stations in the market as measured from 9:00 a.m. to midnight, Sunday through Saturday.

                                                                        NUMBER OF                   STATION
  TELEVISION           METROPOLITAN          DMA     AFFILIATION/       STATIONS      STATION      AUDIENCE        AFFILIATION
    STATION             AREA SERVED         RANK        CHANNEL         IN MARKET      RANK          SHARE         EXPIRATION
--------------    ----------------------  -------  ---------------   -------------  ----------   -----------   --------------
WKCF-TV           Orlando, FL                20         WB/18              6             4t            7       December 31, 2009
KOIN-TV           Portland, OR               23         CBS/6              6             2t           12       September 18, 2002(2)
WVUE-TV           New Orleans, LA            43         Fox/8              7             3             8       March 5, 2006
KRQE-TV           Albuquerque, NM            48         CBS/13             7             3            10       September 18, 2002(2)
WSAZ-TV           Huntington, WV-
                  Charleston, WV             61         NBC/3              4             1            19       October 1, 2002 (2)
WALA-TV           Mobile, AL-
                  Pensacola, FL              63         Fox/10             5             4            10       September 1, 2005
KSNW-TV           Wichita, KS                65         NBC/3              4             2            15       September 1, 2005
WLUK-TV           Green Bay, WI              69         Fox/11             6             2t           15       November 1, 2005
KGMB-TV (1)       Honolulu, HI               72         CBS/9              5             2            13       September 18, 2002(2)
KHON-TV (1)       Honolulu, HI               72         Fox/2              5             1            14       August 2, 2006
KGUN-TV           Tucson, AZ                 73         ABC/9              7             2t           12       February 6, 2005
KMTV-TV           Omaha, NE                  75         CBS/3              5             2            15       September 18, 2002(2)
WFTX-TV           Fort Myers, FL             76         Fox/36             4             3t            9              N/A
KSNT-TV           Topeka, KS                138         NBC/27             4             2            12       September 1, 2005
WTHI-TV           Terre Haute, IN           145         CBS/10             3             1            22       December 31, 2005

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

(2)      We are currently in negotiations to extend or renew this affiliation agreement and expect the extension or renewal to be
        on terms that are reasonably acceptable to us.

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

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

    The long  established  networks (ABC,  CBS and NBC) have  historically  paid the  affiliated  station to broadcast the network's
programming.  This  network  compensation  payment  varies  depending  on the  time of day that a  station  broadcasts  the  network
programming.  Typically,  prime-time  programming  generates the highest hourly network compensation  payments. In the recent years,
however,  ABC, CBS and NBC have begun to  eliminate or sharply  reduce  compensation  payments to stations for  clearance of network
programming.  In some  cases,  networks  have  undertaken  to cut  compensation  when a  station  is to be sold and the  affiliation
agreement is to be assigned or  transferred,  or when an old  affiliation  agreement  has  expired.  The more  recently  established
networks (Fox and WB) generally pay little or no cash  compensation for the clearance of network  programming.  They tend,  however,
to offer the  affiliated  station  more  advertising  availability  for  local  sale  within  network  programming  than do the long
established networks.

    In the twelve months ended February 2000, 2001 and 2002, we received  approximately $1.9 million,  $2.5 million and $4.6 million
in network compensation payments, which represented less than 1% of our total net revenues in each year.



PUBLISHING OPERATIONS

    We publish the following magazines through our publishing division:

                                                                          Monthly
                                                                            Paid
                                                                        Circulation
                                                                        ------------
                  Regional Magazines:
                  Texas Monthly                                             300,000
                  Los Angeles                                               174,000
                  Atlanta                                                    68,000
                  Indianapolis Monthly                                       44,000
                  Cincinnati Magazine                                        28,000

                  Specialty Magazines*:
                  Country Sampler and Country Marketplace                   426,000

                  * Our specialty magazines are circulated bimonthly.

INTERNET AND NEW TECHNOLOGIES

     We believe that the  development  and explosive  growth of the Internet  present not only a challenge,  but an opportunity  for
broadcasters and publishers.  The primary  challenge is increased  competition for the time and attention of our listeners,  viewers
and readers.  The opportunity is to further  enhance the  relationships  we already have with our listeners,  viewers and readers by
expanding  products and services  offered by our stations and magazines.  For that reason,  we worked with other media  companies to
put together a local media internet venture (LMIV),  which provides content,  website development and hosting services for our radio
stations.  In addition,  we have  individuals at each of our properties  dedicated to website  maintenance  and generating  revenues
from the property's  website.

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

COMMUNITY INVOLVEMENT

    We believe that to be successful,  we must be integrally involved in the communities we serve. To that end, each of our stations
participates  in many community  programs,  fundraisers  and  activities  that benefit a wide variety of  organizations.  Charitable
organizations that have been the beneficiaries of our marathons, walkathons,  dance-a-thons,  concerts, fairs and festivals include,
among others,  United Way's  September  11th Fund,  The March of Dimes,  American  Cancer  Society,  Riley  Children's  Hospital and
research  foundations  seeking  cures for cystic  fibrosis,  leukemia  and AIDS and helping to fight drug abuse.  In addition to our
planned  activities,  our  stations and  magazines  take  leadership  roles in community  responses  to natural  disasters,  such as
commercial-free news broadcasts covering the events of September 11th.

INDUSTRY INVOLVEMENT

    We have an active  leadership  role in a wide range of  industry  organizations.  Our  senior  managers  have  served in various
capacities with industry  associations,  including as directors of the National  Association of Broadcasters,  the Radio Advertising
Bureau,  the Radio Futures Committee,  the Arbitron Advisory Council,  the Fox and CBS Affiliates Boards, and as founding members of
the Radio Operators Caucus.  In addition,  our managers have been voted Radio President of the Year and General Manager of the Year,
and at various  times we have been voted  Most  Respected  Broadcaster  in polls of radio  industry  chief  executive  officers  and
managers.



COMPETITION

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

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

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

ADVERTISING SALES

    Our stations and magazines  derive their  advertising  revenue from local and regional  advertising in the marketplaces in which
they  operate,  as well as from the sale of  national  advertising.  Local  and  most  regional  sales  are made by a  station's  or
magazine's  sales staff.  National sales are made by firms  specializing  in such sales which are  compensated on a  commission-only
basis.  We  believe  that the  volume of  national  advertising  revenue  tends to adjust to shifts in a  station's  audience  share
position more rapidly than does the volume of local and regional  advertising  revenue.  During the twelve months ended February 28,
2002,  approximately  27% of our total net revenues  were derived from  national  sales and 73% were derived from local and regional
sales.  For the year ended  February 28, 2002,  our radio  stations  derived a higher  percentage  of their  revenues from local and
regional sales (79%) than our television (63%) and publishing entities (76%).

EMPLOYEES

    As of February 28, 2002 Emmis had approximately  2,500 full-time  employees and approximately 550 part-time  employees.  We have
approximately  215  employees at various  radio and  television  stations  represented  by unions.  We consider  relations  with our
employees to be good.



FEDERAL REGULATION OF BROADCASTING

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

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



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


            WENS-FM (Indianapolis)                       August 1, 2004
            WIBC-AM (Indianapolis)                       August 1, 2004
            WNOU-FM (Indianapolis)                       August 1, 2004
            WYXB-FM (Indianapolis)                       August 1, 2004
            WTHI-FM (Terre Haute)                        August 1, 2004
            WWVR-FM (Terre Haute)                        August 1, 2004
            WSAZ-TV (Huntington)                         October 1, 2004
            WKQX-FM (Chicago)                            December 1, 2004
            WMLL-FM (St. Louis)                          December 1, 2004
            KSHE-FM (St. Louis)                          February 1, 2005
            WFTX-TV (Fort Myers)                         February 1, 2005
            WKCF-TV (Orlando)                            February 1, 2005
            KFTK-FM (St. Louis)                          February 1, 2005
            KIHT-FM (St. Louis)                          February 1, 2005
            KPNT-FM (St. Louis)                          February 1, 2005
            WALA-TV (Mobile)                             April 1, 2005
            WVUE-TV (New Orleans)                        June 1, 2005
            WTHI-TV (Terre Haute)                        August 1, 2005
            KKLT-FM (Phoenix)                            October 1, 2005
            KKFR-FM (Phoenix)                            October 1, 2005
            KTAR-AM (Phoenix)                            October 1, 2005
            KMVP-AM (Phoenix)                            October 1, 2005
            KPWR-FM (Los Angeles)                        December 1, 2005
            WLUK-TV (Green Bay)                          December 1, 2005
            KZLA-FM (Los Angeles)                        December 1, 2005
            KREZ-TV (Durango)                            April 1, 2006
            WQHT-FM (New York)                           June 1, 2006
            WQCD-FM (New York)                           June 1, 2006
            WRKS-FM (New York)                           June 1, 2006
            KSNW-TV (Wichita)                            June 1, 2006
            KMTV-TV (Omaha)                              June 1, 2006
            KSNT-TV (Topeka)                             June 1, 2006
            KSNG-TV (Garden City)                        June 1, 2006
            KSNC-TV (Great Bend)                         June 1, 2006
            KSNK-TV (McCook-Oberlin)                     June 1, 2006
            KRQE-TV (Albuquerque)                        October 1, 2006
            KGUN-TV (Tucson)                             October 1, 2006
            KBIM-TV (Roswell)                            October 1, 2006
            KHON-TV (Honolulu)                           February 1, 2007
            KAII-TV (Maui)                               February 1, 2007
            KHAW-TV (Hawaii)                             February 1, 2007
            KOIN-TV (Portland)                           February 1, 2007
            KGMB-TV (Honolulu)                           February 1, 2007
            KGMD-TV (Hawaii)                             February 1, 2007
            KGMV-TV (Maui)                               February 1, 2007



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

o    has served the public interest, convenience and necessity;
o    has committed no serious violations of the Communications Act or the FCC rules; and
o    has committed no other violations of the Communications Act or the FCC rules which would constitute a pattern of abuse.

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

    REVIEW OF OWNERSHIP  RESTRICTIONS.  The 1996 Act requires the FCC to review all of its broadcast ownership rules every two years
to determine  whether the public interest  dictates that such rules be repealed or modified.  The first biennial review concluded on
June 20, 2000. In its first  biennial  review  report,  the FCC stated its intention to commence  several  separate  proceedings  to
examine various ownership rules.  The upcoming 2002 biennial review will generate similar proceedings.

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

o    if the market has 45 or more  commercial  radio stations,  one entity may own up to eight  stations,  not more than five of
     which may be in the same service (AM or FM);
o    if the market has between 30 and 44  commercial  radio  stations,  one entity may own up to seven  stations,  not more than
     four of which may be in the same service;
o    if the market has between 15 and 29 commercial  radio stations,  a single entity may own up to six stations,  not more than
     four of which may be in the same service; and
o    if the market has  fourteen or fewer  commercial  radio  stations,  one entity may own up to five  stations,  not more than
     three of which may be in the same  service,  except that one entity may not own more than fifty  percent of the stations in the
     market.

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

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



    TELEVISION  OWNERSHIP.  Pursuant to the 1996 Act, the FCC substantially  revised its local television ownership rules (including
its television "duopoly" rule and radio/television  cross-ownership  rule) in an August 2000 decision, as modified by a January 2002
reconsideration  order.  The FCC's  revised  television  duopoly  rule permits an entity to own two or more  television  stations in
separate  Designated Market Areas ("DMAs").  The rule also permits an entity to own two or more television  stations in the same DMA
if:

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

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

o    a "failed station," i.e., off-air for more than four months, or involved in an involuntary bankruptcy proceeding;
o    a "failing station," i.e., having a low audience share and financially struggling; or
o    an unbuilt facility, where the permittee has made substantial progress towards constructing the facility.

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

    Our acquisition of the Lee Enterprises  stations required a waiver of the television duopoly rule because the signals of KHON-TV
and KGMB-TV (one of the Lee Enterprises  stations)  overlap,  the stations serve the same market,  and both stations are rated among
the top four in that  market.  In  approving  the  acquisition,  the FCC granted a temporary  waiver of the rule,  ordering  that an
application  for  divestiture of either  KHON-TV or KGMB-TV (plus  associated  "satellite"  stations) be filed on or before April 1,
2001; that deadline was  subsequently  extended at our request to April 1, 2002. We have filed a request for a further  extension to
and  including  April 1, 2003.  That  request  has been  opposed  by a Honolulu  broadcaster,  and the FCC has  required  us to file
additional  information  concerning our  divestiture  efforts,  which we have done. The FCC has extended our waiver to and including
July 1, 2002,  pending  its review of the  information  we have  submitted.  In  addition  to  responding  to the FCC's  request for
information,  we have filed a request for interim relief, asking that the divestiture  requirement be stayed,  pending review of the
duopoly rule that will be undertaken  pursuant to the court remand described above and the 2002 biennial  review.  We cannot predict
whether either the extension request or the request for interim relief will be granted.

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

o    up to two commercial  television stations and six commercial radio stations or one commercial  television station and seven
     commercial radio stations in a market where at least 20 independent media voices will remain post-merger;
o    up to two  commercial  television  stations and four  commercial  radio  stations in a market where at least 10 independent
     media voices will remain post-merger; and
o    two commercial  television  stations and one commercial  radio station in a market  regardless of the number of independent
     media voices that will remain post-merger.

The Commission will consider permanent waivers of its revised  radio/television  cross-ownership rule only if one of the stations is
a "failed station."



    Pursuant to the 1996 Act, the FCC also revised its  restriction  on the national  ownership of television  stations in an August
2000  decision,  as reaffirmed  by a January 2002 order.  The revised FCC rules  restrict the ownership of television  stations on a
nationwide  basis to stations  reaching,  in the  aggregate,  no more than 35 percent of the total national  audience.  In response,
certain  TV  group  owners  filed  comments  with the FCC  and/or  appeals  in the D.C.  Circuit  seeking  elimination,  or at least
relaxation,  of this limit. In February 2002, the D.C. Circuit issued a decision  requiring the FCC to initiate further  proceedings
to justify its  decision  to retain the 35 percent  national  television  reach  limitation.  In the same  decision,  the court also
vacated the FCC's rule prohibiting  common ownership of a television  station and a cable television  system in the same market.  In
early  April  2002,  the FCC  granted  Viacom/CBS  a stay of the May 2002  deadline  that the FCC had set for the  network to divest
certain of its television  stations in order to come into  compliance  with the 35 percent cap; the stay will remain in effect until
one year after the FCC  completes  review of the  "national  cap" as required by the court's  decision.  Fox has  obtained a similar
stay.  The FCC and certain  private  parties  have asked the court to  reconsider  its  decision,  arguing in part that the decision
imposes too  stringent  a standard on the  Commission  for  retention  of  existing  rules in the context of the  agency's  biennial
reviews.

    Current FCC rules also prohibit  common  ownership of a daily  newspaper  and a radio or television  station in the same market.
Pursuant to its biennial review report, the FCC has initiated a proceeding  requesting comment on whether to eliminate,  or at least
relax, this restriction.

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

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

    ATTRIBUTION OF OWNERSHIP  INTERESTS.  In applying its ownership rules, the FCC requires the "attribution" of broadcast  licenses
held by a  broadcasting  company to  certain of the  company's  stockholders,  officers  or  directors,  such that there  would be a
violation of FCC regulations  where such a stockholder,  officer or director and the  broadcasting  company  together held more than
the permitted  number of stations or a prohibited  combination  of media  outlets in the same market.  The FCC's  attribution  rules
generally deem the following relationships and interests to be attributable for purposes of the FCC's ownership restrictions:

o    all officers and directors of a licensee and its (in)direct parent(s);
o    voting stock interests of at least five percent;
o    stock interests of at least 20 percent,  if the holder is a passive  institutional  investor (i.e.,  investment  companies,
     insurance companies, banks);
o    any  equity  interest  in a limited  partnership  or  limited  liability  company  where the  limited  partner or member is
     "materially involved" in the media-related activities of the LP or LLC;
o    equity and/or debt  interests  which,  in the  aggregate,  exceed 33 percent of the total asset value of a station or other
     media entity (the  "equity/debt  plus policy"),  if the interest  holder  supplies more than 15 percent of the station's  total
     weekly  programming  (usually  pursuant  to a time  brokerage,  local  marketing  or  network  affiliation  agreement)  or is a
     same-market media entity (i.e., broadcast company or newspaper).

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

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

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

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

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

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



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

    Television  broadcasters  are allowed to use their DTV channels  according to their best business  judgment,  provided that they
continue to offer at least one free  programming  service that is at least  comparable to today's analog service.  Digital  services
and  programming  can include  multiple  standard  definition  program  channels,  data transfer,  subscription  video,  interactive
materials,  and audio  signals  (so-called  "ancillary"  services).  The FCC has imposed a fee of five  percent of the annual  gross
revenues for television  broadcasters'  use of the DTV spectrum to offer ancillary  services.  The form and amount of these fees may
have a  significant  effect on the  profitability  of such  services.  Broadcasters  will not be required  to air "high  definition"
programming or,  initially,  to simulcast their analog  programming on the digital  channel.  Affiliates of ABC, CBS, NBC and Fox in
the top 10  television  markets  were  required  to be on the air with a digital  signal by May 1,  1999,  and  affiliates  of those
networks in markets 11-30,  including  KOIN-TV,  were required to be on the air with a digital  signal by November 1, 2000;  KOIN-TV
complied with this deadline.  The remaining  commercial  stations,  including all other  television  stations  owned by Emmis,  were
required  to file DTV  construction  permit  applications  by November  1, 2000,  and were  required to be on the air with a digital
signal by May 1,  2002,  absent an  extension  on a  station-by-station  basis.  All  Emmis'  stations  met the  November  1,  2000,
application  deadline.  Stations  WALA,  WKCF,  and WFTX met the May 1, 2002 on-air  deadline,  and the deadline for all other Emmis
stations has been  extended by the FCC to and  including  November 1, 2002.  Additionally,  all of the Emmis  stations  filed timely
applications  to "maximize"  (expand the coverage of) the DTV  facilities in those cases where it was deemed  appropriate to protect
the stations from interference from low power television broadcasters.

    In January  2001,  the FCC  issued a further  order on DTV  transition  issues,  setting a number of  deadlines  for  commercial
broadcasters.  By the end of December 2002,  commercial  stations with both analog and digital  channel  assignments  within the DTV
core spectrum  (channels 2-51) must elect the channel they will use for  broadcasting  after the transition is complete.  By the end
of December 2004, commercial  broadcasters not replicating their existing analog service areas will lose interference  protection in
those portions of their existing  service areas not covered by their digital signals.  Also by the end of December 2004,  commercial
broadcasters must provide a stronger digital signal to their communities of license than was previously required.

    In November 2001, the FCC issued a reconsideration  order on DTV transition issues, which modified many of the rules established
in January  2001.  Specifically,  the  reconsideration  order  temporarily  defers the FCC's  previously  established  deadlines for
broadcasters  to: (1) choose their permanent  post-transition  DTV channel;  (2) provide a DTV signal that  replicates  their analog
service area; and (3) build  maximized DTV  facilities.  The FCC intends to establish  deadlines for these  requirements in its next
periodic  review of the DTV  transition  and  emphasized  that none of the deadlines will be after the later of December 31, 2006 or
the date by which 85 percent of the  television  households  in a  licensee's  market are  capable of  receiving  the signals of DTV
stations.  The order also permits  broadcasters to request special  temporary  authority to construct initial minimal DTV facilities
(i.e.,  facilities that only cover their cities of license) while retaining interference protection for their allotted and maximized
facilities.  The order further allows commercial  stations subject to the May 1, 2002 construction  deadline (i.e.,  stations not in
the top 30 markets) to initially broadcast a digital signal during prime time hours only.

    The FCC has authorized the provision of video programming  directly to home subscribers  through  high-powered  direct broadcast
satellites  ("DBS").  DBS systems currently are capable of broadcasting over 500 channels of digital  television service directly to
subscribers'  equipment  with  18-inch  receiving  dishes and  decoders.  At this time,  several  entities  provide  DBS  service to
consumers  throughout the country.  Other entities hold DBS licenses,  but have not yet commenced service.  DBS operators may import
distant network signals into local television  markets where the individual  household that would receive the distant network signal
is not capable of receiving a sufficiently  strong  "over-the-air"  signal of the local network  affiliate of the given network.  In
November 1999,  Congress enacted the Satellite Home Viewer  Improvement Act ("SHVIA") which authorizes DBS companies also to provide

local television signals to their subscribers pursuant to a retransmission consent agreement with the station. In March 2000, the
FCC adopted regulations governing the statutory requirements for "good faith" negotiations and non-exclusive agreements in
retransmission consent contracts between broadcasters (and all multichannel video program distributors). Broadcasters are
required to negotiate non-exclusive retransmission consent agreements in good faith until January 1, 2006; however, the law
explicitly provides that broadcasters may enter into agreements with competing DBS carriers on different terms.

Moreover, effective January 1, 2002, local television stations became entitled to "must-carry" rights on a DBS system if the
system is providing any local television station(s) to its subscribers. SHVIA also "grandfathered" delivery of the signals of
television stations via DBS to certain subscribers who may have been receiving such signals in violation of prior law. In
November 2000, the FCC adopted rules to implement SHVIA provisions regarding "local-into-local" satellite service, must-carry
election cycle rules and related policies for satellite carriage of broadcast signals. Under the new FCC rules, a broadcast
television station must affirmatively elect must-carry status to require a DBS operator to carry its station; the first elections
were due by July 1, 2001. In response to a challenge to certain provisions of SHVIA, a panel of the U.S. Court of Appeals for the
Fourth Circuit upheld the requirement that DBS operators carry the signal of all local television stations in markets where they
elect to carry any local signals. The court also upheld an FCC rule that permits DBS operators to offer all local television
stations on a single tier or on an a la carte basis. The rule allows consumers to choose between the two options. In response to
broadcasters' first elections, DBS operators issued a large number of carriage denial letters, prompting the FCC to issue an order
in September 2001 clarifying the DBS mandatory carriage rules. In particular, the FCC emphasized that a satellite carrier must
have a "reasonable basis" for rejecting a broadcast station's carriage request.

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

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

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

The FCC has also authorized two companies to launch and operate satellite digital audio radio service ("SDARS") systems on a
nationwide basis. One of those companies, Sirius Satellite Radio, Inc. has launched three satellites and began commercial service
in a few cities in February 2002. The other company, XM Radio, has launched two satellites and is now providing nationwide
service. Currently, the FCC is considering a proposal to permit SDARS to be supplemented by terrestrial "repeating" transmitters
designed to fill "gaps" in satellite coverage. Also, the FCC has undertaken an inquiry regarding rules for the terrestrial
broadcast of digital signals. Among other issues, this inquiry addresses the need for spectrum outside the existing FM band and
the role of existing broadcasters. A technical standard for the provision of terrestrial digital radio broadcasting has been
developed and is currently before the FCC. We cannot predict the impact of SDARS on our radio stations' listenership.

In November 1999, the Commission released proposed rules for terrestrial digital audio broadcasting ("DAB"). The proposed
rules would permit existing AM and FM stations to operate on their current frequencies in either full analog mode, full digital
mode, or a combination of both (at reduced power). DAB technology is still evolving, and it is not yet certain whether DAB
transmission as proposed will be feasible.

In January 2001, the D.C. Circuit concluded that the FCC's Equal Employment Opportunity ("EEO") regulations were
unconstitutional. Accordingly, broadcasters are currently not subject to FCC-imposed EEO regulations. In December 2001, the FCC
solicited public comment on proposed new EEO affirmative action rules. This proceeding remains pending,.

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

o    proposals to impose spectrum use or other fees on FCC licensees;
o    proposals to repeal or modify some or all of the FCC's multiple ownership rules and/or policies;
o    proposals to change rules relating to political broadcasting;
o    technical and frequency allocation matters;
o    AM stereo broadcasting;
o    proposals to permit expanded use of FM translator stations;
o    proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages;
o    proposals to tighten safety guidelines relating to radio frequency radiation exposure;
o    proposals permitting FM stations to accept formerly impermissible interference;
o    proposals to reinstate holding periods for licenses;
o    changes to broadcast technical requirements, including those relative to the implementation of SDARS and DAB;
o    proposals to limit the tax deductibility of advertising expenses by advertisers.

