Jeff Smulyan - Chairman and CEO Pat Walsh - CFO Rick Cummings - President, Emmis Radio Kate Snedeker - IR

Victor Miller - Bear Stearns Mark Wienkes - Goldman Sachs Jonathan Jacoby - Banc of America Jim Boyle - CL King Jim Goss - Barrington Research

(Operator Instructions) I will now introduce Kate Snedeker of Emmis Communications. You may begin. Kate Snedeker: Good morning and thank you for joining us for today's Emmis Communications conference call regarding third quarter earnings. I want to extend a special welcome to all the Emmis employees who are joining us and listening in this morning and those of you listening in from our web site, www.emmis.com. We'll begin in just a moment with opening comments from Emmis Chairman and CEO, Jeff Smulyan; and Pat Walsh, CFO. After their opening comments our conference call moderator will come back on the line to instruct you on how to submit questions. Joining us to help answer your questions is Rick Cummings, President of Emmis Radio. A playback of this call will be available for the next week by dialing 402-220-9725. This conference call may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Please refer to Emmis' public filings with the SEC for more information on the various risks and uncertainties. Additional disclosure related to non-GAAP financial measures can be found under the Investors tab of our web site. Jeff Smulyan: Kate, thanks. Last year on this call, we said that we thought that fiscal year 2007 or the calendar year 2006 would be a very tough year. We said that we had beaten our markets five of the six previous years, but we clearly would not do that this year. It's been a challenging year, very tough year. It's interesting. We think we've reached the bottom of the trough in this quarter. We said that three months ago. We're starting to see some things looking up, but there's no question it's still a challenging environment for American radio and that is still the bulk of our company. Interestingly enough, all of that trough for us has occurred in our two largest markets. If you break out the rest of our markets and our publishing group and our international group -- actually in our interactive group, we've had a very, very good year. But we have lived with New York and Los Angeles for a long time, and we suffer with it this year. Having said that, the thing that I'm most proud of about Emmis is not only that we think we're coming out of this cycle, but it's been a year of transition and a year of innovation in the company whether it's been in programming in some of our domestic radio stations, some of our initiatives internationally, in our publishing group, or some of the groundbreaking activities in our interactive group, we think it's been a good year. We always say around here that you learn the great lessons of life in adversity. There's no one in American media -- whether it be radio or television or newspapers -- that hasn't suffered through several years of adversity. We think that some of the steps that we've taken in the long term will pay great dividends for our shareholders and for our people in our communities and our audiences. So from that standpoint, it's been a tough year. We think that the worst is behind us now. We've taken some steps that we think will improve it. We're committed to being agents of change in our industry. I made a comment a while ago that I thought while no one in American media has found an answer, I think the people of Emmis will find some of those answers faster than anyone else. We are committed to leading, whether it's industry initiatives or programs within the company that we think are groundbreaking, and there are a number of them afoot. We also had said that we're going to undertake changes within our corporation. I took the first step, committing to $1 a year salary for this coming year. We're going to do the things for the long term that build value in this company. With that, I'll turn it over to Pat Walsh, our CFO who, by the way, I might add Mr. Walsh is a loyal graduate of the University of Michigan undergraduate school. I guess I ought to give a plug to Harvard, your graduate degree. Mr. Walsh and I had a slight wager on the Rose Bowl game this year, and Mr. Walsh is wearing a Dwayne Jarrett USC jersey this year and I really commend you for your willingness to do that, Pat. Pat Walsh: It's been a rough week for the Big 10, which frankly leads us into our third quarter numbers pretty well. Jeff Smulyan: Great transition, Pat. Pat Walsh: Thanks, Jeff, and good morning, everyone. Our diluted net loss from continuing operations for the third quarter ended November 30 was $0.09 per share compared to a $0.01 per share loss during the same quarter the prior year. The third quarter ended November 30. The loss includes a $10 million charge related to debt extinguishment and refinancing related to our sub-debt tender and our new bank facility that we put in place. On the revenue side, net revenues for the third quarter ended November 30 were $91.2 million, off 6.9% from the prior year. The decrease reflects an 11.5% decrease in domestic radio revenues, consistent with our guidance provided in last quarter's call. The domestic radio revenue decrease is indicative of continuing weakness in our two largest markets, New York and Los Angeles, offset to some degree by solid revenue growth in our other domestic radio markets and 9% revenue growth at our international radio properties. Publishing revenues for the third quarter were consistent with the prior year. Domestic radio finished off 11.5%, while our markets were off 2.1%. Excluding New York and Los Angeles, our other markets outperformed, finishing up 6% while the markets were up just 1%. In particular, our Chicago, Indianapolis and Austin markets gained share during the third quarter. Unfortunately, New York and Los Angeles continued to exhibit weakness for both Emmis and our competitors during our third fiscal quarter. The New York market was off 7% while we were off 21%. The Los Angeles market was off 1%; we were off 26%. This weakness in our key markets is the key driver of our 11.5% decrease in domestic radio revenue during the fiscal third quarter and our guidance for the fourth quarter 2007 for radio net revenues to decrease low to mid single-digits compared to the prior year. Some additional domestic radio color includes Emmis’ local performance down 16% compared to our markets being off 7%. On the national side, Emmis is up 1% while our markets were up 14%. Both negative trends are indicative of ongoing challenges in New York and L.A. Some category information domestically, automotive was off 9%; banks, movies, beverages, restaurants, media, and entertainment were all down double-digits; while healthcare and cellular saw large increases. For the third quarter, unit sellout was flat and our average unit rate was down 16%. Rick Cummings can provide some additional color on our domestic radio properties during the Q&A. On the expense side, station operating expenses in the third quarter were $100,000 lower than the prior year, reflecting a 0.5% decrease in radio expenses, offset to some degree by a 0.6% increase in publishing expenses. The decrease in station operating expenses is driven by lower sales and promotion costs, offset by higher costs related to the KZLA/KMVN format change and the new WLUP morning show. We expect station operating expenses to increase low single-digit percentage points during the fourth quarter compared to the prior year. Our corporate expenses for the third quarter were $8.4 million, including $1.8 million in costs related to our $4 per share special dividend and $1.2 million in non-cash compensation. Our corporate expense for the fourth quarter should remain in the $5 million to $6 million range. However, we are currently engaged in a process to assess all aspects of our corporate spend, and anticipate reducing our current corporate expense during the next fiscal year. We recently announced the decision by our CEO to reduce his salary to $1 next year as a first step in this important corporate initiative. While it's probably premature to fully estimate our planned corporate overhead savings, we anticipate additional reductions in our corporate overhead spend during FY08. The third quarter of '07 was also a busy quarter in terms of our capital structure. On October 20, we announced that we had redeemed 374.9 million of our outstanding 6.875% senior subordinated notes. The final $100,000 of outstanding notes were redeemed on December 29. On November 2, the company amended and restated its revolving credit and term loan agreement to provide for a $600 million facility comprised of a $455 million term loan and $145 million revolver. The same day our board approved a $4 per share special dividend, which was paid on November 22, reducing shareholder equity by $150 million. We ended the third quarter with $500 million outstanding under our bank facility, leverage, excluding our preferred stock, of approximately 6 times, and our weighted average cost of debt for the quarter at 7.28%. Finally CapEx, excluding our discontinued TV operations, was $1.1 million in the third quarter and we continue to expect our CapEx spend for the fiscal year to be in the range of $7 million to $8 million. With that, I think we'll turn it over for Q&A.

(Operator Instructions) Your first question comes from Victor Miller - Bear Stearns. Victor Miller - Bear Stearns: Thanks. A couple questions, actually. Maybe I could talk to Rick about this. In New York, how much of the market weakness do you believe is Howard Stern leaving and the disruption that's caused versus category spending being down in the market versus migration? In L.A., how is the market positioning going and what is your reaction to the repositioning of The Beat in that market? I'd like to ask a follow-up for Pat. Rick Cummings: I think in New York, Vic, all of those things are factors. I couldn't tell you to what percentage or what degree the lack of the Howard Stern revenue contributes. That's something you'd have to ask CBS. But certainly that's a contribution, like many, many other things. I think part of the weakness in New York is that there is an attrition, clearly, of traditional sources of revenue. One of the things that we've identified as important is putting in stronger sales teams, stronger sales management, to go out and create new sources of business. That process started 90 days ago. We have a full new sales management line up in New York that we feel very good about. I think that's going to help us close the gap in New York between us and the market pacing over the next four or five months. In Los Angeles, I assume when you say positioning I assume you're asking about the new station, which we feel pretty darn good about but we've only got really one big month, that's November. That is the first real look at what we have with Move It. In that month, 25-54 sat at 300,000 which is right up there with the last several months we turned in as a country station. Now, I think it's logical to assume that with that format, the minute we play the first record, the entire country audience was gone. So we started at zero on August 17, so for us to have equaled KZLA within the first 45 days of the radio station in business, I think we feel pretty good about that. Now, it has to continue to grow. We hope that we'll see that when the next trend comes out, the fall book tomorrow. If that is the case, we may very well see this format equal KZLA's ratings in its very first book. That would, for us, be a terrific sign. Victor Miller - Bear Stearns: Thanks. Pat on the follow up, you in your slide presentations recently have given some data on what the EBITDA revenue contribution is by market. But I think you have been giving some feel for the EBITDA contribution. What do you think the contribution for L.A. and New York will be combined for fiscal year 2007? What would that be relative to a year ago? Just to get a sense of how much you're really counting on the other markets or how much is shifted away from the top two markets for you. Pat Walsh: I think that's in information we put out there, Victor, with our most recent bank facility. I don't think it's information that we're regularly going to put out there on those markets. So that's one we're going to keep a little closer to the vest going forward. Victor Miller - Bear Stearns: Thank you.