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

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

GEOGRAPHIC FINANCIAL INFORMATION

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

                                                               For the year ended February 28 (29),
                                                          2000                2001                2002
                                                    -----------------    ---------------     ---------------
                                                                          (In Thousands)
           Net Revenues:
               Domestic                             $         316,454    $       456,040     $       517,082
               International                                    8,811             14,578              16,698
                                                    -----------------    ---------------     ---------------
               Total                                          325,265            470,618             533,780
                                                    =================    ===============     ===============


                                                                      As of February 28 (29),
                                                           2000                2001               2002
                                                    -----------------    ---------------     ---------------
                                                                          (In Thousands)
           Noncurrent Assets:
               Domestic                             $       1,181,640    $     2,263,796     $     2,229,680
               International                                   32,950             27,970              16,867
                                                    -----------------    ---------------     ---------------
               Total                                        1,214,590          2,291,766           2,246,547
                                                    =================    ===============     ===============

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


ITEM 2.  PROPERTIES.

    The following  table sets forth  information  as of February 28, 2002 with respect to offices,  studios and broadcast  towers of
stations and magazines  currently  owned by Emmis.  Management  believes that the  properties are in good condition and are suitable
for Emmis' operations.

                                                                             OWNED               EXPIRATION
                                                       YEAR PLACED            OR                    DATE
              PROPERTY                                 IN SERVICE           LEASED                OF LEASE
--------------------------------------------        ----------------      ----------             ----------
Corporate and Publishing Headquarters/                    1998               Owned                      --
WENS-FM/ WIBC-AM/WNOU-FM/
WYXB-FM/ Indianapolis Monthly
One Emmis Plaza
40 Monument Circle
Indianapolis, Indiana
WENS-FM Tower                                             1985               Owned                      --
WNOU-FM Tower                                             1979               Owned                      --
WIBC-AM Tower                                             1966               Owned                      --
WYXB-FM Tower                                             1965              Leased                Month-to-month

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

KPWR-FM                                                   1988              Leased                February 2003
2600 West Olive
Burbank, California
KPWR-FM Tower                                             1993              Leased               October 2002 (1)

WQHT-FM/WRKS-FM/WQCD-FM                                   1996              Leased                 January 2013
395 Hudson Street, 7th Floor
New York, New York
WQHT-FM Tower                                             1984              Leased                 January 2010
WRKS-FM Tower                                             1984              Leased                November 2005
WQCD-FM Tower                                             1984              Leased                February 2007

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

Atlanta Magazine Office                                   1997              Leased                  July 2003
1330 Peachtree Street, N.E.
Atlanta, Georgia

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

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

KHON-TV                                                   1999               Owned                      --
88 Piikoi Street
Honolulu, HI
KHON-TV Tower                                             1978              Leased      December 2008 with 10 year option
                                                                                                        --
WALA-TV                                                   2002               Owned
1501 Satchel Paige Dr.
Mobile, AL
WALA-TV Tower                                             1962               Owned                      --

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




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

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

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

WKCF-TV                                                   1998               Owned                      --
31 Skyine Drive
Lake Mary, FL
WKCF-TV Tower                                             2001              Leased                September 2006

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

Country Sampler                                           1988               Owned                      --
707 Kautz Road
St. Charles, IL  60174

RDS/Co-Opportunities                                      1989              Leased                December 2003
324 Campus Lane, Suite B
Suisun, CA  94585

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

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

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

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

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

KZLA-FM                                                   1997               Owned                      --
7755 Sunset Blvd.
Los Angeles, CA 90045
KZLA-FM Tower                                             1991              Leased                June 30, 2003

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

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

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

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

KTAR-AM/KMVP-AM/KKLT-FM/KKFR-FM 1994 Owned --
5300 N. Central Ave.
Phoenix, AZ 85012
KTAR-AM Tower 1958 Owned --
KMVP-AM Tower 1996 Leased December 2008
KKLT-FM Tower 1990 Owned --
KKFR-FM Tower 1998 Leased April 2003

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

KSNW-TV Tower 1955 Owned --

Argentina 1996 Owned --
Uriarte 1899 (1414) Capital Federal
Buenos Aires, Argentina
Argentina Tower 1996 Owned --

--------------
(1) In April 2002, Emmis exercised its option to extend the lease until October 2012. The lease contains one additional
ten-year renewal option. Emmis also owns a tower site which it placed in service in 1984 and currently uses as a back-up
facility and on which it leases space to other broadcasters.

ITEM 3. LEGAL PROCEEDINGS.

Emmis currently and from time to time is involved in litigation incidental to the conduct of its business, but Emmis is not
currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on
the financial position or results of operations of Emmis. However, instead of making a required license payment to the Hungarian
government in November 2001, our 59.5% owned national radio station in Hungary requested a modification of the broadcast contract
and ultimately filed suit in arbitration court seeking reformation of the contract and requesting that the payments be reduced.
The Hungarian government then issued an order revoking our station's broadcast license for non-payment of the license fee, and we
appealed the order in the Hungarian ordinary court. The Hungarian government has also filed an action seeking to liquidate our
Hungarian broadcast company. We are vigorously prosecuting the actions in the arbitration court and ordinary court and are
vigorously opposing the action seeking liquidation. However, we cannot predict the outcome of these actions. We do not plan to
continue to operate the station under the present fee arrangement. We do not expect an adverse material financial impact to Emmis
or EOC if the station does not continue to operate.


                                                              PART II

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

    Emmis' Class A common stock is traded in the  over-the-counter  market and is quoted on the National  Association  of Securities
Dealers Automated Quotation (NASDAQ) National Market System under the symbol EMMS.

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

                           QUARTER ENDED                               HIGH                       LOW
                           May 2000                                   47.38                     27.00
                           August 2000                                49.13                     31.38
                           November 2000                              34.25                     17.38
                           February 2001                              37.88                     22.13


                           May 2001                                   33.95                     20.06
                           August 2001                                33.65                     23.32
                           November 2001                              24.95                     12.27
                           February 2002                              27.37                     15.85


    At April 30, 2002, there were 3,932 record holders of the Class A common stock, and there were two record holders,  but only one
beneficial owner, of the Class B common stock.

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


ITEM 6.  SELECTED FINANCIAL DATA
          Emmis Communications Corporation
          FINANCIAL HIGHLIGHTS
                                                                           YEAR ENDED FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                    (Dollars in thousands, except share data)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------
OPERATING DATA:
    Net revenues                               $     140,583    $     232,836     $     325,265    $     470,618     $     533,780
    Operating expenses                                81,170          143,348           199,818          296,405           348,115
    Corporate expenses                                 7,845           11,904            15,430           17,601            20,283
    Time brokerage fees                                5,667            2,220                 -            7,344               479
    Depreciation and amortization                      7,536           28,314            44,161           74,018           100,258
    Non-cash compensation                              1,482            4,269             7,357            5,400             9,095
    Restructuring fees                                     -                -                 -            2,057               768
    Impairment loss and other (1)                          -                -               896            2,000            10,672
    Operating income                                  36,883           42,781            57,603           65,793            44,110
    Interest expense                                  13,772           35,650            51,986           72,444           129,100
    Loss on donation of radio station                  4,833                -               956                -                 -
    Other income (loss), net (2)                           6            1,914             4,203           38,037           (3,657)

    Income (loss) before income taxes
     and extraordinary item                           18,284            9,045             8,864           31,386          (88,647)
    Income (loss) before extraordinary item           11,084            2,845             1,989           13,736          (63,024)
    Net income (loss)                                 11,084            1,248              (33)           13,736          (64,108)
    Net income (loss) available to
     common shareholders                              11,084            1,248           (3,177)            4,752          (73,092)

    Net income (loss) per share
     available to common shareholders:
      Basic                                    $        0.51    $        0.04     $      (0.09)    $        $0.10    $      (1.54)
      Diluted                                  $        0.49    $        0.04     $      (0.09)    $        $0.10    $      (1.54)
    Weight average common shares
     Outstanding (3):
      Basic                                           21,806           28,906             36,156          46,869            47,334
      Diluted                                         22,724           29,696            36,156           47,940            47,334

                                                                                 FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------
BALANCE SHEET DATA:
    Cash                                       $       5,785    $       6,117     $      17,370    $      59,899     $       6,362
    Working capital (4)                               21,635            1,249            28,274           97,885            19,828
    Net intangible assets                            234,558          802,307         1,033,970        1,852,259         1,953,331
    Total assets                                     333,388        1,014,831         1,327,306        2,506,872         2,510,069
    Long-term credit facility, senior subordinated
     debt and senior discount notes (5)              215,000          577,000           300,000        1,380,000         1,343,507
    Shareholders' equity                              43,910          235,549           776,367          807,471           735,557

                                                                           YEAR ENDED FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------

OTHER DATA:
    Broadcast/publishing cash flow (6)         $      59,413    $      89,488     $     125,447    $     174,213     $     185,665
    EBITDA before certain charges (6)                 51,568           77,584           110,017          156,612           165,382
    Cash flows from (used in):
     Operating activities                             22,487           35,121            26,360           97,730            69,377
     Investing activities                           (116,693)        (541,470)         (271,946)      (1,110,755)         (175,105)
     Financing activities                             98,800          506,681           256,839        1,055,554            52,191
    Capital expenditures                              16,991           37,383            29,316           26,225            28,416

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

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

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

(4)     Excludes assets held for sale and credit facility debt to be repaid with proceeds of assets held for sale.

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

(6)     Broadcast/publishing  cash flow and EBITDA  before  certain  charges are not  measures of liquidity  or of  performance  in
        accordance with accounting  principles  generally accepted in the United States, and should be viewed as a supplement to and
        not a substitute for Emmis' results of operations presented on the basis of accounting  principles generally accepted in the
        United  States.  See  Management's  Discussion  and Analysis of Financial  Condition  and Results of  operations  for a more
        detailed description of broadcast/publishing cash flow and EBITDA before certain charges.


Emmis Operating Company
FINANCIAL HIGHLIGHTS

                                                                           YEAR ENDED FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                    (Dollars in thousands, except share data)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------
OPERATING DATA:
    Net revenues                               $     140,583    $     232,836     $     325,265    $     470,618     $     533,780
    Operating expenses                                81,170          143,348           199,818          296,405           348,115
    Corporate expenses                                 7,845           11,904            15,430           17,601            20,283
    Time brokerage fees                                5,667            2,220                 -            7,344               479
    Depreciation and amortization                      7,536           28,314            44,161           74,018           100,258
    Non-cash compensation                              1,482            4,269             7,357            5,400             9,095
    Restructuring fees                                     -                -                 -            2,057               768
    Impairment loss and other (1)                          -                -               896            2,000            10,672
    Operating income                                  36,883           42,781            57,603           65,793            44,110
    Interest expense                                  13,772           35,650            51,986           72,444         (104,102)
    Loss on donation of radio station                  4,833                -               956                -                 -
    Other income (loss), net (2)                           6            1,914             4,203           38,037           (4,643)

    Income (loss) before income taxes
     and extraordinary item                           18,284            9,045             8,864           31,386          (64,635)
    Income (loss) before extraordinary item           11,084            2,845             1,989           13,736          (46,802)
    Net income (loss)                                 11,084            1,248              (33)           13,736          (47,886)


                                                                                 FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------
BALANCE SHEET DATA:
    Cash                                       $       5,785    $       6,117     $      17,370    $      59,899     $       6,362
    Working capital (3)                               21,635            1,249            28,274           97,885            20,951
    Net intangible assets                            234,558          802,307         1,033,970        1,852,259         1,953,331
    Total assets                                     333,388        1,014,831         1,327,306        2,506,872         2,499,139
    Long-term credit facility and senior
     subordinated debt (4)                           215,000          577,000           300,000        1,380,000         1,117,000
    Shareholders' equity                              43,910          235,549           776,367          807,471           944,467

                                                                           YEAR ENDED FEBRUARY 28 (29),
                                               -----------------------------------------------------------------------------------
                                                                             (Dollars in thousands)
                                                   1998              1999             2000              2001             2002
                                               -------------    -------------     -------------    -------------     -------------

OTHER DATA:
    Broadcast/publishing cash flow (5)         $      59,413    $      89,488     $     125,447    $     174,213     $     185,665
    EBITDA before certain charges (5)                 51,568           77,584           110,017          156,612           165,382
    Cash flows from (used in):
     Operating activities                             22,487           35,121            23,471           86,871            67,393
     Investing activities                           (116,693)        (541,470)         (271,946)      (1,110,755)         (175,105)
     Financing activities                             98,800          506,681           259,728        1,066,413            54,175
    Capital expenditures                              16,991           37,383            29,316           26,225            28,416

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

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

(3)     Excludes assets held for sale and credit facility debt to be repaid with proceeds of assets held for sale.

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

(5)     Broadcast/publishing  cash flow and EBITDA  before  certain  charges are not  measures of liquidity  or of  performance  in
        accordance with accounting  principles  generally accepted in the United States, and should be viewed as a supplement to and
        not a substitute for Emmis' results of operations presented on the basis of accounting  principles generally accepted in the
        United  States.  See  Management's  Discussion  and Analysis of Financial  Condition  and Results of  operations  for a more
        detailed description of broadcast/publishing cash flow and EBITDA before certain charges.

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

GENERAL

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

Emmis generally evaluates the performance of its operating entities based on broadcast cash flow (BCF) and publishing cash flow
(PCF). Management believes that BCF and PCF are useful because they provide a meaningful comparison of operating performance
between companies in the industry and serve as an indicator of the market value of a group of stations or publishing entities.
BCF and PCF are generally recognized by the broadcast and publishing industries as a measure of performance and are used by
analysts who report on the performance of broadcasting and publishing groups. BCF and PCF do not take into account Emmis' debt
service requirements and other commitments and, accordingly, BCF and PCF are not necessarily indicative of amounts that may be
available for dividends, reinvestment in Emmis' business or other discretionary uses.

BCF and PCF are not measures of liquidity or of performance in accordance with accounting principles generally accepted in the
United States, and should be viewed as a supplement to and not a substitute for our results of operations presented on the basis
of accounting principles generally accepted in the United States. Moreover, BCF and PCF are not standardized measures and may be
calculated in a number of ways. Emmis defines BCF and PCF as revenues net of agency commissions and operating expenses. The
primary source of broadcast advertising revenues is the sale of advertising time to local and national advertisers. Publishing
entities derive revenue from subscriptions and sale of print advertising. Broadcasting revenue is recognized as advertisements
are aired. Publication revenue is recognized in the month of delivery of the publication. The most significant broadcast
operating expenses are employee salaries and commissions, costs associated with programming, advertising and promotion, and
station general and administrative costs. Significant publishing operating expenses are employee salaries and commissions, costs
associated with producing the magazine, and general and administrative costs.

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

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

ACQUISITIONS, DISPOSITIONS AND INVESTMENTS

During the three year period ended February 28, 2002, we acquired and retained ten radio stations, nine television stations and
three magazine publications for an aggregate cash purchase price of $1.4 billion. A recap of the transactions completed is
summarized hereafter. These transactions impact the comparability of operating results year over year.

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

price for this station was less than its carrying amount as of February 28, 2002, we recognized an impairment loss of $9.1 million
in fiscal 2002, which is reflected in the accompanying consolidated statements of operations. The $87.7 million of credit
facility debt repaid with the net proceeds of the sale is reflected as a current liability in the accompanying consolidated
balance sheets.

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

On March 28, 2001, Emmis completed its acquisition of substantially all of the assets of radio stations KTAR-AM, KMVP-AM and
KKLT-FM in Phoenix, Arizona from Hearst-Argyle Television, Inc. for $160.0 million in cash, plus transaction related costs of $0.7
million. The Company financed the acquisition through a $20.0 million advance payment borrowed under the credit facility in June
2000 and the remainder with borrowings under the credit facility and proceeds from ECC's March 2001 senior discount notes
offering. The acquisition was accounted for as a purchase. Emmis began programming and selling advertising on the radio stations
on August 1, 2000 under a time brokerage agreement. The total purchase price was allocated to property and equipment and
broadcast licenses based on an appraisal. Broadcast licenses are included in intangible assets in the accompanying consolidated
balance sheets and are being amortized over 40 years.

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

On October 6, 2000, Emmis acquired certain assets of radio stations WIL-FM, WRTH-AM, WVRV-FM, KPNT-FM, KXOK-FM (reformatted as
KFTK-FM) and KIHT-FM in St. Louis, Missouri from Sinclair Broadcast Group, Inc. for $220.0 million in cash, plus transaction
related costs of $10.9 million (the "Sinclair Acquisition"). The agreement also included the settlement of outstanding lawsuits
by and between Emmis and Sinclair. The settlement resulted in no gain or loss by either party. This acquisition was financed
through borrowings under Emmis' credit facility and was accounted for as a purchase. The total purchase price was allocated to
property and equipment and broadcast licenses based on an appraisal. Broadcast licenses are included in intangible assets in the
accompanying consolidated balance sheets and are being amortized over 40 years.

On October 6, 2000, Emmis acquired certain assets of KZLA-FM (the "KZLA Acquisition") in Los Angeles, California from
Bonneville International Corporation in exchange for radio stations WIL-FM, WRTH-AM and WVRV-FM, which Emmis acquired from
Sinclair, as well as radio station WKKX-FM which Emmis already owned (all in the St. Louis, Missouri market). Since the fair
value of WKKX exceeded the book value of the station at the date of the exchange, Emmis recorded a gain on exchange of assets of
$22.0 million. This gain is included in other income, net in the accompanying consolidated statements of operations. From August
1, 2000 through the date of acquisition, Emmis operated KZLA-FM under a time brokerage agreement. The exchange was accounted for
as a purchase. The total purchase price of $185.0 million was allocated to property and equipment and broadcast licenses based on
an appraisal. Broadcast licenses are included in intangible assets in the accompanying consolidated balance sheets and are being
amortized over 40 years.

Effective October 1, 2000 (closed October 2, 2000), Emmis purchased eight network-affiliated and seven satellite television
stations from Lee Enterprises, Inc. for $559.5 million in cash, the payment of $21.3 million for working capital and transaction
related costs of $2.2 million (the "Lee Acquisition"). In connection with the acquisition, Emmis recorded $31.3 million of
deferred tax liabilities and $17.5 million in contract liabilities. Also, Emmis recorded a severance related liability of $1.8
million, of which $1.5 million remains outstanding as of February 28, 2002. This transaction was financed through borrowings
under Emmis' credit facility and was accounted for as a purchase. The Lee Acquisition consisted of the following stations:

- KOIN-TV (CBS) in Portland, Oregon
- KRQE-TV (CBS) in Albuquerque, New Mexico (including satellite stations KBIM-TV, Roswell, New Mexico and KREZ-TV, Durango,
Colorado-Farmington, New Mexico)
- WSAZ-TV (NBC) in Charleston-Huntington, West Virginia
- KSNW-TV (NBC) in Wichita, Kansas (including satellite stations KSNG-TV, Garden City, Kansas, KSNC-TV, Great Bend, Kansas
and KSNK-TV, Oberlin, Kansas-McCook, Nebraska)
- KGMB-TV (CBS) in Honolulu, Hawaii (including satellite stations KGMD-TV, Hilo, Hawaii and KGMV-TV, Wailuku, Hawaii)
- KGUN-TV (ABC) in Tucson, Arizona
- KMTV-TV (CBS) in Omaha, Nebraska and
- KSNT-TV (NBC) in Topeka, Kansas.

The total purchase price was allocated to property and equipment, television program rights, working capital related items and
broadcast licenses based on an appraisal. Broadcast licenses are included in intangible assets in the accompanying consolidated
balance sheets and are being amortized over 40 years.

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

On August 24, 2000, Emmis acquired the assets of radio station KKFR-FM in Phoenix, Arizona from AMFM, Inc. for an allocated
$72.0 million in cash, plus transaction related costs of $0.5 million (the "AMFM Acquisition"). Emmis financed the acquisition
through borrowings under its credit facility. The acquisition was accounted for as a purchase. The total purchase price was
allocated to property and equipment and broadcast licenses based on an appraisal. Broadcast licenses are included in intangible
assets in the accompanying consolidated balance sheets and are being amortized over 40 years.

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

On March 3, 2000, Emmis acquired all of the outstanding capital stock of Los Angeles Magazine Holding Company, Inc. for
approximately $36.8 million in cash plus liabilities recorded of $2.7 million (the "Los Angeles Magazine Acquisition"). Los
Angeles Magazine Holding Company, Inc., through a wholly-owned subsidiary, owns and operates Los Angeles, a city magazine. The
acquisition was accounted for as a purchase and was financed through additional borrowings under its credit facility. The excess
of the purchase price over the estimated fair value of identifiable assets was $36.0 million, which is included in intangible
assets in the accompanying consolidated balance sheets and is being amortized over 15 years.

On December 14, 1999, the Company completed its acquisition of substantially all of the assets of Country Marketplace and
related publications from H&S Media, Inc. for approximately $1.8 million in cash plus liabilities recorded of approximately $.6
million. The acquisition was accounted for as a purchase and was financed through borrowings under the credit facility. The
excess of the purchase price over the estimated fair value of identifiable assets was $2.3 million, which is included in
intangible assets in the accompanying consolidated balance sheets and is being amortized over 15 years.

On November 16, 1999, Emmis purchased an interest in BuyItNow.com L.L.C. for $5.0 million in cash, which represented an
original investment of 2.49% of the outstanding equity of BuyItNow.com L.L.C. During fiscal 2001, Emmis reduced the carrying
value of its investment in BuyItNow.com from $5.0 million to zero as the decline in the value of the investment was deemed to be
other than temporary.

On November 9, 1999, the Company completed its acquisition of 75% of the outstanding common stock of Votionis, S.A.
("Votionis") for $13.3 million in cash plus liabilities recorded of $5.6 million. Additional consideration of $1.6 million was
paid subsequent to closing and up to an additional $0.6 million will be paid by November 2003 if certain conditions are met.
Votionis owns one FM and one AM radio station located in Buenos Aires, Argentina (the "Votionis Acquisition"). The acquisition
was accounted for as a purchase and was financed with proceeds from the Company's October 1999 Common and Preferred Equity
Offerings. Broadcast licenses are included in intangible assets in the accompanying consolidated balance sheets. This broadcast
license is being amortized over 23 years.

On October 29, 1999, the Company completed its acquisition of substantially all of the assets of television station WKCF in
Orlando, Florida (the "WKCF Acquisition") from Press Communications, L.L.C. for approximately $197.1 million in cash. The
purchase price included the purchase of land and a building for $2.2 million. The Company financed the acquisition through a
$12.5 million advance payment borrowed under the credit facility and proceeds from the Company's October 1999 Common and Preferred
Equity Offerings. In connection with the acquisition, the Company recorded $49.3 million in contract liabilities. The
acquisition was accounted for as a purchase. The total purchase price was allocated to property and equipment, television program
rights and broadcast licenses based on an appraisal. Broadcast licenses are included in intangible assets and are being amortized
over 40 years. WKCF is an affiliate of the WB Television Network. As part of the WKCF Acquisition, the Company entered into an
agreement with the WB Television Network which, among other things, extends the existing network affiliation agreement through
December 2009.

On April 1, 1999, the Company completed its acquisition of substantially all of the assets of Country Sampler, Inc. (the
"Country Sampler Acquisition") for approximately $20.9 million plus liabilities recorded of approximately $4.7 million. The
purchase price was payable with $18.5 million in cash at closing, which was financed through additional borrowings under the
credit facility, $2.0 million payable under a contract with the principal shareholder through April 2003, and $.5 million paid in
October 1999. The acquisition was accounted for as a purchase. The excess of the purchase price over the estimated fair value of
identifiable assets was $17.7 million, which is included in intangible assets in the accompanying consolidated balance sheets and
is being amortized over 15 years.

RESULTS OF OPERATIONS

YEAR ENDED FEBRUARY 28, 2002 COMPARED TO YEAR ENDED FEBRUARY 28, 2001. Net revenues for the year ended February 28, 2002 were
$533.8 million compared to $470.6 million for the same period of the prior year, an increase of $63.2 million or 13.4%. On a pro
forma basis (after giving effect to all acquisitions consummated since March 1, 2000), net revenues for the year ended February
28, 2002 would have decreased $38.2 million or 6.7%. This pro forma decrease in net revenues is generally due to a softening U.S.
economy resulting in an overall decrease in advertisement sales, coupled with the absence of political television advertisements
in the twelve months ended February 28, 2002. The decrease was partially offset by a $3.7 million increase in net revenues
primarily attributable to our television division earning a performance guaranty when our national sales rep agency did not
achieve certain performance targets in the second quarter.

Operating expenses for the year ended February 28, 2002 were $348.1 million compared to $296.4 million for the same period of
the prior year, an increase of $51.7 million or, 17.4%. On a pro forma basis, operating expenses decreased $12.3 million or
3.4%. This pro forma decrease is due to the elimination of certain operational positions in the television division and a
decrease in promotional spending, offset by sales personnel increases in all of our divisions. Also, in the quarter ended
February 28, 2002, we implemented a 10% wage cut which was supplemented with a corresponding 10% Emmis stock award. This
initiative reduced cash operating expenses by approximately $3.1 million for the year ended February 28, 2002.

Broadcast/publishing cash flow for the year ended February 28, 2002 was $185.7 million compared to $174.2 million for the same
period of the prior year, an increase of $11.5 million or 6.6%. On a pro forma basis, broadcast/publishing cash flow for the year
ended February 28, 2002 decreased $25.9 million or 12.2%. This pro forma decrease is due to decreased net revenues partially
offset by decreased operating expenses as discussed above.

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



    EBITDA before  certain  charges is defined as  broadcast/publishing  cash flow less  corporate  expenses.  EBITDA before certain
charges for the year ended  February 28, 2002 was $165.4  million  compared to $156.6 million for the same period of the prior year,
an increase of $8.8 million or 5.6%.  On a pro forma  basis,  EBITDA  before  certain  charges for the year ended  February 28, 2002
decreased  $28.6  million or 14.7%.  This pro forma  decrease  reflects  the pro forma  decrease in  broadcast/publishing  cash flow
coupled with the increase in corporate expenses.

    Depreciation and amortization  expense for the year ended February 28, 2002 was $100.3 million compared to $74.0 million for the
same period of the prior year,  an  increase  of $26.3  million or 35.5%.  Substantially  all of the  increase in  depreciation  and
amortization expense for the year ended February 28, 2002 is due to acquisitions consummated since March 1, 2000.

    Non-cash  compensation  expense for the year ended  February  28, 2002 was $9.1  million  compared to $5.4  million for the same
period of the prior year, an increase of $3.7 million or 68.4%.  Non-cash  compensation  includes  compensation  expense  associated
with stock options granted,  restricted common stock issued under employment  agreements,  common stock contributed to the Company's
Profit  Sharing  Plan and common  stock  issued to  employees  at our  discretion.  This  increase was due to the payment of certain
employee incentives with our common stock and stock issued to supplement the 10% wage reduction discussed above.

    In the twelve months ended February 28, 2002,  the Company  recorded an impairment  loss of $9.1 million  related to the sale of
KALC-FM to Entercom  Communications  Corporation,  effective May 1, 2002, and a $1.6 million charge related to the early termination
of certain  television  contracts.  In the twelve months ended  February 28, 2001, the Company  recorded an impairment  loss of $2.0
million related to the sale of WTLC-AM to Radio One, Inc.

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

    With respect to EOC,  interest expense was $104.1 million for the year ended February 28, 2002 compared to $72.4 million for the
same period of the prior year,  an increase  of $31.7  million or 43.8%.  This  increase  reflects  higher  outstanding  debt due to
acquisitions  consummated  since March 1, 2000,  partially  offset by lower  interest  rates on our floating  rate senior debt.  The
difference  between  interest  expense for Emmis and EOC is due to interest  expense  associated with the senior discount notes, for
which ECC is the obligor, and thus it is excluded from the operations of EOC.

    Other income for the twelve  months ended  February 28, 2002 was $1.3 million  compared to other income of $39.4 million for the
same  period of the prior year.  Other  income for the twelve  months  ended  February  28, 2001  includes a $22.0  million  gain on
exchange of assets,  offset by valuation  adjustments on certain investments and a $17.0 million break-up fee received in connection
with the sale of WALR-FM in Atlanta,  Georgia to Cox Radio,  Inc., net of related expenses.  The difference between other income for
Emmis ($1.3  million) and EOC ($0.4  million) for the year ended  February 28, 2002 relates to interest  income on $93.0  million of
cash held in escrow,  pending the  implementation  of the  restructuring  in connection with the senior discount notes issuance (see
Note 4 to our consolidated financial statements, Senior Discount Notes).

    With  respect to Emmis,  our  effective  tax rate for the year ended  February  28,  2002 was a benefit of 28.9%,  compared to a
provision of 56.2% for the same period of the prior year.  With respect to EOC, our effective  tax rate for the year ended  February
28,  2002 was a benefit of 27.6%,  compared to a  provision  of 56.2% for the same period of the prior year.  Both Emmis and EOC had
pre-tax  income in fiscal  2001  versus  pre-tax  losses in fiscal  2002 due to the factors  discussed  above.  The  variance in our
effective  tax rate from the  statutory  tax rate is due to  non-deductible  expenses,  primarily  consisting  of  certain  goodwill
amortization that is not deductible for tax purposes.

    During the twelve months ended February 28, 2002, EOC repaid $128.0 million of  indebtedness  under its credit  facility,  which
permanently  reduced amounts  available  thereunder.  As a result of the early payoff of the  indebtedness,  the Company recorded an
extraordinary loss of approximately $1.1 million, net of taxes, related to unamortized deferred debt costs.

YEAR ENDED FEBRUARY 28, 2001 COMPARED TO YEAR ENDED FEBRUARY 29, 2000. Net revenues for the year ended February 28, 2001 were
$470.6 million compared to $325.3 million for the same period of the prior year, an increase of $145.3 million or 44.7%. The
increase in net revenues for the year ended February 28, 2001 is primarily the result of the Country Sampler Acquisition, WKCF
Acquisition, Argentina Acquisition, Los Angeles Magazine Acquisition, AMFM Acquisition, Lee Acquisition, KZLA Acquisition,
Sinclair Acquisition, Salem Acquisition and our operation of radio stations KKLT-FM, KTAR-AM and KMVP-AM under time brokerage
agreements which we collectively refer to as our "Fiscal 2000-2001 Transactions." Excluding these transactions, net revenues for
the year ended February 28, 2001 would have increased $14.7 million or 4.8%. The remaining increase in net revenues is due to our
ability to realize higher advertising rates resulting from higher ratings at certain broadcasting properties, increases in general
radio spending in the markets in which we operate and our ability to sell more advertising in our publications.

Operating expenses for the year ended February 28, 2001 were $296.4 million compared to $199.8 million for the same period of
the prior year, an increase of $96.6 million or 48.3%. The increase in operating expenses for the year ended February 28, 2001 is
primarily the result of our Fiscal 2000-2001 Transactions. Excluding these transactions, operating expenses for the year ended
February 28, 2001 would have increased $3.6 million or 1.9%. This increase is principally due to higher advertising and
promotional spending at certain of our properties as well as an increase in sales related costs.

Broadcast/publishing cash flow for the year ended February 28, 2001 was $174.2 million compared to $125.4 million for the same
period of the prior year, an increase of $48.8 million or 38.9%. The increase in broadcast/publishing cash flow for the year
ended February 28, 2001 is primarily the result of our Fiscal 2000-2001 Transactions. Excluding these transactions,
broadcast/publishing cash flow for the year ended February 28, 2001 would have increased $11.1 million or 9.4%. This increase is
due to increased net revenues partially offset by increased operating expenses as discussed above.

Corporate expenses for the year ended February 28, 2001 were $17.6 million compared to $15.4 million for the same period of the
prior year, an increase of $2.2 million or 14.1%. These increases are due to an increase in the number of corporate employees in
all departments as a result of the growth of the Company.

EBITDA before certain charges is defined as broadcast/publishing cash flow less corporate and international development
expenses. EBITDA before certain charges for the year ended February 28, 2001 was $156.6 million compared to $110.0 million for
the same period of the prior year, an increase of $46.6 million or 42.4%. This increase was principally due to the increase in
broadcast/publishing cash flow partially offset by an increase in corporate expenses.

Interest expense was $72.4 million for the year ended February 28, 2001 compared to $52.0 million for the same period of the
prior year, an increase of $20.4 million or 39.4%. Included in interest expense for the twelve months ended February 28, 2001 is
$3.4 million for the amortization of debt fees related to our Bridge Loan. The remaining increase reflects higher outstanding
debt due to the Fiscal 2000-2001 Transactions.

Depreciation and amortization expense for the year ended February 28, 2001 was $74.0 million compared to $44.2 million for the
same period of the prior year, an increase of $29.8 million or 67.6%. Substantially all of the increase in depreciation and
amortization expense for the year ended February 28, 2001 relates to our Fiscal 2000-2001 Transactions.

Non-cash compensation expense for the year ended February 28, 2001 was $5.4 million compared to $7.4 million for the same
period of the prior year, a decrease of $2.0 million or 26.6%. Non-cash compensation includes compensation expense associated
with stock options granted, grants of restricted stock and common stock contributed to the Company's Profit Sharing Plan. The
decrease was principally due to a decline in the Company's stock price as compared to the prior year.

Other income for the twelve months ended February 28, 2001 was $39.3 million compared to other income of $4.2 million for the
same period of the prior year. Other income for the twelve months ended February 28, 2001 includes a $22.0 million gain on
exchange of assets, offset by valuation adjustments on certain investments and a $17.0 million break-up fee received in connection
with the sale of WALR-FM in Atlanta, Georgia to Cox Radio, Inc., net of related expenses.

Our effective tax rate for the year ended February 28, 2001 was 56.2%, compared to 77.5% for the same period of the prior
year. The decrease in our effective tax rate in the year ended February 28, 2001 primarily resulted from the relative impact of
the non-deductible tax items in relation to the change in pre-tax income.

LIQUIDITY AND CAPITAL RESOURCES

    CAPITAL REQUIREMENTS AND CAPITAL EXPENDITURES

    Our  primary  uses of capital  have  historically  been,  and are  expected to continue  to be,  funding  acquisitions,  capital
expenditures, working capital and debt service and, in the case of ECC, preferred stock dividend requirements.

    In the fiscal years ended February 2000, 2001 and 2002, we had capital  expenditures  of $29.3 million,  $26.2 million and $28.4
million,  respectively.  These capital expenditures primarily related to the KHON and WALA operating facilities projects,  leasehold
improvements to various office and studio facilities,  broadcast equipment  purchases,  tower upgrades and costs associated with our
conversion  to  digital  television.  We  anticipate  that  future  requirements  for  capital  expenditures  will  include  capital
expenditures  incurred  during  the  ordinary  course of  business,  including  approximately  $11  million  in fiscal  2003 for the
conversion  to digital  television.  Although we expect all of our  stations  will  broadcast a digital  signal by the end of fiscal
2003, we will incur additional  costs,  after fiscal 2003, to upgrade the digital signals of four of our local stations and our nine
satellite  stations.  We expect to fund such capital  expenditures  with cash  generated  from  operating  activities and borrowings
under our credit facility.

    OFF-BALANCE SHEET FINANCINGS AND LIABILITIES

    Other than lease commitments,  legal contingencies  incurred in the normal course of business,  agreements for future barter and
program rights not yet available for broadcast at February 28, 2002, and  employment  contracts for key employees,  all of which are
disclosed  in Note 9 to the  consolidated  financial  statements,  the Company does not have any  off-balance  sheet  financings  or
liabilities.  The  Company  does not have any  majority-owned  subsidiaries  that are not  included  in the  consolidated  financial
statements,  nor does the Company have any interests in or relationships with any "special-purpose  entities" that are not reflected
in the consolidated financial statements.

    SUMMARY DISCLOSURES ABOUT CONTRACTUAL CASH OBLIGATIONS

    The following table reflects a summary of our contractual cash obligations as of February 28, 2002:


                                                                           PAYMENTS DUE BY PERIOD
                                                                           (AMOUNTS IN THOUSANDS)

                                                                 Less Than         1 to 3            4 to 5           After 5
Contractual Cash Obligations:                    Total            1 Year            Years             Years            Years
-----------------------------               --------------    -------------     -------------    -------------     -------------

Long-term debt (1)                          $    1,622,000    $           -     $      93,583    $     160,491     $   1,367,926
Operating leases                                    50,037            7,959            12,148            9,641            20,289
TV program rights payable (2)                       68,058           27,507            23,310           11,055             6,186
Future TV program rights payable (2)                31,999            5,240            19,831            5,290             1,638
Radio broadcast agreements                           5,098            2,281             2,017              480               320
Employment agreements                               45,554           23,829            17,628            1,581             2,516
                                            --------------    -------------     -------------    -------------     -------------

Total Contractual Cash Obligations          $    1,822,746    $      66,816     $     168,517    $     188,538     $   1,398,875
                                            ==============    =============     =============    =============     =============

(1)  ECC's  senior  discount  notes  accrete to a face value of $370.0  million  in March 2006 and become due in March  2011.  As of
     February 28, 2002, the face value of the senior discount notes was $226.5  million.  With respect to EOC, the above table would
     be the same except ECC's senior  discount  notes would be excluded.  These  contractual  cash  obligations  are not adjusted to
     reflect  credit  facility debt repaid after  February 28, 2002 (See Note 4 to our  consolidated  financial  statements,  Credit
     Facility).

(2)  TV program rights payable  represents  payments to be made to various program  syndicators and  distributors in accordance with
     current contracts for the rights to broadcast  programs.  Future TV program rights payable  represents  commitments for program
     rights not available for broadcast as of February 28, 2002.

DEBT SERVICE AND PREFERRED STOCK DIVIDEND REQUIREMENTS

As of February 28, 2002, EOC had $1.252 billion of corporate indebtedness outstanding under its credit facility ($.952 billion,
of which $0.135 billion is classified as current)and senior subordinated notes ($0.3 billion), and an additional $14.9 million
of other indebtedness. As of February 28, 2002, total indebtedness outstanding for Emmis included all of EOC's indebtedness as
well as $226.5 million of senior discount notes. Emmis also had $143.8 million of convertible preferred stock outstanding. All
outstanding amounts under the credit facility bear interest, at our option, at a rate equal to the Eurodollar rate or an alternative
Base Rate plus a margin. As of February 28, 2002, EOC's weighted average borrowing rate under its credit facility, including
the effects of interest rate swaps (see discussion in Item 7a. below), was approximately 6.3% and the weighted average borrowing
rate, after taking into account amounts outstanding under the senior subordinated notes, was approximately 6.8%. Emmis' weighted
average borrowing rate, which includes the senior discount notes, was approximately 7.6%.

Based on amounts currently outstanding under our senior subordinated notes, the debt service requirements of EOC for these notes
over the next twelve-month period are $24.4 million. ECC has no additional debt service requirements in the next twelve-month
period since interest on its senior discount notes accretes into the principal balance of the notes until March 2006. However,
ECC has preferred stock dividend requirements of $9.0 million for the next twelve-month period. The terms of ECC's preferred stock
provide for a quarterly dividend payment of $.78125 per share on each January 15, April 15, July 15 and October 15. While Emmis
has sufficient liquidity to declare and pay the dividends as they become due, it was not permitted to do so for the October 15,
2001, January 15, 2002 and April 15, 2002 payments. Emmis' leverage ratio under the senior discount notes indenture exceeded 8:1
for the October, January and April payments. Its leverage ratio under the senior subordinated notes indenture exceeded 7:1 for
the January and April payments. For each of these dividend dates, ECC's board of directors set the record date, but did not
declare the dividend. Instead, on each payment date a wholly-owned, unrestricted subsidiary of EOC made a payment of $.78125 per
share to each preferred shareholder of record. This subsidiary was permitted to make the payment to the preferred shareholders
under the senior discount notes and senior subordinated notes indentures. Currently, Emmis meets its leverage ratio requirements
under the senior subordinated notes and expects to meet its leverage ratio requirements under the senior discount notes upon
application of its April 2002 equity proceeds (see Sources of Liquidity). We expect ECC's board of directors to declare each
dividend and deem the obligation to pay each dividend to have been discharged by the subsidiary's prior payment. We also expect
our board of directors to declare, and for Emmis to pay, the July 15, 2002 dividend in the ordinary course of business.

SOURCES OF LIQUIDITY

Our primary sources of liquidity are cash provided by operations and funds available under our credit facility. At February
28, 2002, we had cash and cash equivalents of $6.4 million and net working capital of $19.8 million, excluding assets held for
sale. At February 28, 2001, we had cash and cash equivalents of $59.9 million and net working capital of $97.9 million, excluding
assets held for sale. With respect to EOC, net working capital, excluding assets held for sale, was $21.0 million at February 28,
2002 and $97.9 million at February 28, 2001. We typically use our excess cash to repay amounts outstanding under our credit
facility. We had a large cash balance as of February 28, 2001 due to borrowings under term loans when we refinanced our credit
facility in December 2000, which was used to close our acquisition of three radio stations in March 2001. The decrease in net
working capital from February 28, 2001 to February 28, 2002 was due to the decrease in cash described above and the collection of
tax refunds receivable (related cash collected was used to repay outstanding debt). In December 2001, Emmis instituted a 10% pay
cut for substantially all of its non-contract employees and also began a stock compensation program under its 2001 Equity
Incentive Plan. We expect the stock compensation program, which currently extends through December 2002, to result in reductions
of approximately $14 million in Emmis' cash compensation expense, $11 million of which will be reflected in fiscal 2003. We
expect to issue approximately 0.8 million shares during the first year of the plan. While no formal decisions have been made, it
is likely that the program will continue in some form during the next fiscal year. On April 30, 2002, we had $220.0 million
available under our credit facility, less $6.6 million in outstanding letters of credit.

In April 2002, ECC completed the sale of 4.6 million shares of its Class A common stock at $26.80 per share resulting in total
proceeds of $123.3 million. The net proceeds of $120.2 were contributed to EOC, of which 50% were used to repay outstanding
obligations under the credit facility. The remaining net proceeds were invested and will either repay outstanding obligations
under the credit facility or redeem or repurchase some of Emmis' outstanding 121/2% senior discount notes.

Effective May 1, 2002 Emmis completed the sale of substantially all of the assets of KALC-FM in Denver, Colorado to Entercom
Communications Corporation for $88.0 million. Also effective May 1, 2002 Emmis completed the sale of substantially all of the
assets of KXPK-FM in Denver, Colorado to Entravision Communications Corporation for $47.5 million. The proceeds from the sale of
these stations were used to repay outstanding obligations under the credit facility.

In connection with the $255.7 million of completed or planned debt repayments described above, Emmis expects to write-off
approximately $4 million of deferred debt costs in the first quarter of our fiscal 2003.

As part of our business strategy, we continually evaluate potential acquisitions of radio and television stations, as well as
publishing properties. If we elect to take advantage of future acquisition opportunities, we may incur additional debt or issue
additional equity or debt securities, depending on market conditions and other factors.

INTANGIBLES

At February 28, 2002, approximately 78% of our total assets consisted of intangible assets, such as FCC broadcast licenses,
goodwill, subscription lists and similar assets, the value of which depends significantly upon the operational results of our
businesses. In the case of our radio and television stations, we would not be able to operate the properties without the related
FCC license for each property. FCC licenses are renewed every eight years; consequently, we continually monitor the activities of
our stations for compliance with all regulatory requirements. Historically, all of our licenses have been renewed at the end of
their respective eight-year periods, and we expect that all FCC licenses will continue to be renewed in the future.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the FASB issued SFAS No. 142 "Goodwill and Other Intangible Assets" that requires companies to cease amortizing
goodwill and certain other indefinite-lived intangible assets, including broadcast licenses. Under SFAS 142, goodwill and certain
indefinite-lived intangibles will not be amortized into results of operations, but instead the recorded value of certain
indefinite-lived intangibles including broadcast licenses will be tested for impairment at least annually with impairment being
measured as the excess of the asset's carrying amount over its fair value. Goodwill will also be tested for impairment at least
annually. Intangible assets that have finite useful lives will continue to be amortized over their useful lives and measured for
impairment in accordance with SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." We adopted SFAS 142 and
began our impairment review on March 1, 2002. We have engaged an independent appraiser to conduct valuations of our
indefinite-lived intangible assets and expect to complete our review after the valuations are completed at the end of May 2002.
As of February 28, 2002, we had net unamortized goodwill and broadcast licenses in the amount of $175.2 million and $1,878.3
million, respectively. The adoption of SFAS 142 will eliminate our amortization of goodwill and indefinite-lived intangibles,
which was approximately $41.8 million and $61.2 million in the years ended February 28, 2001 and 2002, respectively. While this
expense will no longer be reflected on future financial statements, it remains deductible for federal income tax purposes. We
expect that our impairment review, once it is completed, will result in write-downs of some of our goodwill and indefinite-lived
intangibles, but we cannot currently determine the amount of the write-downs. However, we believe the write-down may be
material. Upon adoption, any transitional impairment loss recognized under SFAS 142 will be reported as the cumulative effect of
a change of accounting principle in our consolidated statements of operations. After initial adoption, any impairment losses
under SFAS 142 or 144 will be recorded as operating expenses.

In August 2001, the FASB issued SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets", which
establishes a single model to account for impairment of assets to be held or disposed, incorporating guidelines for accounting and
disclosure of discontinued operations . This statement supercedes SFAS 121 and was adopted by the Company on March 1, 2002. The
adoption of SFAS 144 did not have a material impact on our results of operations or financial position.

SEASONALITY

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

INFLATION

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

FORWARD-LOOKING STATEMENTS

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

Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking
statements we make. We have included important facts in various cautionary statements in this report that we believe could cause
our actual results to differ materially from forward-looking statements that we make. These include, but are not limited to, the
following:

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

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

o the ability of our stations to attract programming and our magazines to attract writers and photographers;

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

o competition from other media and the impact of significant competition for advertising revenues from other media;
o future regulatory actions and conditions in the operating areas of our company;

o the level of our capital expenditures and whether our programming and other expenses increase at a rate faster than
expected;

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

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

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

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

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

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

GENERAL

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

On June 15, 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended
in June of 2000 by SFAS No. 138, "Accounting for Derivative Instruments and Hedging Activities." These statements, which were
effective for Emmis on March 1, 2001, establish accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts. These statements require that every derivative instrument be recorded in the
balance sheet as either an asset or a liability measured at its fair value. Changes in the fair value of derivatives are to be

recorded each period in earnings or comprehensive income, depending on whether the derivative is designated and effective as part
of a hedged transaction, and on the type of hedge transaction. Gains or losses on derivative instruments reported in the other
comprehensive income must be reclassified as earnings in the period in which earnings are affected by the underlying hedged item,
and the ineffective portion of all hedges must be recognized in earnings in the current period. These standards result in
additional volatility in reported assets, liabilities, earnings and other comprehensive income.

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

SFAS No. 133 further requires that the fair value and effectiveness of each hedging instrument must be measured quarterly.
The result of each measurement could result in fluctuations in reported assets, liabilities, other comprehensive income and
earnings as these changes in fair value and effectiveness are recorded to the financial statements. For the year ended February
28, 2002, the fluctuations to the aforementioned areas were immaterial to the financial statements taken as a whole and we
anticipate an immaterial effect on an ongoing basis.

INTEREST RATES

At February 28, 2002, the entire outstanding balance under our credit facility, or approximately 76% of EOC's total
outstanding debt (credit facility and senior subordinated debt) and 64% of Emmis' total outstanding debt (EOC's debt plus our
senior discount notes) bears interest at variable rates. Emmis currently hedges a portion of its outstanding debt with interest
rate swap arrangements that effectively set the credit facility's underlying base rate at a weighted average rate of 4.94% on the
three-month LIBOR for agreements in place as of February 28, 2002. The credit facility requires EOC to have fixed interest rates
for a two year period on at least 50% of its total outstanding debt, as defined (including the senior subordinated debt). After
the first two years, this ratio of fixed to floating rate debt must be maintained if EOC's total leverage ratio, as defined, is
greater than 6:1 at any quarter end. The notional amount of the interest rate swap agreements at February 28, 2002 totaled $350.0
million, and the agreements expire at various dates beginning February 3, 2003 to February 8, 2004.