Your next question comes from Mark Wienkes - Goldman Sachs. Mark Wienkes - Goldman Sachs: Good morning. Relative to your revenues coming in about as expected, your operating expense came in much, much better given the format change and the other stuff you thought that would hit it. What else helped you keep the expenses in check, and could that help you again in the fourth quarter? Rick Cummings: Yes, it could help us moderately. I assume you're talking about domestic radio. It can help us a little bit. I will say that a lot of the savings that we saw on expenses was certainly offset by marketing and programming costs at the new format in Los Angeles. It would have been an even better picture were we not making that investment. But that's necessary to get this format off the ground, to get it off to a really good start. Rick Dees back on the air in Los Angeles for the first time in three years, and he's hugely important to this format's success. As an old programmer, I have to say he has finally hit his groove. He really sounds wonderful, very entertaining show and we have high hopes for that. I think you'll see a little bit of the same kind of picture expense-wise in the fourth quarter. The other thing I will say is that our managers have been very responsive across all of our markets to the circumstances we find ourselves in New York and Los Angeles. Every manager has watched every nickel very, very effectively all year. Pat Walsh: I would say, Mark, that some of the growth that we see in our guidance of low single-digit growth does relate to the fact that we continue to build our Emmis interactive unit, and we'll continue to make investments during the fourth quarter to build that unit, which has really had a very strong year. We've got, we think, excellent prospects next year, but that's going to require some OpEx growth in that unit during the fourth quarter. Jeff Smulyan: We also believe very strongly, and we know that we have a higher R&D spend than about anybody in the industry. We feel strongly about it, we think we especially need to reinvest and look for new opportunities and we'll continue to do that. We said that last year that it was a year of investment and while we're going to watch all of our costs very, very vigorously we also believe that R&D is critical in an industry which is going through transition right now. Mark Wienkes - Goldman Sachs: Makes sense. Jeff, I was wondering if you could just comment on your latest thoughts regarding the impact of the Arbitron PPM as we get set here to roll that out. Jeff Smulyan: Well, again, we have taken a vigorous position that we've had for many years that you always listen to your customers. Our audiences of advertisers have told us that they believe the diary system is outmoded. We respect Clear Channel's RFP and we've said that if the industry wants to come together for an alternative to Arbitron that's fine, but we believe that PPM is where our customers are telling us they want to go. We made a decision along with a number of the other companies -- CBS and Greater Media and Bonneville and I think a couple of others -- that we would go ahead with PPM because we think it's critical to give our customers all the tools that they need to have faith in this industry. They've told us they have declining faith in the diary system and so that's been our position. That will be true of any initiative. I know we've taken some heat on the Google initiative, and we were the first company to talk to dMarc before Google bought them. Because again, if we want to make this industry easier to buy, it's an industry which has had flat revenues for the last four or five years and whatever we can do to connect with our customers, if new technology does it we want to be at the forefront of that. We always have been and we always will be. Mark Wienkes - Goldman Sachs: That's great. Thank you.