Based on amounts outstanding at February 28, 2002, if the interest rate on our variable debt, including the effect of interest
rate swaps, were to increase by 1.0%, our annual interest expense would be higher by approximately $6.0 million.

FOREIGN CURRENCY

Emmis owns a 59.5% interest in a Hungarian subsidiary which is consolidated in the accompanying financial statements. This
subsidiary's operations are measured in its local currency (forint). Emmis has a natural hedge since some of the subsidiary's
long-term obligations are denominated in Hungarian forints. Emmis owns a 75% interest in an Argentinean subsidiary which is
consolidated in the accompanying financial statements. This subsidiary's operations are measured in its local currency (peso),
which until January 2002, was tied to the U.S. dollar through the Argentine government's convertibility plan. In January 2002,
the Argentine government allowed the peso to devalue and trade against the U.S. dollar independently. While Emmis management
cannot predict the most likely average or end-of-period peso to dollar, or forint to dollar, exchange rates for calendar 2002, we
believe any further devaluation of the forint or peso would have an immaterial effect on our financial statements taken as a
whole, as the Hungarian and Argentine stations accounted for approximately 1% of Emmis' broadcast cash flow, approximately 3% of
Emmis' total revenues and less than 1% of Emmis' total assets as of, and for the year ended, February 28, 2002.

Both subsidiaries have or have had outstanding loans denominated in U.S. dollars. In fiscal 2002, the Hungarian subsidiary
repaid $1.2 million in dollar denominated loans and at February 28, 2002 has $0.7 million outstanding. Also in fiscal 2002 and
subsequent to the devaluation of the peso, the Argentinean subsidiary repaid $2.5 million in dollar denominated loans and as of
February 28, 2002 has no dollar denominated loans outstanding. No gain or loss resulted from these transactions on a consolidated
basis.

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



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

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

                                                                             FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                              ------------------------------------------------------------------
                                                                     2000                    2001                    2002
                                                              ------------------      ------------------      ------------------



GROSS REVENUES                                                $          380,995      $          550,073      $          614,414

LESS AGENCY COMMISSIONS                                                   55,730                  79,455                  80,634
                                                              ------------------      ------------------      ------------------

NET REVENUES                                                             325,265                 470,618                 533,780
   Operating expenses                                                    199,818                 296,405                 348,115
   Corporate expenses                                                     15,430                  17,601                  20,283
   Time brokerage fees                                                         -                   7,344                     479
   Depreciation and amortization                                          44,161                  74,018                 100,258
   Non-cash compensation                                                   7,357                   5,400                   9,095
   Restructuring fees                                                        896                   2,057                     768
   Impairment loss and other                                                   -                   2,000                  10,672
                                                              ------------------      ------------------      ------------------


OPERATING INCOME                                                          57,603                  65,793                  44,110
                                                              ------------------      ------------------      ------------------

OTHER INCOME (EXPENSE):
   Interest expense                                                      (51,986)                (72,444)               (129,100)
   Loss on donation of radio station                                        (956)                      -                       -
   Gain (loss) in unconsolidated affiliates                                    -                  (1,360)                 (5,003)
   Other income, net                                                       4,203                  39,397                   1,346
                                                              ------------------      ------------------      ------------------
    Total other income (expense)                                         (48,739)                (34,407)               (132,757)
                                                              ------------------      ------------------      ------------------

INCOME (LOSS) BEFORE INCOME TAXES
   AND EXTRAORDINARY ITEM                                                  8,864                  31,386                 (88,647)
PROVISION (BENEFIT) FOR INCOME TAXES                                       6,875                  17,650                 (25,623)
                                                              ------------------      ------------------      ------------------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS                                    1,989                  13,736                 (63,024)
EXTRAORDINARY LOSS, NET OF TAX                                             2,022                       -                   1,084
                                                              ------------------      ------------------      ------------------
NET INCOME (LOSS)                                                            (33)                 13,736                 (64,108)
PREFERRED STOCK DIVIDENDS                                                  3,144                   8,984                   8,984
                                                              ------------------      ------------------      ------------------
NET INCOME (LOSS) AVAILABLE TO COMMON
   SHAREHOLDERS                                               $           (3,177)      $            4,752      $         (73,092)
                                                              ==================       ==================      =================

BASIC AND DILUTED EARNINGS (LOSS)
   PER COMMON SHARE:
   Before extraordinary item                                  $            (0.03)      $             0.10      $           (1.52)
   Extraordinary item, net of tax                                          (0.06)                       -                  (0.02)
                                                              ------------------       ------------------      -----------------
   Net income (loss) available to common
    shareholders                                              $           (0.09)      $              0.10      $           (1.54)
                                                              =================       ===================      =================


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


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

                                                                                                       FEBRUARY 28,
                                                                                          --------------------------------------
                                                                                                2001                  2002
                                                                                          ----------------      ----------------

ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                                             $         59,899      $          6,362
    Accounts receivable, net of allowance for
     doubtful accounts of $2,202 and $2,800, respectively                                           97,281                95,240
    Current portion of TV program rights                                                            12,028                 9,837
    Income tax refunds receivable                                                                   13,970                     -
    Prepaid expenses                                                                                17,005                14,847
    Other                                                                                           14,832                13,820
    Assets held for sale                                                                           134,983               123,416
                                                                                          ----------------      ----------------
              Total current assets                                                                 349,998               263,522
                                                                                          ----------------      ----------------

PROPERTY AND EQUIPMENT:
    Land and buildings                                                                              84,983                88,209
    Leasehold improvements                                                                          12,299                12,341
    Broadcasting equipment                                                                         136,312               151,496
    Office equipment and automobiles                                                                44,553                49,160
    Construction in progress                                                                        10,560                16,735
                                                                                          ----------------      ----------------
                                                                                                   288,707               317,941
    Less- Accumulated depreciation and amortization                                                 56,874                86,802
                                                                                          ----------------      ----------------
              Total property and equipment, net                                                    231,833               231,139
                                                                                          ----------------      ----------------

INTANGIBLE ASSETS:
    Broadcast licenses                                                                           1,736,398             1,891,741
    Excess of cost over fair value of net
     assets of purchased businesses                                                                204,462               204,429
    Other intangibles                                                                               33,591                41,135
                                                                                          ----------------      ----------------
                                                                                                 1,974,451             2,137,305
    Less- Accumulated amortization                                                                 122,192               183,974
                                                                                          ----------------      ----------------
              Total intangible assets, net                                                       1,852,259             1,953,331
                                                                                          ----------------      ----------------

OTHER ASSETS:
    Deferred debt issuance costs, net of accumulated
     amortization of $5,729 and $12,227, respectively                                               29,448                37,745
    TV program rights, net of current portion                                                        6,509                 8,818
    Investments                                                                                     11,287                12,315
    Deposits and other                                                                              25,538                 3,199
                                                                                          ----------------      ----------------
     Total other assets, net                                                                        72,782                62,077
                                                                                          ----------------      ----------------

              Total assets                                                                 $     2,506,872      $      2,510,069
                                                                                          ================      ================




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


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


                                                                                                       FEBRUARY 28,
                                                                                          --------------------------------------
                                                                                                2001                  2002
                                                                                          ----------------      ----------------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                                      $         34,206      $         38,995
    Current maturities of other long-term debt                                                       4,187                 7,933
    Current portion of TV program rights payable                                                    28,192                27,507
    Accrued salaries and commissions                                                                10,342                 7,852
    Accrued interest                                                                                17,038                14,068
    Deferred revenue                                                                                17,397                16,392
    Other                                                                                            5,768                 7,531
    Credit facility debt to be repaid with proceeds
      of assets held for sale                                                                            -               135,000
    Liabilities associated with assets held for sale                                                    21                    63
                                                                                          ----------------      ----------------
              Total current liabilities                                                            117,151               255,341

CREDIT FACILITY AND SENIOR SUBORDINATED DEBT                                                     1,380,000             1,117,000
SENIOR DISCOUNT NOTES                                                                                    -               226,507
OTHER LONG-TERM DEBT, NET OF CURRENT PORTION                                                        13,684                 6,949
TV PROGRAM RIGHTS PAYABLE, NET OF CURRENT PORTION                                                   47,567                40,551
OTHER NONCURRENT LIABILITIES                                                                         5,531                26,966
DEFERRED INCOME TAXES                                                                              135,468               101,198
                                                                                          ----------------      ----------------
              Total liabilities                                                                  1,699,401             1,774,512
                                                                                          ----------------      ----------------

COMMITMENTS AND CONTINGENCIES (NOTE 9)

SHAREHOLDERS' EQUITY:

    Series A cumulative convertible preferred stock, $0.01
     par value; $50.00 liquidation value; authorized 10,000,000
     shares; issued and outstanding 2,875,000 shares in 2001
     and 2002                                                                                           29                    29
    Class A common stock, $.01 par value; authorized 170,000,000
     shares; issued and outstanding 41,900,315 shares and
     42,761,299 shares in 2001 and 2002, respectively                                                  419                   428
    Class B common stock, $.01 par value; authorized 30,000,000
     shares; issued and outstanding 5,230,396 shares and
     5,250,127 shares in 2001 and 2002, respectively                                                    52                    53
    Additional paid-in capital                                                                     830,299               843,254
    Accumulated deficit                                                                            (22,730)              (95,822)
    Accumulated other comprehensive income                                                            (598)              (12,385)
                                                                                          ----------------      ----------------
              Total shareholders' equity                                                           807,471               735,557
                                                                                          ----------------      ----------------

              Total liabilities and shareholders' equity                                  $      2,506,872      $      2,510,069
                                                                                          ================      ================


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


                                         EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                            FOR THE THREE YEARS ENDED FEBRUARY 28, 2002
                                             (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                                  Class A                        Class B                       Series A
                                               Common Stock                   Common Stock                  Preferred Stock
                                        --------------------------     --------------------------    ---------------------------

                                             Shares                       Shares                       Shares
                                           Outstanding      Amount      Outstanding       Amount     Outstanding         Amount
                                        ---------------     ------      -----------     ---------    -----------         -------

BALANCE, FEBRUARY 28, 1999                   26,380,414     $  264           5,164,530    $    52                   -    $     -

Issuance of Class A Common stock in
  exchange for Class B common stock             505,668          5            (505,668)       (5)                   -          -
Exercise of stock options and
  related income tax benefits                   886,496          9              79,720          -                   -          -
Issuance of Class A common
  stock to profit sharing plan                   34,246          -                   -          -                   -          -
Issuance of Class A common stock to
  employees and officers and related
  income tax benefits                            41,987          -                   -          -                   -          -
Sale of Class A common stock, net
  of costs incurred of $14,430               13,384,000        134                   -          -                   -          -
Sale of Series A cumulative
  convertible preferred stock, net
  of costs incurred of  $5,341                        -          -                   -          -           2,875,000         29
Preferred stock dividends paid                        -          -                   -          -                   -          -

Comprehensive Income:
Net income (loss)                                     -          -                   -          -                   -          -
Cumulative translation adjustment                     -          -                   -          -                   -          -
Total comprehensive income                            -          -                   -          -                   -          -
                                        ---------------     ------     ---------------    -------    ----------------    -------
BALANCE, FEBRUARY 29, 2000                   41,232,811        412           4,738,582         47           2,875,000         29
                                        ---------------     ------     ---------------    -------    ----------------    -------

Issuance of Class A Common stock in
  exchange for Class B common stock              17,875          -             (17,875)         -                   -          -
Exercise of stock options and
  related income tax benefits                   482,991          5             509,689          5                   -          -
Issuance of Class A common
  stock to profit sharing plan                   47,281          1                   -          -                   -          -
Issuance of Class A common stock to
  employees and officers and related
  income tax benefits                            82,688          1                   -          -                   -          -
Sale of Class A common stock
  to employees through ESPP                      36,669          -                   -          -                   -          -
Preferred stock dividends paid                        -          -                   -          -                   -          -

Comprehensive Income:
Net income (loss)                                     -          -                   -          -                   -          -
Cumulative translation adjustment                     -          -                   -          -                   -          -
Total comprehensive income                            -          -                   -          -                   -          -
                                        ---------------     ------     ---------------    -------    ----------------    -------
BALANCE, FEBRUARY 28, 2001                   41,900,315        419           5,230,396         52           2,875,000         29
                                        ---------------     ------     ---------------    -------    ----------------    -------

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

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

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


                                           EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - (CONTINUED)
                                            FOR THE THREE YEARS ENDED FEBRUARY 28, 2002
                                             (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

                                                                                               Accumulated
                                                        Additional                                Other               Total
                                                          Paid-in           Accumulated       Comprehensive       Shareholders'
                                                          Capital             Deficit            Income              Equity
                                                     ----------------    ---------------     ---------------    ----------------
BALANCE, FEBRUARY 28, 1999                           $        260,186    $       (24,305)    $         (648)    $        235,549

Issuance of Class A Common stock in
  exchange for Class B common stock                                 -                  -                   -                   -
Exercise of stock options and
  related income tax benefits                                  16,761                  -                   -              16,770
Issuance of Class A common
  stock to profit sharing plan                                  1,250                  -                   -               1,250
Issuance of Class A common stock
  to employees and officers and related
  income tax benefits                                           4,807                  -                   -               4,807
Sale of Class A common stock, net
  of costs incurred of $14,430                                383,436                  -                   -             383,570
Sale of Series A cumulative
  convertible preferred stock, net
  of costs incurred of $5,341                                 138,380                  -                   -             138,409
Preferred stock dividends paid                                      -             (3,144)                  -              (3,144)

Comprehensive Income:
Net income (loss)                                                   -               (33)                   -                   -
Cumulative translation adjustment                                   -                  -                (811)                  -
Total comprehensive income                                          -                  -                   -                (844)
                                                     ----------------    ---------------     ---------------    ----------------
BALANCE, FEBRUARY 29, 2000                                    804,820            (27,482)             (1,459)            776,367
                                                     ----------------    ---------------     ---------------    ----------------

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

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

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

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

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


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

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                           ---------------     ---------------     ---------------

OPERATING ACTIVITIES:
   Net income (loss)                                                       $           (33)    $        13,736     $       (64,108)
   Adjustments to reconcile net income (loss)
     to net cash provided by operating activities -
       Extraordinary item                                                            2,022                   -               1,084
       Depreciation and amortization                                                53,818              94,454             124,335
       Accretion of interest on senior discount notes,
         including amortization of related debt costs                                    -                   -              24,998
       Provision for bad debts                                                       2,550               3,713               4,005
       Provision (benefit) for deferred income taxes                                 6,670              15,810             (25,623)
       Non-cash compensation                                                         7,357               5,400               9,095
       Loss on donation of radio station                                               956                   -                   -
       Gain on exchange of assets                                                        -             (22,000)                  -
       Impairment of asset                                                               -                   -               9,063
       Tax benefits of exercise of stock options                                     2,889              10,859                 999
       Other                                                                          (783)              1,464              (5,928)
   Changes in assets and liabilities -
       Accounts receivable                                                         (13,319)             (9,316)             (2,118)
       Prepaid expenses and other current assets                                   (14,546)            (24,627)              5,127
       Other assets                                                                 (2,507)             12,099              (5,953)
       Accounts payable and accrued liabilities                                     10,165              15,341              (2,709)
       Deferred revenue                                                              4,332                 569                (963)
       Other liabilities                                                           (33,211)            (19,772)             (1,927)
                                                                            --------------     ---------------     ---------------
         Net cash provided by operating activities                                  26,360              97,730              69,377
                                                                           ---------------     ---------------     ---------------

INVESTING ACTIVITIES:
   Purchases of property and equipment                                             (29,316)            (26,225)            (28,416)
   Cash paid for acquisitions                                                     (231,130)         (1,060,681)           (140,746)
   Deposits on acquisitions and other                                              (11,500)            (23,849)             (5,943)
                                                                           ---------------     ---------------     ---------------
       Net cash used in investing activities                                      (271,946)         (1,110,755)           (175,105)
                                                                           ---------------     ---------------     ---------------

FINANCING ACTIVITIES:
   Payments on long-term debt                                                     (426,668)         (1,051,549)           (133,000)
   Proceeds from long-term debt                                                    149,668           2,128,388               5,000
   Proceeds from the issuance of the Company's Class A
     common stock, net of transaction costs                                        383,570                   -                   -
   Proceeds from the issuance the Company's Series A
     cumulative convertible preferred stock, net of
     transaction costs                                                             138,409                   -                   -
   Proceeds from senior discount notes offering                                          -                   -             202,612
   Proceeds from exercise of stock options
     and employee stock purchases                                                   13,881               8,794               3,189
   Payments for debt related costs                                                       -             (21,095)            (16,626)
   Preferred stock dividends                                                       (2,021)              (8,984)             (8,984)
                                                                           --------------      ---------------     ---------------
     Net cash provided by financing activities                                     256,839           1,055,554              52,191
                                                                           ---------------     ---------------     ---------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                    11,253              42,529             (53,537)

CASH AND CASH EQUIVALENTS:
   Beginning of period                                                               6,117              17,370              59,899
                                                                           ---------------     ---------------     ---------------
   End of period                                                           $        17,370     $        59,899     $         6,362
                                                                           ===============     ===============     ===============


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


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

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                          ----------------     ---------------     ---------------

SUPPLEMENTAL DISCLOSURES:
   Cash paid for-
     Interest                                                              $        41,735     $        58,362     $        99,824
     Income taxes                                                                    9,589                 550               1,281
   Non- cash investing and financing transactions-
     Preferred stock dividends accrued                                               1,123                   -                   -


ACQUISITION OF COUNTRY SAMPLER:
  Fair value of assets acquired                                            $        25,608
  Cash paid                                                                         18,954
                                                                           ---------------
  Liabilities recorded                                                     $         6,654
                                                                           ===============

ACQUISITION OF WKCF-TV:
  Fair value of assets acquired                                            $       246,445
  Cash paid                                                                        197,105
                                                                           ---------------
  Liabilities recorded                                                     $        49,340
                                                                           ===============

ACQUISITION OF VOTIONIS, S.A:
  Fair value of assets acquired                                            $        18,936
  Cash paid                                                                         13,302
                                                                           ---------------
  Liabilities recorded                                                     $         5,634
                                                                           ===============

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

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

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

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


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


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

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000               2001                2002
                                                                          ----------------     ---------------     ---------------

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

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

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



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


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

                                                                             FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                              ------------------------------------------------------------------

                                                                     2000                    2001                    2002
                                                              ------------------      ------------------      ------------------

GROSS REVENUES                                                $          380,995      $          550,073      $          614,414

LESS AGENCY COMMISSIONS                                                   55,730                  79,455                  80,634
                                                              ------------------      ------------------      ------------------

NET REVENUES                                                             325,265                 470,618                 533,780
   Operating expenses                                                    199,818                 296,405                 348,115
   Corporate expenses                                                     15,430                  17,601                  20,283
   Time brokerage fees                                                         -                   7,344                     479
   Depreciation and amortization                                          44,161                  74,018                 100,258
   Non-cash compensation                                                   7,357                   5,400                   9,095
   Restructuring fees                                                        896                   2,057                     768
   Impairment loss and other                                                   -                   2,000                  10,672
                                                              ------------------      ------------------      ------------------

OPERATING INCOME                                                          57,603                  65,793                  44,110
                                                              ------------------      ------------------      ------------------

OTHER INCOME (EXPENSE):
   Interest expense                                                      (51,986)                (72,444)               (104,102)
   Loss on donation of radio station                                       (956)                       -                       -
   Gain (loss) in unconsolidated affiliates                                    -                  (1,360)                 (5,003)
   Other income, net                                                       4,203                  39,397                     360
                                                              ------------------      ------------------      ------------------
    Total other income (expense)                                         (48,739)                (34,407)               (108,745)
                                                              ------------------      ------------------      ------------------

INCOME (LOSS) BEFORE INCOME TAXES
   AND EXTRAORDINARY ITEM                                                  8,864                  31,386                 (64,635)
PROVISION (BENEFIT) FOR INCOME TAXES                                       6,875                  17,650                 (17,833)
                                                              ------------------      ------------------      ------------------
INCOME (LOSS) BEFORE EXTRAORDINARY LOSS                                    1,989                  13,736                 (46,802)
EXTRAORDINARY LOSS, NET OF TAX                                             2,022                       -                   1,084
                                                              ------------------      ------------------      ------------------
NET INCOME (LOSS)                                             $              (33)     $           13,736      $          (47,886)
                                                               =================       =================       =================


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



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

                                                                                                       FEBRUARY 28,
                                                                                          --------------------------------------
                                                                                                2001                  2002
                                                                                          ----------------      ----------------

ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                                             $         59,899      $          6,362
    Accounts receivable, net of allowance for
     doubtful accounts of $2,202 and $2,800, respectively                                           97,281                95,240
    Current portion of TV program rights                                                            12,028                 9,837
    Income tax refunds receivable                                                                   13,970                     -
    Prepaid expenses                                                                                17,005                14,847
    Other                                                                                           14,832                13,820
    Current assets held for sale                                                                   134,983               123,416
                                                                                          ----------------      ----------------
              Total current assets                                                                 349,998               263,522
                                                                                          ----------------      ----------------

PROPERTY AND EQUIPMENT:
    Land and buildings                                                                              84,983                88,209
    Leasehold improvements                                                                          12,299                12,341
    Broadcasting equipment                                                                         136,312               151,496
    Office equipment and automobiles                                                                44,553                49,160
    Construction in progress                                                                        10,560                16,735
                                                                                          ----------------      ----------------
                                                                                                   288,707               317,941
    Less- Accumulated depreciation and amortization                                                 56,874                86,802
                                                                                          ----------------      ----------------
              Total property and equipment, net                                                    231,833               231,139
                                                                                          ----------------      ----------------

INTANGIBLE ASSETS:
    Broadcast licenses                                                                           1,736,398             1,891,741
    Excess of cost over fair value of net
     assets of purchased businesses                                                                204,462               204,429
    Other intangibles                                                                               33,591                41,135
                                                                                          ----------------      ----------------
                                                                                                 1,974,451             2,137,305
    Less- Accumulated amortization                                                                 122,192               183,974
                                                                                          ----------------      ----------------
              Total intangible assets, net                                                       1,852,259             1,953,331
                                                                                          ----------------      ----------------

OTHER ASSETS:
    Deferred debt issuance costs, net of accumulated
     amortization of $5,729 and $11,122, respectively                                               29,448                26,815
    TV program rights, net of current portion                                                        6,509                 8,818
    Investments                                                                                     11,287                12,315
    Deposits and other                                                                              25,538                 3,199
                                                                                          ----------------      ----------------
     Total other assets, net                                                                        72,782                51,147
                                                                                          ----------------      ----------------

              Total assets                                                                 $     2,506,872      $      2,499,139
                                                                                          ================      ================




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


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


                                                                                                       FEBRUARY 28,
                                                                                          --------------------------------------
                                                                                                2001                  2002
                                                                                          ----------------      ----------------


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                                      $         34,206      $         38,995
    Current maturities of other long-term debt                                                       4,187                 7,933
    Current portion of TV program rights payable                                                    28,192                27,507
    Accrued salaries and commissions                                                                10,342                 7,852
    Accrued interest                                                                                17,038                14,068
    Deferred revenue                                                                                17,397                16,392
    Other                                                                                            5,768                 6,408
    Credit facility debt to be repaid with proceeds
      of assets held for sale                                                                            -               135,000
    Current liabilities held for sale                                                                   21                    63
                                                                                          ----------------      ----------------
              Total current liabilities                                                            117,151               254,218

CREDIT FACILITY AND SENIOR SUBORDINATED DEBT                                                     1,380,000             1,117,000
OTHER LONG-TERM DEBT, NET OF CURRENT PORTION                                                        13,684                 6,949
TV PROGRAM RIGHTS PAYABLE, NET OF CURRENT PORTION                                                   47,567                40,551
OTHER NONCURRENT LIABILITIES                                                                         5,531                26,966
DEFERRED INCOME TAXES                                                                              135,468               108,988
                                                                                          ----------------      ----------------
              Total liabilities                                                                  1,699,401             1,554,672
                                                                                          ----------------      ----------------

COMMITMENTS AND CONTINGENCIES (NOTE 9)

SHAREHOLDERS' EQUITY:

    Common stock, no par value; authorized, issued
     and outstanding 1,000 shares at February 28,
      2001 and 2002                                                                                830,799             1,027,221
    Additional paid-in capital                                                                           -                 8,108
    Accumulated deficit                                                                            (22,730)              (78,477)
    Accumulated other comprehensive income                                                            (598)              (12,385)
                                                                                          ----------------      ----------------
              Total shareholders' equity                                                           807,471               944,467
                                                                                          ----------------      ----------------

              Total liabilities and shareholders' equity                                  $      2,506,872      $      2,499,139
                                                                                          ================      ================




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


                                              EMMIS OPERATING COMPANY AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                            FOR THE THREE-YEARS ENDED FEBRUARY 28, 2002
                                             (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


                                                    Common Stock
                                             -------------------------                               Accumulated
                                                                           Additional                   Other            Total
                                                 Shares                     Paid-in    Accumulated  Comprehensive     Shareholders'
                                              Outstanding      Amount       Capital      Deficit       Income           Equity
                                            --------------  ----------     --------   ------------  --------------   -------------

BALANCE, FEBRUARY 28, 1999                           1,000  $  260,502     $      -   $    (24,305)   $         (648)  $    235,549


Distributions to parent                                  -           -            -         (3,144)                -         (3,144)
Contributions from parent                                -     544,806            -              -                 -        544,806

Comprehensive Income:
Net income (loss)                                        -           -            -            (33)                -
Cumulative translation adjustment                        -           -            -              -              (811)
Total comprehensive income                               -           -            -              -                 -           (844)
                                             -------------  ----------     --------   ------------   ---------------  -------------
BALANCE, FEBRUARY 29, 2000                           1,000     805,308            -        (27,482)           (1,459)       776,367
                                             -------------  ----------     --------   ------------   ---------------  -------------

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

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

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

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



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



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

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                           ---------------     ---------------     ---------------

OPERATING ACTIVITIES:
   Net income (loss)                                                       $          (33)     $        13,736     $       (47,886)
   Adjustments to reconcile net income (loss)
     to net cash provided by operating activities -
       Extraordinary item                                                            2,022                   -               1,084
       Depreciation and amortization                                                53,818              94,454             124,335
       Provision for bad debts                                                       2,550               3,713               4,005
       Provision (benefit) for deferred income taxes                                 6,670              15,810             (17,833)
       Non-cash compensation                                                         7,357               5,400               9,095
       Loss on donation of radio station                                               956                   -                   -
       Gain on exchange of assets                                                        -             (22,000)                  -
       Impairment of asset                                                               -                   -               9,063
       Other                                                                          (783)              1,464              (5,928)
   Changes in assets and liabilities -
       Accounts receivable                                                         (13,319)             (9,316)             (2,118)
       Prepaid expenses and other current assets                                   (14,546)            (24,627)              5,127
       Other assets                                                                 (2,507)             12,099              (5,952)
       Accounts payable and accrued liabilities                                     10,165              15,341              (2,709)
       Deferred revenue                                                              4,332                 569                (963)
       Other liabilities                                                          (33,211)             (19,772)             (1,927)
                                                                           --------------      ---------------     ---------------
         Net cash provided by operating activities                                  23,471              86,871              67,393
                                                                           ---------------     ---------------     ---------------

INVESTING ACTIVITIES:
   Purchases of property and equipment                                             (29,316)            (26,225)            (28,416)
   Cash paid for acquisitions                                                     (231,130)         (1,060,681)           (140,746)
   Deposits on acquisitions and other                                              (11,500)            (23,849)             (5,943)
                                                                           ---------------     ---------------     ---------------
       Net cash used in investing activities                                      (271,946)         (1,110,755)           (175,105)
                                                                           ---------------     ---------------     ---------------

FINANCING ACTIVITIES:
   Payments on long-term debt                                                     (426,668)         (1,051,549)           (133,000)
   Proceeds from long-term debt                                                    149,668           2,128,388               5,000
   Distributions to parent                                                          (2,021)             (8,984)             (8,984)
   Contributions from parent                                                       538,749              19,653             195,753
   Payments for debt related costs                                                       -             (21,095)             (4,594)
                                                                           ---------------     ---------------     ---------------
     Net cash provided by financing activities                                     259,728           1,066,413              54,175
                                                                           ---------------     ---------------     ---------------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                    11,253              42,529            (53,537)

CASH AND CASH EQUIVALENTS:
   Beginning of period                                                               6,117              17,370              59,899
                                                                           ---------------     ---------------     ---------------
   End of period                                                           $        17,370     $        59,899     $         6,362
                                                                           ===============     ===============     ===============


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


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

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                          ----------------     ---------------     ---------------


SUPPLEMENTAL DISCLOSURES:
   Cash paid for-
     Interest                                                              $        41,735     $        58,362     $        99,824
     Income taxes                                                                    9,589                 550               1,281
   Non- cash investing and financing transactions-
     Preferred stock dividends accrued                                               1,123                   -                   -


ACQUISITION OF COUNTRY SAMPLER:
  Fair value of assets acquired                                            $        25,608
  Cash paid                                                                         18,954
                                                                           ---------------
  Liabilities recorded                                                     $         6,654
                                                                           ===============

ACQUISITION OF WKCF-TV:
  Fair value of assets acquired                                            $       246,445
  Cash paid                                                                        197,105
                                                                           ---------------
  Liabilities recorded                                                     $        49,340
                                                                           ===============

ACQUISITION OF VOTIONIS, S.A:
  Fair value of assets acquired                                            $        18,936
  Cash paid                                                                         13,302
                                                                           ---------------
  Liabilities recorded                                                     $         5,634
                                                                           ===============

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

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

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

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


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


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

                                                                                     FOR THE YEARS ENDED FEBRUARY 28 (29),
                                                                                     -------------------------------------
                                                                                 2000                 2001              2002
                                                                          ----------------     ---------------     ---------------

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

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

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



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

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
AND EMMIS OPERATING COMPANY AND SUBSIDIARIES

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

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation

The following discussion pertains to Emmis Communications Corporation ("ECC") and its subsidiaries (collectively, "Emmis" or
the "Company") and to Emmis Operating Company and its subsidiaries (collectively "EOC"). EOC became a wholly owned subsidiary of
ECC in connection with the Company's reorganization (see Note 1c. below) on June 22, 2001. Unless otherwise noted, all
disclosures contained in these Notes to Consolidated Financial Statements apply to Emmis and EOC. Emmis' foreign subsidiaries
report on a fiscal year ending December 31, which Emmis consolidates into its fiscal year ending February 28 (29). All
significant intercompany balances and transactions have been eliminated.

b. Organization

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

c. Reorganization

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

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

d. Revenue Recognition

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

e. Allowance for Doubtful Accounts

A provision for doubtful accounts is recorded based on management's judgement of the collectibility of receivables. The
activity in the allowance for doubtful accounts during the years ended February 2000, 2001 and 2002 was as follows:

Balance at Balance
Beginning At End
Of Year Provision Write-Offs Of Year
------------- ------------ ----------- -------------

Year ended February 29, 2000 $ 1,698 $ 2,550 $ (2,324) $ 1,924
Year ended February 28, 2001 1,924 3,713 (3,435) 2,202
Year ended February 28, 2002 2,202 4,005 (3,407) 2,800

f. Television Programming

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

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

g. Time Brokerage Fees

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

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

h. Non-cash Compensation

Non-cash compensation includes compensation expense associated with stock options granted, the issuance of restricted common
stock, common stock contributed to the Company's Profit Sharing Plan, and common stock issued to employees at our discretion. The
Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation." Pro forma disclosure of net income and earnings per share under SFAS No. 123 is presented in Note 8.

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

During the first award year (which extends through December 2002), we expect the stock compensation program to reduce cash
compensation expense by approximately $14 million, but non-cash compensation will increase by the same amount. We expect to issue
approximately 0.8 million shares during the first award year. While no formal decisions have been made, it is likely that the
program will continue in some form during the next fiscal year.

i. Restructuring Fees

In fiscal 2000, 2001 and 2002, Emmis incurred restructuring fees of $896, $2,057 and $768, respectively. The $896 in fiscal
2000 reflects the present value of future payments under a syndicated program agreement that was terminated in connection with
reformatting one of our radio stations. The $2,057 in fiscal 2001 reflects professional fees associated with the evaluation of
structural alternatives. The $768 in fiscal 2002 principally consists of severance and related costs associated with centralizing
certain technical functions of the television division.

j. Cash and Cash Equivalents

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

k. Property and Equipment

Property and equipment are recorded at cost. Depreciation is generally computed by the straight-line method over the estimated
useful lives of the related assets which are 31.5 years for buildings, not more than 32 years or the life of the lease, whichever
is lower for leasehold improvements, and 5 to 7 years for broadcasting equipment, office equipment and automobiles. Maintenance,
repairs and minor renewals are expensed; improvements are capitalized. Interest was capitalized in connection with the
construction of the KHON operating facility. The capitalized interest was recorded as part of the building. In fiscal 2000
approximately $420 of interest was capitalized. No interest was capitalized in fiscal 2001 or 2002. On a continuing basis, the
Company reviews the financial statement carrying value of property and equipment for impairment. If events or changes in
circumstances were to indicate that an asset carrying value may not be recoverable, a write-down of the asset would be recorded
through a charge to operations.

l. Intangible Assets

Intangible assets are recorded at cost. Generally, broadcast licenses, trademarks and the excess of cost over fair value of net
assets of purchased businesses are being amortized using the straight-line method over 40 years. The cost of the broadcast
license for Slager Radio is being amortized over the seven year initial term of the license. The cost of the broadcast license
for the two stations in Buenos Aires, Argentina is being amortized over the twenty-three year term of the license. The excess of
cost over fair value of net assets resulting from the purchase of publications is being amortized over 15 years. Other
intangibles are amortized using the straight-line method over varying periods, not in excess of 10 years.

Subsequent to the acquisition of an intangible asset, Emmis evaluates whether later events and circumstances indicate the
remaining estimated useful life of that asset may warrant revision or that the remaining carrying value of such an asset may not
be recoverable. When factors indicate that an intangible asset should be evaluated for possible impairment, Emmis uses an estimate
of the related asset's undiscounted future cash flows over the remaining life of that asset in measuring recoverability. If
separately identifiable cash flows are not available for an intangible asset (as would generally be the case for the excess of
cost over fair value of purchased businesses), Emmis evaluates recoverability based on the expected undiscounted cash flows of the
specific business to which the asset relates. If such an analysis indicates that impairment has in fact occurred, Emmis writes
down the remaining net book value of the intangible asset to its fair value. For this purpose, fair value is determined using
quoted market prices (if available), appraisals or appropriate valuation techniques.

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

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

m. Assets held for sale

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

Combined revenues of the assets held for sale were approximately $4.1 million and $11.9 million for the years ended February
2001 and 2002, respectively. Combined operating expenses of the assets held for sale were approximately $4.7 million and $8.6
million for the years ended February 2001 and 2002, respectively. Combined depreciation and amortization of the assets held for
sale were approximately $1.4 million and $3.6 million for the years ended February 2001 and 2002, respectively. In connection
with the sale of KALC-FM, the Company recognized an impairment loss of $9.1 million in fiscal 2002, which is reflected in
impairment loss and other in the accompanying consolidated statements of operations.

n. Advertising and Subscription Acquisition Costs

Advertising and subscription acquisition costs are expensed the first time the advertising takes place, except for certain
direct-response advertising related to the identification of new magazine subscribers, the primary purpose of which is to elicit
sales from customers who can be shown to have responded specifically to the advertising and that results in probable future
economic benefits. These direct-response advertising costs are capitalized as assets and amortized over the estimated period of
future benefit, ranging from six months to two years subsequent to the promotional event. As of February 28, 2001 and 2002, we
had approximately $1.4 million and $1.2 million, respectively, in direct-response advertising costs capitalized as assets. On an
interim basis, the Company defers major advertising campaigns for which future benefits can be demonstrated. These costs are
amortized over the shorter of the period benefited or the remainder of the fiscal year. Advertising expense for the years ended
February 2000, 2001 and 2002 was $15.8 million, $23.9 million and $15.0 million, respectively.

o. Investments

Emmis has a 50% ownership interest (approximately $5,114 as of February 28, 2002) in a partnership in which the sole asset is
land on which a transmission tower is located. The other owner has voting control of the partnership. Emmis has a 29% ownership
interest (approximately $2,627 as of February 28, 2002) in a local media internet venture. Emmis has a 25% ownership interest
(approximately $2,165 as of February 28, 2002) in a company that operates a tower site in Portland, Oregon. Emmis has a 51%
ownership interest (approximately $740 as of February 28, 2002) in a company that operates crafting stores, but Emmis does not
control the operations of the entity. These investments are accounted for using the equity method of accounting. Emmis owns less
than 2% (approximately $970 as of February 28, 2002) of an over-the-air digital content distributor. This investment is accounted
for using the cost method of accounting. During fiscal 2001, Emmis reduced the carrying value of its investment in BuyItNow.com
from $5.0 million to zero as the decline in the value of the investment was deemed to be other than temporary. This expense is
reflected in other income in the accompanying consolidated statements of operations.

p. Deferred Revenue and Barter Transactions

Deferred revenue includes deferred magazine subscription revenue and deferred barter revenue. Deferred magazine subscription
revenue is recognized when the publication is shipped. Barter transactions are recorded at the estimated fair value of the
product or service received. Broadcast revenue from barter transactions is recognized when commercials are broadcast or
publication is delivered. The appropriate expense or asset is recognized when merchandise or services are used or received.
Barter revenues for the years ended February 2000, 2001 and 2002 were $10.2 million, $12.0 million and $15.8 million,
respectively, and barter expenses were $9.8 million, $12.0 million and $15.2 million, respectively.

q. Foreign Currency Translation

The functional currency of Slager Radio is the Hungarian forint. Slager Radio's balance sheet has been translated from forints
to the U.S. dollar using the current exchange rate in effect at the subsidiary's balance sheet date. Slager Radio's results of
operations have been translated using an average exchange rate for the period. The translation adjustment resulting from the
conversion of Slager Radio's financial statements was $811, ($861) and ($754) for the years ended February 2000, 2001 and 2002,
respectively. This adjustment is reflected in shareholders' equity in the accompanying consolidated balance sheets.

The functional currency of the two stations in Argentina is the Argentinean peso, which until January 2002 was tied to the U.S.
dollar through the Argentine government's convertibility plan. In January 2002, the Argentine government allowed the peso to
devalue and trade against the U.S. dollar independently. These two stations' balance sheets have been translated from pesos to
U.S. dollars using the exchange rate in effect at the subsidiary's balance sheet date. The results of operations have been
translated using an average exchange rate for the period. The translation adjustment resulting from the conversion of their
financial statements was $7,057 for the year ended February 2002. This adjustment is reflected in shareholders' equity in the
accompanying consolidated balance sheets.

r. Earnings Per Share

Emmis

Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share", requires dual presentation of basic and
diluted earnings per share ("EPS") on the face of the income statement for all entities with complex capital structures. Basic
EPS is computed by dividing net income available to common shareholders by the weighted-average number of common shares
outstanding for the period (36,155,982, 46,869,050 and 47,334,038 shares for the years ended February 2000, 2001 and 2002,
respectively). Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common
stock were exercised or converted. Potentially dilutive securities at February 2000, 2001 and 2002 consisted of stock options and
the 6.25% Series A cumulative convertible preferred stock. The conversion of the preferred stock is not included in the
calculation of diluted net income per common share for the three years ended February 28, 2002 as the effect of these conversions
would be antidilutive. Additionally, the conversion of stock options is not included in the calculation of diluted net income per
common share for the year ended February 29, 2000 or February 28, 2002 as the effect of their conversion would be antidilutive.
Weighted average common equivalent shares outstanding for the period for purposes of computing diluted EPS are 36,155,982,
47,940,265 and 47,334,038 for the years ended February 2000, 2001 and 2002, respectively. Excluded from the calculation of
diluted net income per share are 2.7 million, 3.7 million and 3.7 million weighted average shares that would result from the
conversion of preferred shares for the years ended February 2000, 2001 and 2002, respectively. In the year ended February 28,
2001, approximately 0.7 million options were excluded from the calculation of diluted net income per share as the effect of their
conversion would be antidilutive.

EOC

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

s. Stock Splits

In February 2000, the Company effected a 2 for 1 stock split of the outstanding shares of common stock. Accordingly, all data
shown in the accompanying consolidated financial statements and notes has been retroactively adjusted to reflect the stock split.

t. Estimates

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

u. Fair Value of Financial Instruments

The carrying amounts of cash, accounts receivable, and accounts payable approximate fair value because of the short maturity of
these financial instruments. The carrying amounts of interest rate swaps are recorded at their fair value of $8,437, as of
February 28, 2002 and are included in other noncurrent liabilities in the accompanying consolidated balance sheets. The change in
fair value of interest rate swaps during the year of $5,484, net of tax, are recorded in accumulated other comprehensive income in
the accompanying consolidated balance sheets. Except for the senior subordinated notes and senior discount notes, the carrying
amounts of long-term debt approximate fair value due to the variable interest rate on such debt. On February 28, 2002, the fair
value of the senior subordinated notes was approximately $308.3 million and the fair value of the senior discount notes was
approximately $268.3 million. Fair value estimates are made at a specific point in time, based on relevant market information
about the financial instrument.

v. Derivative Financial Instruments

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

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

w. Recent Accounting Pronouncements

x. Reclassifications

Certain reclassifications have been made to the prior years financial statements to be consistent with the February 28, 2002
presentation.

2. COMMON STOCK

Emmis has authorized 170,000,000 shares of Class A common stock, par value $.01 per share, 30,000,000 shares of Class B common
stock, par value $.01 per share, and 30,000,000 shares of Class C common stock, par value $.01 per share. The rights of these
three classes are essentially identical except that each share of Class A common stock has one vote with respect to substantially
all matters, each share of Class B common stock has 10 votes with respect to substantially all matters, and each share of Class C
common stock has no voting rights with respect to substantially all matters. Class B common stock is owned by the principal
shareholder (Jeffrey H. Smulyan). All shares of Class B common stock convert to Class A common stock upon sale or other transfer
to a party unaffiliated with the principal shareholder. At February 28, 2001 and 2002, no shares of Class C common stock were
issued or outstanding. The financial statements presented reflect the issuance of Class A and Class B common stock.

On October 29, 1999, Emmis completed the sale of 7.984 million shares of its Class A common stock at $31.25 per share
resulting in total proceeds of $249.5 million. Net proceeds of $238.3 million were used to fund the acquisition of WKCF-TV in
Orlando, Florida, two radio stations in Buenos Aires, Argentina, and to repay certain outstanding obligations under the credit
facility.

At the same time as its public sale of 7.984 million shares of Class A common stock, Emmis entered into a stock purchase
agreement with Liberty Media Corporation (Liberty) and sold 5.4 million shares of the Company's Class A common stock to Liberty
for $148.5 million on November 18, 1999. Net proceeds of $145.3 million were used to fund the acquisition of WKCF-TV in Orlando,
Florida, two radio stations in Buenos Aires, Argentina, and to repay certain outstanding obligations under the credit facility.

3. PREFERRED STOCK

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

On October 29, 1999, ECC completed the sale of 2.875 million shares of 6.25% Series A cumulative convertible preferred stock
at $50 per share resulting in total proceeds of $143.8 million. Net proceeds of $138.4 million were used to fund the acquisition
of WKCF-TV in Orlando, Florida, two radio stations in Buenos Aires, Argentina, and to repay certain outstanding obligations under
the credit facility.

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

From April 15, 2001 to October 15, 2002, Emmis may redeem the preferred stock at a redemption premium equal to 104.911% of the
stated liquidation preference (plus accumulated and unpaid dividends, if any) if certain conditions are met. Beginning on October
15, 2002, and each October 15 thereafter, Emmis may redeem the preferred stock for cash at the following redemption premiums
(which are expressed as a percentage of the liquidation preference per share), plus in each case accumulated and unpaid dividends,
if any, whether or not declared to the redemption date:



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

The terms of ECC's  preferred  stock  provide for a quarterly  dividend  payment of $.78125 per share on each  January 15, April 15,
July 15 and October 15.  While  Emmis has  sufficient  liquidity  to declare  and pay the  dividends  as they become due, it was not
permitted to do so for the October 15, 2001,  January 15, 2002 and April 15, 2002 payments.  Emmis'  leverage ratio under the senior
discount  notes  indenture  exceeded  8:1 for the  October,  January  and April  payments.  Its  leverage  ratio  under  the  senior
subordinated  notes  indenture  exceeded 7:1 for the January and April payments.  For each of these dividend  dates,  ECC's board of
directors  set the record  date,  but did not declare the  dividend.  Instead,  on each payment  date a  wholly-owned,  unrestricted
subsidiary of EOC made a payment of $.78125 per share to each  preferred  shareholder  of record.  This  subsidiary was permitted to
make the  payment  to the  preferred  shareholders  under the  senior  discount  notes and  senior  subordinated  notes  indentures.
Currently,  Emmis meets its leverage ratio requirements  under the senior  subordinated notes and expects to meet its leverage ratio
requirements under the senior discount notes upon application of its April 2002 equity proceeds  (discussed  above).  When permitted
to do so under the indentures,  management  expects ECC's board of directors to declare each dividend and deem the obligation to pay
each dividend to have been discharged by the subsidiary's prior payment.

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

    The credit facility,  senior  subordinated  notes and senior discount notes were comprised of the following at February 28, 2001
and 2002:

                                                                            2001                     2002
                                                                       ---------------         ---------------
Credit Facility
   Revolver                                                            $             -         $             -
   Term Note A                                                                 480,000                 398,453
   Term Note B                                                                 600,000                 553,547
8 1/8% Senior Subordinated Notes Due 2009                                      300,000                 300,000
                                                                       ---------------         ---------------
                                                                             1,380,000               1,252,000
Less:   Credit facility debt to be repaid with proceeds
        of assets held for sale                                                      -                 135,000
                                                                       ---------------         ---------------
      EOC                                                                    1,380,000               1,117,000

12 1/2% Senior Discount Notes Due 2011                                               -                 226,507
                                                                       ---------------         ---------------
      Emmis                                                            $     1,380,000         $     1,343,507
                                                                       ===============         ===============

CREDIT FACILITY

    On December 29, 2000 ECC entered into an amended and restated credit  facility for $1.4 billion  (consisting of a $320.0 million
revolver,  a $480.0 million term note A and a $600.0  million term note B), which included a provision  allowing ECC to increase the
commitment by $500.0 million under  circumstances  described in the credit facility.  In June 2001, upon completion of the Company's
reorganization  (see Note 1c),  the Company  repaid  $93.0  million of term notes and  transferred  the credit  facility to EOC. The
repayment  resulted  in the  cancellation  of a  portion  of the term  notes  and the  Company  recorded  an  extraordinary  loss of
approximately  $1.1 million,  net of taxes,  related to  unamortized  deferred debt issuance  costs for the year ended  February 28,
2002.  During the year,  EOC repaid and cancelled an additional  $35.0 million in term notes.  On November 30, 2001, EOC amended the
financial covenants of its credit facility through November 30, 2002 (the "Amendment  Period"),  which, among other things,  reduced
total  availability  under the revolver to $220.0 million and resulted in the amortization of $1.4 million of deferred debt issuance
costs into interest expense during the year ended February 28, 2002

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

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

    The amended and  restated  credit  facility  provides  for letters of credit to be made  available  to EOC not to exceed  $100.0
million.  The aggregate  amount of outstanding  letters of credit and amounts borrowed under the revolver cannot exceed the revolver
commitment. At February 28, 2002, $6.6 million in letters of credit were outstanding.