Your next question comes from Jonathan Jacoby - Banc of America. Jonathan Jacoby - Banc of America: Good morning. A few questions here. First, just to touch on what you just ended with is you've actually been using that Google audio dMarc product longer than most. We'd love to hear some of your early thoughts, what you're seeing from you and Rick, perhaps. Right now my understanding is that you're using it mostly and mainly for remnant inventory, but thoughts perhaps about using it for prime inventory. The second question is, following Clear Channel/Univision and now you have some pressure from a shareholder, are you perhaps reconsidering some of your capital distribution options, et cetera? The last question is, any further thoughts on acquisitions or dispositions? Thank you. Rick Cummings: I'll take the first one on Google. As Jeff said, we were the first company that went out there and talked to Ryan Steelberg and dMarc about their technology because our view has been that there is always going to be a certain portion of the radio advertising business which is a commodity. As radio as an industry moves into the digital world, it's important for us to explore all of these digital possibilities. So we began to have conversations with them, and yes, your assessment is exactly on point. Right now, it's remnant inventory. It's stuff that is sold at the last minute at a pretty low price. Those prices have gone up since we started, I'm happy to say, but they're still low dollar amounts. The Google folks have expressed an interest in doing more business with us and in some prime inventory. We've said we're happy to discuss it so long as the money is there and the price is right. That remains to be seen. That's really up to them. Jonathan Jacoby - Banc of America: Okay, thanks. And the other questions? Jeff Smulyan: Yes, Jonathan, I want to make sure that when you talked about the shareholder input, I wanted to make sure I understood the question. Jonathan Jacoby - Banc of America: Well, just that you have the proxy -- well, I mean, obviously you've had Clear Channel/Univision. That's pretty self-understood, but then you have the proxy with the vote on the one-for-one, right? Jeff Smulyan: Let me respond to that. Obviously, we have a shareholder who has suggested that I drop the dual class of stock. Obviously it’s something I wouldn't do. I don't think there are many companies in America that would do that. To us, it's sort of like changing the rules to the game midway through the game. Obviously, Mr. Martin bought all of his stock knowing there were two classes of stock. Mr. Martin, further, has merely said that he doesn't have any suggestions about operations and really wants the company liquidated. I'm not willing to do that. I want to make it very clear. I think this company has always been a leader in radio and in international media and in publishing and I think it will continue to do that. I know there are a lot of hedge funds who buy companies and then immediately demand that they be liquidated. I'm on the board of another public company that's done the exact same thing. I wish the hedge funds well, but I'm not willing to allow this company to be liquidated. I realize some people have even said, well some of the hedge funds do this because they want to get their name in front of the public and that's certainly their right. But changing the game in the middle of the game and changing the rules is something we think is a little bit disingenuous. Therefore, we will continue to operate this company. I guarantee our shareholders and our people that we work harder here than anybody in media. I think when answers are found in media, they'll be found here first. We're not willing to liquidate this company for the benefit of anybody's hedge fund. Jonathan Jacoby - Banc of America: The question really was, and maybe I didn't phrase it right, you attempted to go in private transaction, you're seeing some other companies do it. Things have changed a little bit, were you perhaps reconsidering now? That was more so the question. Or are you looking for acquisitions and maybe dispositions? How to balance the current portfolio? I apologize if I wasn't clear. Jeff Smulyan: Jonathan, I think you always look at how to deploy your capital. As a matter of fact, a number of our shareholders asked us to reconsider, and it's something that we haven't done at this point. We'll always reserve the right to look at it again. It's not lost on us that in a bidding process Clear Channel radio portfolio sold for several multiples less than the offer that we made last year. So certainly that is duly noted. We'll always continue to evaluate what we think is the best for the long-term interest of this company, all of its stakeholders: its employees, its shareholders, its audiences, and its communities. Jonathan Jacoby - Banc of America: Thank you so much. Pat Walsh: One quick thing just to point out, I think we've demonstrated as we put this new facility in place and paid the special dividend, that we're very much focused on organic growth right now. The new morning shows in Chicago, the new format in Los Angeles, we're reinvesting in our properties in New York and L.A. We're investing in Emmis interactive. So we're focused on getting things right with the assets that we have right now, and we think we've got the capital to be able to make that happen.