    All outstanding  amounts under the credit  facility bear interest,  at the option of EOC, at a rate equal to the Eurodollar Rate
or an  alternative  base rate (as  defined  in the  credit  facility)  plus a margin.  The margin  over the  Eurodollar  Rate or the
alternative  base rate varies (ranging from 0% to 2.9% and 0.5% to 3.5% during the Amendment  Period),  depending on Emmis' ratio of
debt to operating cash flow, as defined in the agreement.  The  weighted-average  interest rate on borrowings  outstanding under the
credit facility,  including the effects of interest rate swaps  (discussed  below) was  approximately  6.3% and 7.4% at February 28,
2002 and  February  28, 2001,  respectively.  Interest is due on a calendar  quarter  basis under the  alternative  base rate and at
least every three months under the  Eurodollar  Rate. The credit  facility  requires EOC to have fixed interest rates for a two year
period on at least 50% of its total  outstanding  debt, as defined  (including the senior  subordinated  debt).  After the first two
years,  this ratio of fixed to floating rate debt must be maintained if EOC's total leverage ratio, as defined,  is greater than 6:1
at any quarter end. The notional  amount of interest rate  protection  agreements at February 28, 2002 totaled $350.0  million.  The
interest rate swap agreements,  which expire at various dates beginning February 3, 2003 to February 8, 2004,  effectively establish
interest rates on the credit  facility's  underlying  base rate  approximating  a weighted  average rate of 4.94% on the three-month
LIBOR interest rate.

    As indicated in footnote  1u.,  Emmis  accounts for interest  rate swap  arrangements  under SFAS No. 133 as amended by SFAS No.
138. The fair market value of these swaps at February  28,  2002,  was a liability of $8,437 which is reflected in the  accompanying
consolidated  balance  sheets,  with an associated  income tax asset of $2,953.  As Emmis has  designated  these  interest rate swap
agreements as cash flow hedges and the swaps were highly  effective  during the year ended  February 28, 2002, the net liability was
recorded  as a  component  of  comprehensive  income and the  ineffectiveness  was not  material.  Interest  paid  under  these swap
arrangements was $0 and $3,648 for the years ended February 28, 2001 and 2002, respectively.

    The aggregate  amount of term notes A and B begin amortizing in December 2003. The annual  amortization and reduction  schedules
for debt outstanding as of February 28, 2002, are as follows:

                                        SCHEDULED AMORTIZATION/REDUCTION OF CREDIT FACILITY

      Year Ended            Term Loan A           Term Loan B             Total         Adjusted Total
   February 28 (29),         Amortization        Amortization         Amortization      Amortization (1)
--------------------     ----------------    ----------------     ----------------     -----------------
         2003                $         -         $         -          $         -          $         -
         2004                     16,934               1,384               18,318               10,084
         2005                     69,729               5,535               75,265               41,359
         2006                     73,714               5,535               79,249               43,406
         2007                     75,706               5,535               81,242               44,430
         2008                     79,691               5,535               85,226               46,478
         2009                     82,679               5,535               88,214               48,014
         2010                          -             524,486              524,486              523,129
                             -----------         -----------          -----------      ---------------
        Total                $   398,453         $   553,547          $   952,000          $   756,900
                             ===========         ===========          ===========      ===============

                (1) Adjusted to give effect to the repayment of $60.1 million of credit facility debt in April
                    2002 with 50% of net equity offering proceeds and the repayment of $135.0 million of credit
                    facility debt in May 2002 with net proceeds from asset sales.

    Proceeds from raising additional equity, issuing additional  subordinated debt, or from asset sales, as well as excess cash flow
beginning in February 29, 2004, may be required to repay amounts  outstanding under the credit facility.  These mandatory  repayment
provisions  may apply  depending  on EOC's  total  leverage  ratio,  as defined  under the credit  facility.  Additionally,  EOC may
reborrow amounts paid in accordance with these provisions under certain circumstances.

The credit facility contains various financial and operating covenants and other restrictions with which EOC must comply,
including, among others, restrictions on additional indebtedness, incurrence of liens, engaging in businesses other than its
primary business, paying cash dividends on common stock, redeeming or repurchasing capital stock of ECC, acquisitions and asset
sales, as well as requirements to maintain certain financial ratios. After giving effect to the November 2001 amendment, EOC was
in compliance with these covenants at February 28, 2002. The credit facility provides that an event of default will occur if
there is a change of control of ECC, as defined. A change of control includes, but is not limited to, Jeffrey H. Smulyan or any
beneficial holder ceasing to own at least 35% of the general voting rights of the capital stock of ECC. Substantially all of
Emmis' assets, including the stock of Emmis' wholly-owned subsidiaries, are pledged to secure the credit facility.

SENIOR SUBORDINATED NOTES

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

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

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

The indenture relating to the notes contains covenants with respect to EOC which include limitations of indebtedness,
restricted payments (including preferred stock dividend payments, see Note 3), transactions with affiliates, issuance and sale of
capital stock of restricted subsidiaries, sale/leaseback transactions and mergers, consolidations or sales of substantially all of
EOC's assets. EOC was in compliance with these covenants at February 28, 2002.

SENIOR DISCOUNT NOTES

On March 27, 2001, Emmis received $202.6 million of proceeds from the issuance of senior discount notes due 2011, less
approximately $12.0 million of debt issuance costs. The notes, for which ECC is the obligor, accrete interest at a rate of 12.5%
per year, compounded semi-annually to an aggregate principal amount of $370.0 million on March 15, 2006. Commencing on September
15, 2006, interest is payable in cash on each March 15 and September 15, with the aggregate principal amount of $370.0 million due
on March 15, 2011. The notes have no sinking fund requirement. A portion of the net proceeds was used to fund the acquisition of
three radio stations in Phoenix, Arizona and the remaining net proceeds ($93.0 million) were placed in escrow. In June 2001, upon
completion of the Company's reorganization (see Note 1c), the proceeds held in escrow were released and used to reduce outstanding
borrowings under the credit facility.

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

Prior to March 15, 2004, the Company may, at its option, use the net cash proceeds of one or more Public Equity Offerings (as
defined), to redeem up to 35% of the aggregate principal amount of the notes at a redemption price equal to 112.5% plus accrued
and unpaid interest, provided that at least $240.5 million of the aggregate principal amount at maturity of the notes originally
issued remains outstanding after such redemption. Additionally, any time prior to March 15, 2006, the Company may redeem all or
part of the notes at a redemption price equal to 100% of the accreted value (as defined) of the notes plus the applicable premium
(as defined) as of, and liquidating damages (as defined), if any, to the date of redemption. On or after March 15, 2006 and until
March 14, 2009, the notes may be redeemed at the option of the Company in whole or in part at prices ranging from 106.25% to
102.083% plus accrued and unpaid interest. On or after March 15, 2009, the notes may be redeemed at 100% plus accrued and unpaid
interest. Upon a change of control (as defined), the Company is required to make an offer to purchase the notes then

outstanding. Prior to March 15, 2006, the purchase price will be 101% of the accreted value of the notes. On or after March 15,
2006, the purchase price will be 101% of the outstanding principal amount of the notes plus accrued and unpaid interest.

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

The indenture relating to the notes contains covenants with respect to the Company which include limitations of indebtedness,
restricted payments (including preferred stock dividend payments, see Note 3), transactions with affiliates, issuance and sale of
capital stock of restricted subsidiaries, and mergers, consolidations or sales of substantially all of the Company's assets. The
Company was in compliance with these covenants at February 28, 2002.

5. OTHER LONG-TERM DEBT

Other long-term debt was comprised of the following at February 28, 2001 and 2002:

2001 2002
--------------- ---------------
Hungary:
License Obligation $ 10,605 $ 11,285
Bonds Payable 2,207 2,261
Notes Payable 1,872 659
Other 3,187 677
--------------- ---------------
Total Other Long-Term Debt 17,871 14,882
Less: Current Maturities 4,187 7,933
--------------- ---------------
Other Long-Term Debt, Net of
Current Maturities $ 13,684 $ 6,949
=============== ===============

The License Obligation is payable to the Hungarian government in Hungarian forints, by Emmis' Hungarian subsidiary in four
equal annual installments that commenced in November 2000. The License Obligation of $11.3 million as of February 28, 2002, is
reflected net of an unamortized discount of $0.2 million. The obligation is non-interest bearing; however, in accordance with the
license purchase agreement, a Hungarian cost of living adjustment is calculated annually and is payable, concurrent with the
principal payments, on the outstanding obligation. The cost of living adjustment is estimated each reporting period and is
included in interest expense. Prevailing market interest rates in Hungary exceed inflation by approximately 3%. Accordingly, the
License Obligation has been discounted at an imputed interest rate of approximately 3% to reflect the obligation at its fair
value. Slager is currently trying to renegotiate the terms of the license payments. See Note 9d for further discussion.

The Hungarian Bonds and Notes Payable are payable by Emmis' Hungarian subsidiary to the minority shareholders of the
subsidiary. The Bonds, payable in Hungarian forints, are due on maturity at November 2004 and bear interest at the Hungarian
State Bill rate plus 3% (approximately 13.7% and 17.5% at February 28, 2001 and 2002, respectively). Interest is payable
semi-annually. The Notes Payable and accrued interest, payable in U.S. dollars, are due December 31, 2002 and bear interest at the
prime rate plus 2%.

6. ACQUISITIONS, DISPOSITONS AND INVESTMENTS

allocated to property and equipment and broadcast licenses based on an appraisal. Broadcast licenses are included in intangible
assets in the accompanying consolidated balance sheets and are being amortized over 40 years.



7.   PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

    Unaudited  pro forma  summary  information  is  presented  below for the years ended  February  28, 2001 and 2002,  assuming the
following  events all had occurred on the first day of the pro forma periods  presented  below:  (a) the acquisition of (i) KKLT-FM,
KTAR-AM and KMVP-AM in March 2001, (ii) KALC-FM in January 2001, (iii) KZLA-FM,  eight  network-affiliated  television stations from
Lee  Enterprises,  Inc.  and  KPNT-FM,  KXOK-FM AND KIHT-FM in October  2000,  (iv)  KKFR-FM  and  KXPK-FM in August  2000,  (b) the
disposition  of (i) WTLC-AM in April 2001 and (ii) WKKX-FM in October 2000;  (c) the issuance of the senior  discount notes in March
2001 and subsequent pay-down of senior debt and (d) the refinancing of the credit facility in December 2000.

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

         EMMIS

                                                                                 Pro Forma
                                                          ------------------------------------------------------
                                                                 2001                                2002
                                                          -------------------                -------------------


          Net revenues                                    $           571,956                $           533,780
                                                          ===================                ===================

          Broadcast/publishing cash flow                  $           211,578                $           185,665
                                                          ===================                ===================

          Net loss before extraordinary item              $            (9,896) (A)           $           (62,973)
                                                          ===================                ===================

          Net loss available to common
           shareholders before extraordinary
           loss                                           $           (18,880) (A)           $           (71,957)
                                                          ===================                ===================

          Basic and diluted net loss available
           to common shareholders before
           extraordinary loss                             $             (0.40) (A)          $              (1.52)
                                                          ===================               ====================

          Weighted average shares outstanding:
           Basic                                                       46,869                             47,334
           Diluted                                                     46,869                             47,334

         (A)  Includes approximately $39 million of nonrecurring pre-tax other income.


         EOC

    Unaudited pro forma summary information is presented below for the twelve months ended February 28, 2001 and 2002, using the
same assumptions as those described in the Emmis pro formas, except that interest expense on ECC's senior discount notes is not
reflected.

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



                                                                                 Pro Forma
                                                          ------------------------------------------------------
                                                                 2001                                2002
                                                          -------------------                -------------------


          Net revenues                                    $           571,956                $           533,780
                                                          ===================                ===================

          Broadcast/publishing cash flow                  $           211,578                $           185,665
                                                          ===================                ===================

          Net income (loss) before extraordinary item     $             7,305 (A)            $           (45,772)
                                                          ===================                ===================

         (A)  Includes approximately $39 million of nonrecurring pre-tax other income.

8.   EMPLOYEE BENEFIT PLANS

    a.   1994 Equity Incentive Plan

    At the 1994 annual  meeting,  the  shareholders  of Emmis  approved  the 1994 Equity  Incentive  Plan.  Under this Plan,  awards
equivalent to 2,000,000 shares of common stock may be granted.  The awards,  which have certain  restrictions,  may be for incentive
stock options,  nonqualified  stock options,  shares of restricted stock, stock  appreciation  rights,  performance units or limited
stock  appreciation  rights.  Under this Plan,  all awards are granted with an exercise  price equal to the fair market value of the
stock except for shares of restricted  stock which may be granted with a purchase price at amounts  greater than or equal to the par
value of the  underlying  stock.  No more than  1,000,000  shares of Class B common stock are available for grant and issuance under
this Plan.  The stock  options under this Plan are  generally  not  exercisable  for one year after the date of grant and expire not
more than 10 years from the date of grant.  Under this Plan,  awards  equivalent to 223,000 shares of common stock are available for
grant at February 28, 2002. Certain stock options awarded remain outstanding as of February 28, 2001 and 2002.

b.       1995 Equity Incentive Plan

    At the 1995 annual  meeting,  the  shareholders  of Emmis  approved  the 1995 Equity  Incentive  Plan.  Under this Plan,  awards
equivalent  to  1,300,000  shares of common  stock may be granted  pursuant to  employment  agreements.  Under the Plan,  no further
awards are available for grant at February 28, 2002.  Certain stock options  awarded remain  outstanding as of February 28, 2001 and
2002.

    c.   Non-Employee Director Stock Option Plan

    At the 1995 annual meeting, the shareholders of Emmis approved a Non-Employee  Director Stock Option Plan. Under this Plan, each
non-employee  director,  as of January 24, 1995,  was granted an option to acquire  10,000  shares of the  Company's  Class A common
stock.  Thereafter,  upon  election  or  appointment  of  any  non-employee  director  or  upon a  continuing  director  becoming  a
non-employee  director,  such  individual  will also become  eligible to receive a comparable  option.  In addition,  an  equivalent
option will be  automatically  granted on an annual  basis to each  non-employee  director.  All awards are granted with an exercise
price equal to the fair market  value of the stock on the date of grant.  Under this Plan,  awards  equivalent  to 20,000  shares of
Class A common stock are  available  for grant at February  28,  2002.  Certain  stock  options  awarded  remain  outstanding  as of
February 28, 2001 and 2002.

    d.   1997 Equity Incentive Plan

    At the 1997 annual  meeting,  the  shareholders  of Emmis  approved  the 1997 Equity  Incentive  Plan.  Under this plan,  awards
equivalent to 2,000,000 shares of common stock may be granted.  The awards,  which have certain  restrictions,  may be for incentive
stock options,  nonqualified stock options,  shares of restricted stock, stock appreciation  rights or performance units. Under this
Plan,  all awards are granted  with a purchase  price equal to the fair market  value of the stock  except for shares of  restricted
stock which may be granted with an exercise  price at amounts  greater than or equal to the par value of the  underlying  stock.  No
more than  1,000,000  shares of Class B common stock are available for grant and issuance  under this Plan.  The stock options under
this Plan are  generally  not  exercisable  for one year  after the date of grant and expire not more than 10 years from the date of
grant.  Under this Plan,  awards  equivalent to 81,000 shares of common stock are available for grant at February 28, 2002.  Certain
stock options and restricted stock awarded remain outstanding as of February 28, 2001 and 2002.

e. 1999 Equity Incentive Plan

At the 1999 annual meeting, the shareholders of Emmis approved the 1999 Equity Incentive Plan. Under this plan, awards
equivalent to 3,000,000 shares of common stock may be granted. The awards, which have certain restrictions, may be for incentive
stock options, nonqualified stock options, shares of restricted stock, stock appreciation rights or performance units. Under this
Plan, all awards are granted with a purchase price equal to the fair market value of the stock except for shares of restricted
stock which may be granted with an exercise price at amounts greater than or equal to the par value of the underlying stock. No
more than 1,000,000 shares of Class B common stock are available for grant and issuance under this Plan. The stock options under
this Plan are generally not exercisable for one year after the date of grant and expire not more than 10 years from the date of
grant. Under this Plan, awards equivalent to 201,000 shares of common stock are available for grant at February 28, 2002. Certain
stock options and restricted stock awarded remain outstanding as of February 28, 2001 and 2002.

f. 2001 Equity Incentive Plan

At the 2001 annual meeting, the shareholders of Emmis approved the 2001 Equity Incentive Plan. Under this plan, awards
equivalent to 3,000,000 shares of common stock may be granted. The awards, which have certain restrictions, may be for incentive
stock options, nonqualified stock options, shares of restricted stock, stock appreciation rights or performance units. Under this
Plan, all awards are granted with a purchase price equal to the fair market value of the stock except for shares of restricted
stock which may be granted with an exercise price, if any, at amounts greater than or equal to the par value of the underlying
stock. No more than 1,000,000 shares of Class B common stock are available for grant and issuance under this Plan. The stock
options under this Plan generally expire not more than 10 years from the date of grant. Under this Plan, awards equivalent to
2,733,000 shares of common stock are available for grant at February 28, 2002. Certain stock awards remain outstanding as of
February 28, 2002.

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

The Company accounts for its Stock Option Plans in accordance with APB Opinion No. 25 ("APB 25"), under which compensation
expense is recognized only to the extent the exercise price of the option is less than the fair market value of the share of stock
at the date of grant. An alternative method would be to follow Statement of Financial Accounting Standards No. 123, "Accounting
for Stock Based Compensation" (SFAS 123), which considers the stock options as compensation expense to the Company, based on their
fair value at the date of grant. The Company has elected to continue to use the APB 25 method for accounting, but has adopted the
disclosure requirements of SFAS 123. Accordingly, compensation expense reflected in non-cash compensation in the consolidated
statements of operations related to the plans summarized above was $7,357, $5,400 and $9,095 for the years ended February 2000,
2001 and 2002, respectively. Had compensation expense related to these plans been determined based on fair value at date of
grant, the Company's net income and earnings per share would have been reduced to the pro forma amounts indicated below:

Year Ended February 28 (29),
------------------------------------------------------------------
2000 2001 2002
------------------ ----------------- -----------------
Net Income Available to Common Shareholders:
As Reported $ (3,177) $ 4,752 $ (73,092)
Pro Forma $ (8,741) $ 113 $ (85,760)

Basic EPS:
As Reported $ (.09) $ .10 $ (1.54)
Pro Forma $ (.24) $ .00 $ (1.81)

Diluted
As Reported $ (.09) $ .10 $ (1.54)
Pro Forma $ (.24) $ .00 $ (1.81)



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

                                                                           Year Ended February 28 (29),
                                                       ------------------------------------------------------------------
                                                               2000                   2001                    2002
                                                       ------------------       -----------------       -----------------
       Risk-Free Interest Rate:                                 6.12%                 4.54%                   5.41%
       Expected Life (Years):                                   5.2                    6.4                     8.3
       Expected Volatility:                                   44.31%                 56.79%                  57.67%

    Expected dividend yields were zero for fiscal 2000, 2001 and 2002.

    A summary of the status of options and restricted stock at February 2000, 2001 and 2002 and the related activity for the year,
including the adoption of the 2001 Equity Incentive Plan, is as follows:

                                                       2000                           2001                           2002
                                           ----------------------------   ---------------------------    -------------------------
                                             Number of        Weighted      Number of       Weighted       Number of     Weighted
                                             Options/          Average      Options/         Average       Options/       Average
                                            Restricted        Exercise     Restricted       Exercise      Restricted     Exercise
                                               Stock            Price         Stock           Price          Stock         Price
                                           -----------      -----------   -----------     -----------    -----------   -----------
Outstanding at
  Beginning of Year                         3,485,386           14.63      4,559,168          18.07       4,144,793        23.14
Granted                                     2,012,000           23.39        814,629          34.66       1,089,369        29.01
Exercised                                    (922,298)          16.20     (1,092,688)          9.78        (250,420)       17.56
Lapsing of restrictions on stock awards             -               -       (101,805)             -        (190,162)           -
Expired and other                             (15,920)          18.57        (34,511)         20.32         (40,067)       23.68
Outstanding at
  End of Year                               4,559,168           18.07      4,144,793          23.14       4,753,513        25.39
Exercisable at
  End of Year                               2,537,168           13.92      2,008,680          19.26       2,464,827        21.10
Total Available for Grant                   2,530,325                      1,792,400                      3,257,944

    During the years ended February 2000,  2001 and 2002, all options were granted with an exercise price equal to fair market value
of the stock on the date of grant.  During fiscal 2000,  2001 and 2002, the Company  entered into  employment  agreements  providing
for grants of  135,600,  9,200 and 26,190  shares,  respectively,  at a weighted  average  fair value of $22.70,  $35.51 and $27.57,
respectively.

    The following information relates to options outstanding and exercisable at February 28, 2002:

                                        Options Outstanding                                 Options Exercisable
                ------------------------------------------------------------------   ----------------------------
                                                       Weighted        Weighted                          Weighted
                     Range of                           Average         Average                           Average
                     Exercise          Number of       Exercise        Remaining         Number of       Exercise
                      Prices            Options          Price       Contract Life        Options          Price
                ----------------    --------------  --------------  --------------    --------------  -----------
                     $3.80-$7.60          19,600         $ 6.90       1.0 years            19,600         $ 6.90
                      7.60-11.40         208,760           7.78       1.0 years           208,760           7.78
                     11.40-15.20          26,564          14.44       1.6 years            26,564          14.44
                     15.20-19.00         511,930          16.56       1.3 years           511,930          16.56
                     19.00-22.80       1,055,751          21.35       2.3 years         1,055,084          21.35
                     22.80-26.60         177,328          24.63       2.9 years           177,328          24.63
                     26.60-30.40       2,076,722          28.60       8.2 years           240,000          28.02
                     30.40-34.20               -               -         - years                -              -
                     34.20-38.00         676,858          35.40       8.0 years           255,561          35.38

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

    h.   Profit Sharing Plan

    In  December  1986,  Emmis  adopted a profit  sharing  plan that  covers all  nonunion  employees  with six  months of  service.
Contributions  to the plan are at the  discretion  of the Emmis Board of Directors and can be made in the form of newly issued Emmis
common  stock or cash.  Historically,  all  contributions  to the plan have been in the form of Emmis  common  stock.  Contributions
reflected in non-cash  compensation  in the  consolidated  statements of operations for the years ended February 2000, 2001 and 2002
were $1,250, $1,250, and $0 respectively.

i. 401(k) Retirement Savings Plan

Emmis sponsors two Section 401(k) retirement savings plans. One covers substantially all nonunion employees age 18 years and
older who have at least six months of service and the other covers substantially all union employees that meet the same
qualifications. Employees may make pretax contributions to the plans up to 15% of their compensation, not to exceed the annual
limit prescribed by the Internal Revenue Service. Emmis may make discretionary matching contributions to the plans in the form of
shares of the Company's Class A common stock. Effective March 1, 1996, Emmis began to match 50% of employee contributions up to $2
thousand. Emmis' contributions to the plans totaled $807, $1,337 and $1,684 for the years ended February 2000, 2001 and 2002,
respectively.

j. Defined Contribution Health and Retirement Plan

Emmis contributes to a multi-employer defined contribution health and retirement plan for employees who are members of a
certain labor union. Amounts charged to expense related to the multi-employer plan were approximately $345, $441, and $465 for the
years ended February 2000, 2001 and 2002, respectively.

k. Employee Stock Purchase Plan

Effective March 1, 1995, the Company implemented an employee stock purchase plan which permits employees to purchase, via
payroll deduction, shares of the Company's Class A common stock, at fair market value, up to an amount not to exceed 10% of an
employee's annual gross pay.

Effective March 1, 2000, the Company replaced its previous employee stock purchase plan with a new plan that allows employees
to purchase shares of the Company's Class A common stock at the lesser of 90% of the fair value of such shares at the beginning or
end of each semi-annual offering period. Purchases are subject to a maximum limitation of $22.5 annually per employee. The
Company will not record compensation expense pursuant to this plan as it is designed to meet the requirements of Section 423(b) of
the Internal Revenue Code.

9. OTHER COMMITMENTS AND CONTINGENCIES

a. TV Program Rights Payable

The Company has obligations to various program syndicators and distributors in accordance with current contracts for the rights
to broadcast programs. Future payments scheduled under contracts for programs available as of February 28, 2002, are as follows:

2003 $ 27,507
2004 12,852
2005 10,458
2006 7,964
2007 3,091
Thereafter 6,186
-------------------
68,058
Less: Current Portion 27,507
-------------------
TV Program Rights Payable, Net
of Current Portion $ 40,551
===================

In addition, the Company has entered into commitments for future program rights (programs not available as of February 28,
2002). Future payments scheduled under these commitments are summarized as follows: Year ended February 2003 - $5,240, 2004 -
$11,224, 2005 - $8,607, 2006 - $3,789, 2007 - $1,501 and thereafter - $1,638.

b. Radio Broadcast Agreements

The Company has entered into agreements to broadcast certain syndicated programs and sporting events. Future payments scheduled
under these agreements are summarized as follows: Year ended February 2003 - $2,281, 2004 - $1,036, 2005 - $981, 2006 - $240, 2007
- $240 and thereafter - $320. Expense related to these broadcast rights totaled $1,780, $2,376, and $2,522 for the years ended
February 2000, 2001 and 2002, respectively.

In connection with reformatting one of its radio stations, the Company terminated a syndicated program agreement in fiscal
2000. The contract required continued payments in the event of termination, and these payments are included in the future
payments disclosed above. The discounted present value of these payments of $896 is reflected in the accompanying consolidated
statements of operations as restructuring fees.

c. Operating Leases

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

Future minimum rental payments (exclusive of future escalation costs) required by non-cancelable operating leases, with an
initial term of one year or more as of February 28, 2002, are as follows:

2003 $ 7,959
2004 6,472
2005 5,676
2006 5,240
2007 4,401
Thereafter 20,289
-----------------
$ 50,037
=================

Minimum payments have not been reduced by minimum sublease rentals of approximately $124 due in the future under non-cancelable
subleases.

Rent expense totaled $4,404, $6,457, and $7,995 for the years ended February 2000, 2001 and 2002, respectively. Rent expense
for the years ended February 2000, 2001 and 2002 is net of sublease income of approximately $148, $86 and $0, respectively.

d. Employment Agreements

The Company enters into employment agreements with certain officers and employees. These agreements generally specify base
salary, along with bonuses and grants of stock and/or stock options based on certain criteria. Future minimum cash payments
scheduled under terms of these agreements are summarized as follows: Year ended February 2003 - $23,829, 2004 - $13,800, 2005 -
$3,828, 2006 - $961, 2007 - $620 and thereafter - $2,516.

In addition to future cash payments, at February 28, 2002, 66,800 shares of common stock and options to purchase 1,091,500
shares of common stock have been granted in connection with current employment agreements. Additionally, up to 21,000 shares and
options to purchase up to 148,500 shares of common stock may be granted (or have been granted subject to forfeiture) under the
agreements in the next two years.

e. Litigation

The Company currently, and from time to time, is involved in litigation incidental to the conduct of its business, but the
Company is not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material
adverse effect on the financial position or results of operations of the Company. However, instead of making a required license
payment to the Hungarian government in November 2001, our 59.5% owned national radio station in Hungary requested a modification
of the broadcast contract and ultimately filed suit in arbitration court seeking reformation of the contract and requesting that
the payments be reduced. The Hungarian government then issued an order revoking our station's broadcast license for non-payment
of the license fee, and our station appealed the order in the Hungarian ordinary court. The Hungarian government has also filed
an action seeking to liquidate our Hungarian broadcast company. Our station is vigorously prosecuting the actions in the
arbitration court and ordinary court and is vigorously opposing the action seeking liquidation. However, we cannot predict the
outcome of these actions. We do not plan to continue to operate the station under the present fee arrangement. We do not expect
an adverse material financial impact to Emmis or EOC if the station does not continue to operate.



10.  INCOME TAXES

    The provision (benefit) for income taxes for the years ended February 2000, 2001 and 2002, consisted of the following:

                  EMMIS:

                                                                        2000           2001            2002
                                                                     -----------    -----------    -----------
                         Current:
                           Federal                                   $       105    $     1,540    $         -
                           State                                             100            300              -
                                                                     -----------    -----------    -----------
                                                                             205          1,840              -
                                                                     -----------    -----------    -----------
                         Deferred:
                           Federal                                         6,010         14,360        (25,189)
                           State                                             660          1,450           (434)
                                                                     -----------    -----------    -----------
                                                                           6,670         15,810        (25,623)
                                                                     -----------    -----------    -----------
                         Provision (benefit) for
                           income taxes                                    6,875         17,650        (25,623)

                         Tax benefit of extraordinary
                           item                                            1,250              -            664
                                                                     -----------    -----------    -----------

                         Net provision (benefit) for income taxes    $     5,625    $    17,650    $   (26,287)
                                                                     ===========    ===========    ===========

                  EOC:

                                                                        2000           2001            2002
                                                                     -----------    -----------    -----------
                         Current:
                           Federal                                   $       105    $     1,540    $         -
                           State                                             100            300              -
                                                                     -----------    -----------    -----------
                                                                             205          1,840              -
                                                                     -----------    -----------    -----------
                         Deferred:
                           Federal                                         6,010         14,360        (17,399)
                           State                                             660          1,450           (434)
                                                                     -----------    -----------    -----------
                                                                           6,670         15,810        (17,833)
                                                                     -----------    -----------    -----------
                         Provision (benefit) for
                           income taxes                                    6,875         17,650        (17,833)

                         Tax benefit of extraordinary
                           item                                            1,250              -            664
                                                                     -----------    -----------    -----------

                         Net provision (benefit) for income taxes    $     5,625    $    17,650    $   (18,497)
                                                                     ===========    ===========    ===========


    The provision  (benefit) for income taxes for the years ended  February 2000,  2001 and 2002,  differs from that computed at the
Federal statutory corporate tax rate as follows:

                  EMMIS:
                                                                        2000           2001            2002
                                                                     -----------    -----------    -----------

                         Computed income taxes at 35%                $     3,102    $    10,985    $   (31,026)
                         State income tax                                    494          1,138           (282)
                         Nondeductible foreign losses                        893          1,778          1,084
                         Nondeductible goodwill                            1,394          1,537          2,637
                         Nondeductible interest                                -              -            616
                         Other                                               992          2,212          1,348
                                                                     -----------    -----------    -----------
                         Provision (benefit) for income taxes        $     6,875    $    17,650    $   (25,623)
                                                                     ===========    ===========    ===========



                  EOC:
                                                                        2000           2001            2002
                                                                     -----------    -----------    -----------

                         Computed income taxes at 35%                $     3,102    $    10,985    $   (22,620)
                         State income tax                                    494          1,138           (282)
                         Nondeductible foreign losses                        893          1,778          1,084
                         Nondeductible goodwill                            1,394          1,537          2,637
                         Nondeductible interest                                -              -              -
                         Other                                               992          2,212          1,348
                                                                     -----------    -----------    -----------
                         Provision (benefit) for income taxes        $     6,875    $    17,650    $   (17,833)
                                                                     ===========    ===========    ===========



    The components of deferred tax assets and deferred tax liabilities at February 2001 and 2002 are as follows:

                  EMMIS:
                                                                                      2001              2002
                                                                                  -------------    -------------
                         Deferred tax assets:
                           Net operating loss carryforwards                       $       2,183    $       44,443
                           Compensation relating to stock options                         3,373             5,601
                           Non-cash interest expense                                          -             8,412
                           Impairment loss                                                    -             3,444
                           Other                                                          5,257             8,731
                           Valuation allowance                                           (1,506)           (2,017)
                                                                                  -------------    --------------
                             Total deferred tax assets                                    9,307    $       68,614
                                                                                  -------------    --------------
                         Deferred tax liabilities
                           Intangible assets                                           (136,526)         (167,130)
                           Other                                                         (8,249)           (2,682)
                                                                                  -------------    --------------
                             Total deferred tax liabilities                            (144,775)         (169,812)
                                                                                  -------------    --------------
                             Net deferred tax liability                           $    (135,468)   $     (101,198)
                                                                                  =============    ==============


                  EOC:
                                                                                      2001              2002
                                                                                  -------------    -------------
                         Deferred tax assets:
                           Net operating loss carryforwards                       $       2,183    $       45,065
                           Compensation relating to stock options                         3,373             5,601
                           Non-cash interest expense                                          -                 -
                           Impairment loss                                                    -             3,444
                           Other                                                          5,257             8,731
                           Valuation allowance                                           (1,506)           (2,017)
                                                                                  -------------    --------------
                             Total deferred tax assets                                    9,307            60,824
                                                                                  -------------    --------------
                         Deferred tax liabilities
                           Intangible assets                                           (136,526)         (167,130)
                           Other                                                         (8,249)           (2,682)
                                                                                  -------------    --------------
                             Total deferred tax liabilities                            (144,775)         (169,812)
                                                                                  -------------    --------------
                             Net deferred tax liability                           $    (135,468)   $     (108,988)
                                                                                  =============    ==============


    A valuation  allowance  is provided  when it is more likely  than not that some  portion of the  deferred  tax asset will not be
realized.  A valuation  allowance has been  provided for the net  operating  loss  carryforwards  related to the  Company's  foreign
subsidiaries  since these  subsidiaries  have not yet generated  taxable  income  against  which the net  operating  losses could be
utilized.  With respect to Emmis,  the expiration of net operating loss  carryforwards,  excluding those at the Company's  Hungarian
subsidiary,  which do not expire,  approximate  $1,177 in 2005,  $758 in 2006 and  $103,686  thereafter.  With  respect to EOC,  the
expiration  of net  operating  loss  carryforwards,  excluding  those at the Company's  Hungarian  subsidiary,  which do not expire,
approximate $1,177 in 2005, $758 in 2006 and $104,672 thereafter.



11.  SEGMENT INFORMATION

    The Company's  operations  are aligned into four business  segments:  Radio,  Television,  Publishing,  and  Interactive.  These
business  segments are  consistent  with the  Company's  management  of these  businesses  and its  financial  reporting  structure.
Corporate represents expense not allocated to reportable segments.

    The Company's  segments operate  primarily in the United States with one radio station located in Hungary and two radio stations
located in Argentina.  Total  revenues of the radio station in Hungary for the years ended  February  2000,  2001 and 2002 were $7.4
million,  $6.2 million and $7.2 million,  respectively.  This station's long lived assets as of February 28, 2001 and 2002 were $9.6
million and $6.9 million,  respectively.  Total  revenues of the radio  stations in Argentina for the years ended  February 28, 2001
and 2002 were $8.4 million and $9.5 million,  respectively.  Total  revenues for these stations were not material for the year ended
February 29,  2000.  Long lived assets for these  stations as of February  28, 2001 and 2002 were $18.4  million and $10.0  million,
respectively.

    The Company evaluates  performance of its operating  entities based on broadcast cash flow (BCF) and publishing cash flow (PCF).
Management  believes  that BCF and PCF are useful  because they provide a meaningful  comparison  of operating  performance  between
companies in the industry and serve as an  indicator  of the market  value of a group of stations or  publishing  entities.  BCF and
PCF are generally  recognized by the broadcast and publishing  industries as a measure of  performance  and are used by analysts who
report on the  performance  of  broadcasting  and  publishing  groups.  BCF and PCF do not take into  account  Emmis'  debt  service
requirements and other  commitments and,  accordingly,  BCF and PCF are not necessarily  indicative of amounts that may be available
for dividends, reinvestment in Emmis' business or other discretionary uses.

         BCF and PCF are not measures of liquidity or of performance in accordance with  accounting  principles  generally  accepted
in the United  States,  and should be viewed as a supplement  to, and not a substitute  for, our results of operations  presented on
the basis of accounting  principles  generally accepted in the United States.  Moreover,  BCF and PCF are not standardized  measures
and may be  calculated  in a number  of ways.  Emmis  defines  BCF and PCF as  revenues  net of  agency  commissions  and  operating
expenses.  The primary source of broadcast  advertising revenues is the sale of advertising time to local and national  advertisers.
Publishing  entities derive revenue from  subscriptions and sale of print advertising  inventory.  Interactive  derives revenue from
the sale of  advertisements  on the websites of the  Company's  stations.  The most  significant  broadcast  operating  expenses are
employee  salaries  and  commissions,  costs  associated  with  programming,  advertising  and  promotion,  and station  general and
administrative  costs.  Significant  publishing  operating  expenses are employee  salaries and  commissions,  costs associated with
producing a magazine,  and general and administrative  costs.  Significant  interactive operating expenses are employee salaries and
general and administrative costs.

YEAR ENDED FEBRUARY 28, 2002              Radio        Television     Publishing     Interactive     Corporate     Consolidated
                                      -------------  -------------   -------------  -------------  -------------   -------------
Net revenues                          $     256,619  $     205,460   $      70,880  $         821  $           -   $     533,780
Operating expenses                          142,872        139,256          64,437          1,550              -         348,115
                                      -------------  -------------   -------------  -------------  -------------   -------------
Broadcast/publishing cash flow              113,747         66,204           6,443           (729)             -         185,665
Corporate expenses                                -              -               -              -         20,283          20,283
Depreciation and amortization                33,507         53,513           8,477              9          4,752         100,258
Time brokerage fees                             479              -               -              -              -             479
Non-cash compensation                             -              -               -              -          9,095           9,095
Impairment loss and other                     9,063          1,609               -              -              -          10,672
Restructuring fees                                -              -               -              -            768             768
                                      -------------  -------------   -------------  -------------  -------------   -------------
Operating income (loss)               $      70,698  $      11,082   $      (2,034) $        (738) $     (34,898)  $      44,110
                                      =============  =============   =============  =============  =============   =============
Total assets                          $   1,037,598  $   1,288,428   $      88,913  $         248  $      94,882   $   2,510,069
                                      =============  =============   =============  =============  =============   =============

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

YEAR ENDED FEBRUARY 28, 2001              Radio        Television     Publishing     Interactive     Corporate     Consolidated
                                      -------------  -------------   -------------  -------------  -------------   -------------
Net revenues                          $     239,590  $     156,835   $      74,088  $         105  $           -   $     470,618
Operating expenses                          132,918         97,327          65,538            622              -         296,405
                                      -------------  -------------   -------------  -------------  -------------   -------------
Broadcast/publishing cash flow              106,672         59,508           8,550           (517)             -         174,213
Corporate expenses                                -              -               -              -         17,601          17,601
Depreciation and amortization                21,470         33,574          14,941              5          4,028          74,018
Time brokerage fees                           7,344              -               -              -              -           7,344
Non-cash compensation                             -              -               -              -          5,400           5,400
Impairment loss and other                     2,000              -               -              -              -           2,000
Restructuring fees                                -              -               -              -          2,057           2,057
                                      -------------  -------------   -------------  -------------  -------------   -------------
Operating income (loss)               $      75,858  $      25,934   $      (6,391) $        (522) $     (29,086)  $      65,793
                                      =============  =============   =============  =============  =============   =============
Total assets                          $     920,002  $   1,312,270   $      96,550  $          26  $     178,024   $   2,506,872
                                      =============  =============   =============  =============  =============   =============

YEAR ENDED FEBRUARY 29, 2000              Radio        Television     Publishing     Interactive      Corporate    Consolidated
                                      -------------  -------------   -------------  -------------  -------------   ------------
Net revenues                          $     189,000  $      82,160   $      54,105  $           -  $           -   $     325,265
Operating expenses                          100,184         53,178          46,456              -              -         199,818
                                      -------------  -------------   -------------  -------------  -------------   -------------
Broadcast/publishing cash flow               88,816         28,982           7,649              -              -         125,447
Corporate expenses                                -              -               -              -         15,430          15,430
Depreciation and amortization                16,694         17,138           6,934              -          3,395          44,161
Time brokerage fees                               -              -               -              -              -               -
Non-cash compensation                             -              -               -              -          7,357           7,357
Impairment loss and other                         -              -               -              -              -               -
Restructuring fees                              896              -               -              -              -             896
                                      -------------  -------------   -------------  -------------  -------------   -------------
Operating income (loss)               $      71,226  $      11,844   $         715  $           -  $     (26,182)  $      57,603
                                      =============  =============   =============  =============   ============   =============
Total assets                          $     474,403  $     701,672   $      68,927  $           -  $      82,304   $   1,327,306
                                      =============  =============   =============  =============  =============   =============


12.  RELATED PARTY TRANSACTIONS

    Two officers of Emmis are partners in a law firm which provides  legal services to Emmis.  Legal fees paid to this law firm were
approximately $756, $926 and $606 for the years ended February 2000, 2001 and 2002, respectively.

    Emmis  has made  interest-bearing  loans to  various  officers  and  employees.  The  approximate  amount  of such  indebtedness
outstanding at February 28, 2001 and 2002, was $1,072 and $1,117,  respectively,  net of an allowance of $849 and $0,  respectively.
These loans bear interest at the Company's average  borrowing rate of approximately  8.0% and 7.6% for the years ended February 2001
and 2002.

    During the year ended February 28, 2002, the Company  purchased  approximately $26 in corporate gifts and specialty items from a
company owned by the spouse of Norman H. Gurwitz.  Also during the last fiscal year,  Emmis made payments of  approximately  $258 to
a company  owned by Mr.  Smulyan for use of an airplane to transport  employees to various  trade shows and  meetings.  Furthermore,
Emmis made  payments  of $405 to a  management  company  for direct  operating  expenses  incurred by Emmis' use of the plane and an
allocation of certain maintenance costs of the airplane.

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


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

    Emmis  conducts a  significant  portion of its  business  through  subsidiaries.  The  senior  subordinated  notes are fully and
unconditionally  guaranteed,  jointly and severally, by certain direct and indirect subsidiaries (the "Subsidiary  Guarantors").  As
of February 28, 2002,  subsidiaries  holding  Emmis'  interest in its radio  stations in Hungary and  Argentina,  as well as certain
other subsidiaries  conducting joint ventures with third parties,  did not guarantee the senior  subordinated notes (the "Subsidiary
Non-Guarantors").  The claims of creditors of Emmis  subsidiaries  have  priority  over the rights of Emmis to receive  dividends or
distributions from such subsidiaries.

    Presented below is condensed  consolidating financial information for the Parent Company Only, the Subsidiary Guarantors and the
Subsidiary Non-Guarantors as of February 28, 2001 and 2002 and for each of the three years in the period ended February 28, 2002.

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


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


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

CURRENT ASSETS:
   Cash and cash equivalents                    $           -  $      4,970  $     1,392  $            -  $       6,362
   Accounts receivable, net                                 -        91,244        3,996               -         95,240
   Current portion of TV
     program rights                                         -         9,837            -               -          9,837
   Income tax refunds receivable                            -             -            -               -              -
   Prepaid expenses                                       612        14,049          186               -         14,847
   Other                                                  271        13,475           74               -         13,820
   Assets held for sale                                     -       123,416            -               -        123,416
                                                -------------  ------------  -----------  --------------  -------------
     Total current assets                                 883       256,991        5,648               -        263,522

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

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

Credit facility and senior
   subordinated debt                                1,117,000             -            -               -      1,117,000
TV program rights payable,
   net of current portion                                   -        40,551            -               -         40,551
Other long-term debt, net of
   current portion                                         41           366        9,172          (2,630)         6,949
Other noncurrent liabilities                           21,976         4,403          587               -         26,966
Deferred income taxes                                 108,988             -            -               -        108,988
                                                -------------  ------------  -----------  --------------  -------------
   Total liabilities                                1,415,759       118,623       25,753          (5,463)     1,554,672

Shareholders' equity
   Common stock                                     1,027,221             -            -               -      1,027,221
   Additional paid-in capital                           8,108             -        4,393          (4,393)         8,108
   Subsidiary investment                                    -     1,883,897       20,650      (1,904,547)             -
   Retained earnings /
     (accumulated deficit)                            (78,477)      393,662      (21,380)       (372,282)       (78,477)
   Accumulated other
     comprehensive loss                               (12,385)            -       (6,901)          6,901        (12,385)
                                                -------------  ------------  -----------  --------------  -------------
     Total shareholders' equity                       944,467     2,277,559       (3,238)     (2,274,321)       944,467
                                                -------------  ------------  -----------  --------------  -------------
       Total liabilities and
         shareholders' equity                   $   2,360,226  $  2,396,182  $    22,515  $   (2,279,784) $   2,499,139
                                                =============  ============  ===========  ==============  =============


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


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

Net revenues                                   $       1,695  $   515,387  $    16,698  $          -   $    533,780
   Operating expenses                                  1,204      332,311       14,600             -        348,115
   Corporate expenses                                 20,283            -            -             -         20,283
   Depreciation and amortization                       4,752       91,979        3,527             -        100,258
   Non-cash compensation                               6,821        2,274            -             -          9,095
   Time brokerage agreement fees                           -          479            -             -            479
   Impairment loss and other                               -       10,672            -             -         10,672
   Restructuring fees                                    768            -            -             -            768
                                               -------------  -----------  -----------  ------------   ------------
Operating income (loss)                              (32,133)      77,672       (1,429)            -         44,110
                                               -------------  -----------  -----------  ------------   ------------
Other income (expense)
   Interest income (expense)                        (102,109)        (285)      (2,324)          616       (104,102)
   Income (loss) from unconsolidated
    affiliates                                        (4,232)        (771)           -             -         (5,003)
   Other income (expense), net                         1,403         (466)        (756)          179            360
                                               -------------  -----------  -----------  ------------   ------------
Total other income (expense)                        (104,938)      (1,522)      (3,080)          795       (108,745)
                                               -------------  -----------  -----------  ------------   ------------

Income (loss) before income taxes                   (137,071)      76,150       (4,509)          795        (64,635)

Provision (benefit) for income taxes                 (46,770)      28,937            -             -        (17,833)
                                               -------------  -----------  -----------  ------------   ------------
Income (loss) before extraordinary loss              (90,301)      47,213       (4,509)          795        (46,802)
Extraordinary loss, net of tax                         1,084            -            -             -          1,084
Equity in earnings (loss) of subsidiaries             43,499            -            -       (43,499)             -
                                               -------------  -----------  -----------  ------------   ------------
Net income (loss)                              $     (47,886) $    47,213  $    (4,509) $    (42,704)  $    (47,886)
                                               =============  ===========  ===========   ===========   ============


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

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

CASH FLOWS FROM OPERATING
   ACTIVITIES:
   Net income (loss)                           $     (47,886) $    47,213  $    (4,509) $    (42,704)  $    (47,886)
   Adjustments to reconcile net
     income (loss) to net cash
     provided by (used in) operating
     activities -
     Extraordinary item                                1,084            -            -             -          1,084
     Depreciation and amortization                    10,226      110,582        3,527             -        124,335
     Provision for bad debts                               -        4,005            -             -          4,005
     Provision (benefit) for deferred
       income taxes                                 (17,833)            -            -             -        (17,833)
     Non-cash compensation                             6,821        2,274            -             -          9,095
     Equity in earnings of subsidiaries              (43,499)           -            -        43,499              -
     Impairment of asset                                   -        9,063            -             -          9,063
     Other                                               795          375       (6,303)         (795)        (5,928)
   Changes in assets and
     liabilities -
     Accounts receivable                                   -       (3,649)        1,531            -         (2,118)
     Prepaid expenses and other
       current assets                                  3,082        1,202          843             -          5,127
     Other assets                                      2,057       (9,364)       1,355             -         (5,952)
     Accounts payable and accrued
       liabilities                                     5,035       (6,965)        (779)            -         (2,709)
     Deferred revenue                                      -         (963)           -             -           (963)
     Other liabilities                                24,482      (15,553)     (10,856)            -         (1,927)
                                               -------------  -----------  -----------  ------------   ------------
       Net cash provided by (used in)
         operating activities                        (55,636)     138,220      (15,191)            -         67,393
                                               -------------  -----------  -----------  ------------   ------------

CASH FLOWS FROM INVESTING
   ACTIVITIES:
   Purchase of property and
     equipment                                        (2,252)     (27,299)       1,135             -        (28,416)
   Cash paid for acquisitions                              -     (140,746)           -             -       (140,746)
   Deposits on acquisitions and other                 (5,943)           -            -             -         (5,943)
                                               -------------  -----------  -----------  ------------   ------------
       Net cash provided by (used in)
         investing activities                         (8,195)    (168,045)       1,135             -       (175,105)
                                               -------------  -----------  -----------  ------------   ------------

CASH FLOWS FROM FINANCING
   ACTIVITIES:
   Payments on long-term debt                       (133,000)           -            -             -       (133,000)
   Proceeds from long-term debt                        5,000            -            -             -          5,000
   Intercompany                                      141,250       30,777       14,742             -        186,769
   Debt related costs                                 (4,594)           -            -             -         (4,594)
                                               -------------  -----------  -----------  ------------   ------------
       Net cash provided by
         financing activities                          8,656       30,777       14,742             -         54,175
                                               -------------  -----------  -----------  ------------   ------------