Your next question comes from Jim Boyle - CL King. Jim Boyle - CL King: Good morning. Jeff, if a major radio group was to hypothetically participate in the Google audio test, what would roughly be the commission or split that goes to Google? Jeff Smulyan: I think it is standard. I've seen it written, Jim, that they want something like 50%. Again, this is very simple. Whether Google's the buyer or their predecessor dMarc or any other advertiser, these are negotiated rates. We're not going to conduct business that we don't believe is profitable business. So if Google can show us a way where they take a 98% commission and the business is still profitable for us, we would do it. On the other hand, they could take zero commission and if the business is not profitable, we wouldn't do it. Jim Boyle - CL King: So when you say standard, do you mean comparable to a national rep, or standard along the lines of the 50% people are speculating? Jeff Smulyan: No, I think standard along the lines of a national rep, Jim. Jim Boyle - CL King: Rick, the last time a major financial player, Hicks News, came into radio, their stations eventually became infamous for very high commercial loads. If speculation is accurate and Clear Channel's new owners try to drive revenue by boosting the unit load, does that concern you more on radio losing its pricing power or more on the acceleration of audience erosion? Rick Cummings: Jim, I don't know, and I'm not going to speculate because it's way early in the game to know what's going to happen there. We tend to focus on things we can control. What we can control at Emmis is our ratings and our revenue, so we're going to focus on those things. As to what happens with that company and where they go, I have no idea. Jim Boyle - CL King: But they're so large they do affect you even if you can't control them and as a financial player, they drive unit load. Are you more concerned about the audience erosion or the pricing power erosion that typically comes from those activities? Rick Cummings: I don't know. We'll have to wait and see what happens. Jim Boyle - CL King: Thank you.

Your final question comes from Jim Goss - Barrington Research. Jim Goss - Barrington Research: Thank you. A couple of questions. One, following a little on what Jonathan Jacoby was bringing up with acquisitions potential, it's rare that larger markets stations wind up coming into play but it appears that Clear Channel may wind up divesting some. I was wondering, given that you are now a smaller and cleaner company, do you think you'd need to get bigger to be more competitive in the future and that those might be some opportunities you would go after? I have another separate line of questions. Jeff Smulyan: Well, Jim, obviously we've seen speculation that they have made an agreement with the government that they will divest. Then we've heard that it'll be the big market stations and then we've heard they haven't made an agreement and if they do make an agreement, it will be fringe suburban stations. We just don't know. Obviously, if assets are available as it has occurred, we will look at them. If it makes sense we'll deploy capital that way. It's just too speculative to know. Their transaction hasn't even come close to fruition yet. So it's always the same thing. If we can see an acquisition that we believe we see an opportunity to improve, we'll do it. Jim Goss - Barrington Research: If you were to take on some additional opportunity, what would your leverage TAC be going forward since you had been highly leveraged at one point? Jeff Smulyan: Yes, we have tried to keep bringing our leverage down and you know that. When we gave our special dividend, we said we were willing to demonstrate a discipline with leverage to our shareholders, which we are currently doing. So I think you can assume that we will be pretty judicious about the use of leverage in the future. Jim Goss - Barrington Research: The RAB numbers that came out for November showed national being a particularly strong category. That typically impacts larger markets such as those you're involved in. I wonder if there is any feel you can provide as to how important an event that was and how sustainable an event it was, and whether it's flowed into December or January? Because that particular month did not have the very difficult comps that October did that explained away October. Jeff Smulyan: Right. It's hard to know. I think there was a point that there was a lot of last-minute political money that came in and made November a little bit better along with easy comps. We see things getting slightly better. But I don't want to lead anybody to believe that there's been a dramatic turnaround in this industry yet. Jim Goss - Barrington Research: Thanks very much, Jeff. Jeff Smulyan: Thanks, Jim. Kate Snedeker: Before Jeff's closing comments, just a reminder that a replay will be available for the next week at 402-220-9725 or by visiting our web site Emmis.com. Jeff Smulyan: I also want to thank all of our people who are listening on this call. I've said before, I don't think there's a more creative, innovative, hardworking group of people in American media than the people at Emmis. They make me proud every day. This has been a challenging year. I'm sure 2007, our fiscal 2008, will be another challenging year. But I'm energized and I'm encouraged. I'm encouraged by the innovation that we've seen, I'm encouraged by the steps that we've taken, and I'm encouraged by the improvement that we see coming. We believe that this is an industry, both radio and our magazine business and our international group, that continues to affect the lives of millions of people every day and has a meaningful impact and gets great results for our customers because our content makes a difference in people's lives. If we keep doing that and stay true to that notion and make sure that we understand that as technology changes that we want to be at the forefront of those technological changes, I think there'll be a very bright future for this company. I thank all of you.