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

CASH AND CASH EQUIVALENTS:
   Beginning of period                                55,175        4,018          706             -         59,899
                                               -------------  -----------  -----------  ------------   ------------
   End of period                               $           -  $     4,970  $     1,392  $          -   $      6,362
                                               =============  ===========  ===========  ============   ============


                                                          Emmis Operating Company
                                                   Condensed Consolidating Balance Sheet
                                                          As of February 28, 2001


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

CURRENT ASSETS:
   Cash and cash equivalents                    $      55,175  $      4,018  $       706  $            -  $      59,899
   Accounts receivable, net                                 -        91,754        5,527               -         97,281
   Current portion of TV
     program rights                                         -        12,028            -               -         12,028
   Income tax refunds receivable                       13,970             -            -               -         13,970
   Prepaid expenses                                     2,032        14,646          327               -         17,005
   Other                                                1,932        12,124          776               -         14,832
   Assets held for sale                                     -       134,983            -               -        134,983
                                                -------------  ------------  -----------  --------------  -------------
     Total current assets                              73,109       269,553        7,336               -        349,998

   Property and equipment, net                         38,151       189,350        4,332               -        231,833
   Intangible assets, net                                   -     1,830,503       21,756               -      1,852,259
   Investment in affiliates                         2,169,004             -            -      (2,169,004)             -
   Other assets, net                                   68,113         9,706        1,882          (6,919)        72,782
                                                -------------  ------------  -----------  --------------  -------------
     Total assets                               $   2,348,377  $  2,299,112  $    35,306  $   (2,175,923) $   2,506,872
                                                =============  ============   ==========   =============   ============

CURRENT LIABILITIES:
   Accounts payable                             $       6,908  $     22,499  $     4,799  $            -  $      34,206
   Current maturities of other
     long-term debt                                        34            18        4,135               -          4,187
   Current portion of TV
     program rights payable                                 -        28,192            -               -         28,192
   Accrued salaries and
     commissions                                        1,410         8,482          450               -         10,342
   Accrued interest                                    16,236             -          802               -         17,038
   Deferred revenue                                         -        17,397            -               -         17,397
   Other                                                  813         4,955            -               -          5,768
   Liabilities associated with
     assets held for sale                                   -            21            -               -             21
                                                 ------------  ------------   ----------  --------------  -------------
     Total current liabilities                         25,401        81,564       10,186               -        117,151

Credit facility and senior
   subordinated debt                                1,380,000             -            -               -      1,380,000
TV program rights payable,
   net of current portion                                   -        47,567            -               -         47,567
Other long-term debt, net of
   current portion                                         37           598       19,968          (6,919)        13,684
Other noncurrent liabilities                                -         4,884          647               -          5,531
Deferred income taxes                                 135,468             -            -               -        135,468
                                                -------------  ------------  -----------  --------------  -------------
   Total liabilities                                1,540,906       134,613       30,801          (6,919)     1,699,401

Shareholders' equity
   Common stock                                       830,799             -            -               -        830,799
   Additional paid-in capital                               -             -        4,393          (4,393)             -
   Subsidiary investment                                    -     1,818,050       17,581      (1,835,631)             -
   Retained earnings /
     (accumulated deficit)                            (22,730)      346,449      (16,871)       (329,578)       (22,730)
   Accumulated other
     comprehensive loss                                  (598)            -         (598)            598           (598)
                                                -------------  ------------  -----------  --------------  -------------
Total shareholders' equity                            807,471     2,164,499        4,505      (2,169,004)       807,471
                                                -------------  ------------  -----------  --------------  -------------
       Total liabilities and
         shareholders' equity                   $   2,348,377  $  2,299,112  $    35,306  $  (2,175,923)  $   2,506,872
                                                =============  ============  ===========  =============   =============


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


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

Net revenues                                   $       1,876  $   454,164  $    14,578  $          -   $    470,618
   Operating expenses                                  1,692      281,409       13,304             -        296,405
   Corporate expenses                                 17,601            -            -             -         17,601
   Depreciation and amortization                       4,028       66,527        3,463             -         74,018
   Non-cash compensation                               4,050        1,350            -             -          5,400
   Time brokerage agreement fees                           -        7,344            -             -          7,344
   Corporate restructuring fees
     and other                                         2,057        2,000            -             -          4,057
                                               -------------  -----------  -----------  ------------   ------------
Operating income (loss)                              (27,552)      95,534       (2,189)            -         65,793
                                               -------------  -----------  -----------  ------------   ------------
Other income (expense)
   Interest income (expense)                         (69,608)        (297)      (3,221)          682        (72,444)
   Other income (expense), net                        11,972       26,977         (354)         (558)        38,037
                                               -------------  -----------  -----------  ------------   ------------
Total other income (expense)                         (57,636)      26,680       (3,575)          124        (34,407)
                                               -------------  -----------  -----------  ------------   ------------

Income (loss) before income taxes                    (85,188)     122,214       (5,764)          124         31,386

Provision (benefit) for income
   taxes                                             (28,201)      45,851            -             -         17,650
                                               -------------  -----------  -----------  ------------   ------------
                                                     (56,987)      76,363       (5,764)          124         13,736
Equity in earnings (loss) of
   subsidiaries                                       70,723            -            -       (70,723)             -
                                               -------------  -----------  -----------  ------------   ------------
Net income (loss)                              $      13,736  $    76,363  $    (5,764) $    (70,599)  $     13,736
                                               =============  ===========  ===========  ============   ============


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

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

CASH FLOWS FROM OPERATING
   ACTIVITIES:
   Net income (loss)                             $    13,736  $    76,363  $    (5,764) $    (70,599)  $     13,736
   Adjustments to reconcile net
     income (loss) to net cash
     provided by (used in) operating
     activities -
     Depreciation and amortization                     9,758       81,233        3,463             -         94,454
     Provision for bad debts                               -        3,713            -             -          3,713
     Provision for deferred income
       taxes                                          15,810            -            -             -         15,810
     Non-cash compensation                             4,050        1,350            -             -          5,400
     Equity in earnings of
       subsidiaries                                  (70,723)           -            -        70,723              -
     Gain on exchange of assets                            -      (22,000)           -             -        (22,000)
     Other                                               379          348          861          (124)         1,464
   Changes in assets and
     liabilities -
     Accounts receivable                                   -       (7,114)      (2,202)            -         (9,316)
     Prepaid expenses and other
       current assets                               (12,716)      (11,527)        (384)            -        (24,627)
     Other assets                                     10,435        1,216          448             -         12,099
     Accounts payable and accrued
       liabilities                                     9,070        5,493          778             -         15,341
     Deferred revenue                                      -          569            -             -            569
     Other liabilities                                  (220)     (23,096)       3,544             -        (19,772)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash provided by (used in)
         operating activities                        (20,421)     106,548          744             -         86,871
                                                 -----------  -----------  -----------  ------------   ------------

CASH FLOWS FROM INVESTING
   ACTIVITIES:
   Purchase of property and
     equipment                                        (3,683)     (22,323)        (219)            -        (26,225)
   Cash paid for acquisitions                              -   (1,060,681)           -             -     (1,060,681)
   Deposits on acquisitions and other                (23,849)           -            -             -        (23,849)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash used in investing
         activities                                  (27,532)  (1,083,004)        (219)            -     (1,110,755)
                                                 -----------  -----------  -----------  ------------   ------------

CASH FLOWS FROM FINANCING
   ACTIVITIES:
   Payments on long-term debt                     (1,048,388)           -       (3,161)            -     (1,051,549)
   Proceeds from long-term debt                    2,128,388            -            -             -      2,128,388
   Intercompany                                     (956,225)     977,910      (11,016)            -         10,669
   Debt related costs                                (21,095)           -            -             -        (21,095)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash provided by
         financing activities                        102,680      977,910      (14,177)            -      1,066,413
                                                 -----------  -----------  -----------  ------------   ------------

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

CASH AND CASH EQUIVALENTS:
   Beginning of period                                   448        2,564       14,358             -         17,370
                                                 -----------  -----------  -----------  ------------   ------------
   End of period                                 $    55,175  $     4,018  $       706  $          -   $     59,899
                                                 ===========  ===========  ===========  ============   ============


                                                      Emmis Operating Company
                                          Condensed Consolidating Statement of Operations
                                                For the Year Ended February 29, 2000

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

Net revenues                                   $       1,810  $   314,644  $     8,811  $          -   $    325,265
   Operating expenses                                  1,252      191,666        6,900             -        199,818
   Corporate expenses                                 15,430            -            -             -         15,430
   Depreciation and amortization                       3,395       37,733        3,033             -         44,161
   Non-cash compensation                               5,518        1,839            -             -          7,357
   Time brokerage agreement fees                           -            -            -             -              -
   Programming restructuring cost                          -          896            -             -            896
Operating income (loss)                              (23,785)      82,510       (1,122)            -         57,603
                                               -------------  -----------  -----------  ------------   ------------
Other income (expense)
   Interest income (expense)                         (49,257)        (107)      (3,363)          741        (51,986)
   Loss on donation of station                             -         (956)           -             -           (956)
   Other income (expense), net                         3,428           13         (502)        1,264          4,203
                                               -------------  -----------  -----------  ------------   ------------
Total other income (expense)                         (45,829)      (1,050)      (3,865)        2,005        (48,739)
                                               -------------  -----------  -----------  ------------   ------------

Income (loss) before income taxes                    (69,614)      81,460       (4,987)        2,005          8,864

Provision (benefit) for income
   taxes                                             (22,689)      29,564            -             -          6,875
                                               -------------  -----------  -----------  ------------   ------------
                                                     (46,925)      51,896       (4,987)        2,005          1,989
Extraordinary item, net of tax                        (2,022)           -            -             -         (2,022)
Equity in earnings (loss) of
   subsidiaries                                       48,914            -            -       (48,914)             -
                                               -------------  -----------  -----------  ------------   ------------
Net income (loss)                              $         (33) $    51,896  $    (4,987) $    (46,909)  $        (33)
                                               =============  ===========  ===========  ============   ============


                                                      Emmis Operating Company
                                          Condensed Consolidating Statement of Cash Flows
                                                For the Year Ended February 29, 2000

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

CASH FLOWS FROM OPERATING
   ACTIVITIES:
   Net income (loss)                             $      (33)  $    51,896  $    (4,987) $    (46,909)  $        (33)
   Adjustments to reconcile net
     income (loss) to net cash
    provided by (used in) operating
     activities -
     Extraordinary item                                2,022            -            -             -          2,022
     Depreciation and amortization                     5,805       44,980        3,033             -         53,818
     Provision for bad debts                               -        2,550            -             -          2,550
     Provision for deferred income
       taxes                                           6,670            -            -             -          6,670
     Non-cash compensation                             5,518        1,839            -             -          7,357
     Equity in earnings of
       subsidiaries                                  (48,914)           -            -        48,914              -
     Gain on exchange of assets                            -            -            -             -              -
     Loss on donation of radio station                     -          956            -             -            956
     Other                                             2,033            -         (811)       (2,005)          (783)
   Changes in assets and
     liabilities -
     Accounts receivable                                   -      (13,029)        (290)            -        (13,319)
     Prepaid expenses and other
       current assets                                 (1,258)     (13,101)        (187)            -        (14,546)
     Other assets                                     (8,393)       7,382       (1,496)             -        (2,507)
     Accounts payable and accrued
       liabilities                                      (391)       9,255        1,301             -         10,165
     Deferred revenue                                      -        4,332            -             -          4,332
     Other liabilities                               (13,278)     (19,933)           -             -        (33,211)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash provided by (used in)
         operating activities                        (50,219)      77,127       (3,437)            -         23,471
                                                 -----------  -----------  -----------  ------------   ------------

CASH FLOWS FROM INVESTING
   ACTIVITIES:
   Purchase of property and
     equipment                                        (8,124)     (21,170)         (22)            -        (29,316)
   Cash paid for acquisitions                              -     (217,828)     (13,302)            -       (231,130)
   Deposits on acquisitions and other                 (5,000)      (6,500)           -             -        (11,500)
                                                 -----------  -----------  -----------  ------------   ------------
       Net cash used in investing
         activities                                  (13,124)    (245,498)     (13,324)            -       (271,946)
                                                 -----------  -----------  -----------  ------------   ------------

CASH FLOWS FROM FINANCING
   ACTIVITIES:
   Payments on long-term debt                       (426,668)           -            -             -       (426,668)
   Proceeds from long-term debt                      149,668            -            -             -        149,668
   Intercompany                                      338,505      167,789       30,434             -        536,728
   Debt related costs                                      -            -            -             -              -
                                                 -----------  -----------  -----------  ------------   ------------
   Net cash provided by
      financing activities                            61,505      167,789       30,434             -        259,728
                                                 -----------  -----------  -----------  ------------   ------------
INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                               (1,838)        (582)      13,673             -         11,253

CASH AND CASH EQUIVALENTS:
   Beginning of period                                 2,286        3,146          685             -          6,117
                                                 -----------  -----------  -----------  ------------   ------------
   End of period                                 $       448  $     2,564  $    14,358  $          -   $     17,370
                                                 ===========  ===========  ===========  ============   ============



14.      SUBSEQUENT EVENTS

    In April 2002, ECC completed the sale of 4.6 million  shares of its Class A common stock at $26.80 per share  resulting in total
proceeds  of $123.3  million.  The net  proceeds  of $120.2 were  contributed  to EOC, of which 50% were used to repay  outstanding
obligations  under the credit  facility.  The remaining net proceeds  were  invested and will either repay  outstanding  obligations
under the credit facility or redeem or repurchase some of Emmis' outstanding 121/2% senior discount notes.

    Effective May 1, 2002 Emmis  completed the sale of  substantially  all of the assets of KALC-FM in Denver,  Colorado to Entercom
Communications  Corporation  for $88.0  million.  Emmis had  purchased  KALC-FM  on January  17,  2001,  from  Salem  Communications
Corporation  for $98.8 million in cash plus a commitment  fee of $1.2 million and  transaction  related  costs of $0.9  million.  On
February  12, 2002,  Emmis  entered into a definitive  agreement to sell KALC-FM to Entercom and Entercom  began  operating  KALC-FM
under a time  brokerage  agreement on March 16, 2002.  Proceeds were used to repay amounts  outstanding  under the credit  facility.
The assets of KALC-FM are reflected as held for sale in the accompanying  consolidated  balance sheets.  The $87.7 million of credit
facility  debt repaid  with the net  proceeds of the sale is  reflected  as a current  liability  in the  accompanying  consolidated
balance sheets.

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

    In connection with the $255.7 million of completed or planned debt repayments described above, Emmis expects to write-off
approximately $4 million of deferred debt costs in the first quarter of our fiscal 2003.

15.  QUARTERLY FINANCIAL DATA (UNAUDITED)

         EMMIS
                                                                                 Quarter Ended
                                                          ---------------------------------------------------------
                                                                                                                           Full
                                                            May 31         Aug. 31         Nov. 30        Feb. 28          Year
                                                          -----------    -----------    -----------     -----------    -----------

Year ended February 28, 2001
   Net revenues                                           $   100,519    $   109,069    $   143,606     $   117,424    $   470,618
   Operating income (loss)                                     18,603         25,223         26,164          (4,197)        65,793
   Net income (loss) before extraordinary item                  5,911         16,638         11,566         (20,379)        13,736
Net income (loss) available to common shareholders              3,665         14,392          9,320         (22,625)         4,752
   Basic earnings per common share:
     Before extraordinary item                            $      0.08    $      0.31    $      0.20     $    (0.48)    $      0.10
     Net income (loss) available to common shareholders   $      0.08    $      0.31    $      0.20     $    (0.48)    $      0.10
   Diluted earnings per common share:
     Before extraordinary item                            $      0.08    $      0.30    $      0.20     $    (0.48)    $      0.10
     Net income (loss) available to common shareholders   $      0.08    $      0.30    $      0.20     $    (0.48)    $      0.10

Year ended February 28, 2002
   Net revenues                                           $   137,335    $   142,447    $   137,119     $   116,879    $   533,780
   Operating income (loss)                                     15,399         25,691         16,824         (13,804)        44,110
   Net income (loss) before extraordinary item                (13,477)        (6,070)       (11,698)        (31,779)       (63,024)
   Net income (loss) available to common shareholders         (15,723)        (9,400)       (13,944)        (34,025)       (73,092)
   Basic earnings per common share:
     Before extraordinary item                            $    (0.33)    $     (0.18)   $     (0.29)    $     (0.72)   $     (1.52)
     Net income (loss) available to common shareholders   $    (0.33)    $     (0.20)   $     (0.29)    $     (0.72)   $     (1.54)
   Diluted earnings per common share:
     Before extraordinary item                            $    (0.33)    $     (0.18)   $     (0.29)    $     (0.72)   $     (1.52)
     Net income (loss) available to common shareholders   $    (0.33)    $     (0.20)   $     (0.29)    $     (0.72)   $     (1.54)



         EOC
                                                                                 Quarter Ended
                                                          ---------------------------------------------------------
                                                                                                                           Full
                                                            May 31         Aug. 31         Nov. 30        Feb. 28          Year
                                                          -----------    -----------    -----------     -----------    -----------

   Year ended February 28, 2001
     Net revenues                                         $   100,519    $   109,069    $   143,606     $   117,424    $   470,618
     Operating income (loss)                                   18,603         25,223         26,164          (4,197)        65,793
     Net income (loss)                                          5,911         16,638         11,566         (20,379)        13,736


   Year ended February 28, 2002
     Net revenues                                         $   137,335    $   142,447    $   137,119     $   116,879    $   533,780
     Operating income (loss)                                   15,399         25,691         16,824         (13,804)        44,110
     Net income (loss) before extraordinary item              (10,862)        (2,079)        (7,268)        (26,593)       (46,802)
     Net income (loss)                                        (10,862)        (3,163)        (7,268)        (26,593)       (47,886)


                                                REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

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

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

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

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



                                                                                        /s/   ARTHUR ANDERSEN LLP
                                                                                        -------------------------

                                                                                        ARTHUR ANDERSEN LLP



Indianapolis, Indiana,
May 2, 2002.

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

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required by this item with respect to directors or nominees to be directors of Emmis is incorporated by
reference from the section entitled "Proposal No. 1: Election of Directors" in the Emmis 2002 Proxy Statement and the section
entitled "Compliance with Section 16(a) of the Securities Exchange Act of 1934" in the Emmis 2002 Proxy Statement.

Listed below is certain information about the executive officers of Emmis or its affiliates who are not directors or nominees
to be directors.

AGE AT YEAR FIRST
FEBRUARY 28, ELECTED
NAME POSITION 2002 OFFICER
---------------------- ------------------------------ ------------- -------------
Randy Bongarten Television Division President 51 2000

Richard F. Cummings Radio Division President 49 1984

Norman H. Gurwitz Executive Vice President- 53 1987
Human
Resources and Secretary

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

Randy Bongarten is employed as President of Emmis Television since October 2000 and President of Emmis International since June
1998. Prior to June 1998, Mr. Bongarten had served as President of GAF Broadcasting and as Executive Vice President of Operations
for Emmis Radio Division.

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

Norman H. Gurwitz currently serves as Executive Vice President -- Human Resources, a position he assumed in 1998. Previously
he served as Corporate Counsel for Emmis from 1987 to 1998 and as a Vice President from 1988 to 1995. He became Secretary of
Emmis in 1989 and became an Executive Vice President in 1995. Prior to 1987, he was a partner in the Indianapolis law firm of
Scott & Gurwitz. Mr. Gurwitz is the brother-in-law of Richard A. Leventhal, a director of the Company.

ITEM 11. EXECUTIVE COMPENSATION.

The information required by this item is incorporated by reference from the section entitled "Executive Compensation" in the
Emmis 2002 Proxy Statement.

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

The information required by this item is incorporated by reference from the section entitled "Voting Securities and Beneficial
Owners" in the Emmis 2002 Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information required by this item is incorporated by reference from the section entitled "Certain Transactions" in the Emmis
2002 Proxy Statement.
PART IV

ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K.

Financial Statements

The financial statements filed as a part of this report are set forth under Item 8.
Reports on Form 8-K

On December 13, 2001, the Company filed a Form 8-K that contained Exhibit B to the articles of incorporation for Emmis
Communications Corporation.

On February 13, 2002, the Company filed a Form 8-K to disclose quarterly pro forma financial information by business segment
for the seven quarters ended November 30, 2001.

Exhibits

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

3.1 Second Amended and Restated Articles of Incorporation of Emmis Communications Corporation, incorporated by reference
from Exhibit 3.1 to Emmis' Annual Report on Form 10-K/A for the fiscal year ended February 29, 2000, and Exhibit B to
the Second Amended and Restated Articles of Incorporation of Emmis Communications Corporation, incorporated by
reference from Exhibit 3 to Emmis' Form 8-K filed December 13, 2001.

3.2 Amended and Restated Bylaws of Emmis Communications Corporation, incorporated by reference from Exhibit 3.2 to the
Company's Form 10-K/A for the fiscal year ended February 29, 2000.

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

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



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

10.1       Emmis  Communications  Corporation  Profit  Sharing  Plan,  incorporated  by  reference  from  Exhibit  10.4 to the  1994
           Registration Statement.++

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

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

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

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

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

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

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

10.9       Employment  Agreement  dated as of March 1, 1999, by and between Emmis  Communications  Corporation and Walter Z. Berger,
           incorporated  by reference  from Exhibit 10.9 to Emmis' Annual Report on Form 10-K for the fiscal year ended February 28,
           1999.++

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

10.11      Second Amendment to Fourth Amended and Restated Revolving Credit and Term Loan Agreement.

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

10.13      Asset Purchase  Agreement,  dated as of February 12, 2002, by and among  Entercom  Communications  Corporation  and Emmis
           Communications Corporation. *

10.14      Asset Purchase Agreement,  dated as of February 12, 2002, by and among Entravision  Communications  Corporation and Emmis
           Communications Corporation. *

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

10.16 Option Agreement, dated as of June 5, 2000, by and among Hearst-Argyle Properties, Inc. and Emmis Communications
Corporation. *

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

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

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

10.20 Asset Purchase Agreement by and among Emmis Communications Corporation, Country Sampler, Inc. and Mark A. Nickel, dated
as of February 23, 1999, together with associated Consulting Agreement and Letter Agreement, incorporated by reference
from Exhibit 10.16 to Emmis' Annual Report on Form 10-K for the fiscal year ended February 28, 1999.

21 Subsidiaries of Emmis.*

23 Consent of Accountants.*

24 Powers of Attorney.*

99.1 Letter of Acknowledgement with respect to Arthur Andersen's Audit.*

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



Signatures.

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



                                                                                EMMIS COMMUNICATIONS CORPORATION




Date:             May 10, 2002                                               By:  /s/ Jeffrey H. Smulyan
                                                                                     -----------------------
                                                                                       Jeffrey H. Smulyan
                                                                                       Chairman of the Board

    Pursuant to the requirements of the Securities  Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and on the dates indicated.

                                                SIGNATURE                                         TITLE

Date:         May 10, 2002          /s/ Jeffrey H. Smulyan               President, Chairman of the Board and
                                    ----------------------
                                    Jeffrey H. Smulyan                   Director (Principal Executive Officer)

Date:         May 10, 2002          /s/ Walter Z. Berger                 Executive Vice President, Treasurer,
                                    --------------------
                                    Walter Z. Berger                     Chief Financial Officer and Director
                                                                         (Principal Accounting Officer)

Date:         May 10, 2002          Susan B. Bayh*                       Director
                                    -------------
                                    Susan B. Bayh

Date:         May 9, 2002           Gary L. Kaseff*                      Executive Vice President, General
                                    --------------
                                    Gary L. Kaseff                       Counsel and Director

Date:         May 10, 2002          Richard A. Leventhal*                Director
                                    --------------------
                                    Richard A. Leventhal

Date:         May 8, 2002           Greg A. Nathanson*                   Director
                                    -----------------
                                    Greg A. Nathanson

Date:         May 13, 2002          Frank V. Sica*                       Director
                                    -------------
                                    Frank V. Sica

Date:         May 9, 2002           Lawrence B. Sorrel*                  Director
                                    ------------------
                                    Lawrence B. Sorrel


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