Emmis Corporation · OTC:EMMS
Emmis — Emmis Communications — Banc of America 35th Annual Investors Conference (September 2005)
36 slides from Emmis's conference presentation, Sep 19, 2005
Slide 1: Banc of America 35th Annual Investors Conference
Banc of America 35th Annual Investors Conference Monday, Sept. 19, 2005
Slide 2: Forward-looking statements note
Note: Certain statements in this presentation constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involved known and unknown risks, uncertainties and other factors which may cause the actual results, perf
Slide 3: Emmis Investment Highlights
Emmis Investment Highlights Unparalleled large market broadcasting assets Consistent outperformance of peer group and industry Strong Free Cash Flow generation & significant balance sheet improvement Disciplined acquisition strategy Performance driven organization
Slide 4: Emmis Radio
Emmis Radio communications POWER ay Wes 106 Na) J - ss oKclA KZLA ee @ greatmedia greatpeoplegreatservice.”
Slide 5: Emmis Television
Emmis Television FORTUNE’ 100 BEST COMPANIESS TO WORK FOR
Slide 6: Overview of Tender Offer
Overview of Tender Offer Total Transaction Size $395 m Mechanism Dutch Auction Closing Date June 13, 2005 Shares Purchased (mm) 20.25 Price Per Share $19.50 % Premium per share (a) 26.2% % of Outstanding Stock Class A & B 36% % of Outstanding Class A 39% Source of funds Revolver borrowings and new F
Slide 7: Strategic Alternatives: TV Division
Strategic Alternatives: TV Division Allows management to delever the Company and have a more flexible capital structure Creates pure play radio company, allowing management to focus on its core business - radio Realize full value of TV assets by capitalizing on the disconnect between public an
Slide 8: Emmis Net Revenue by Division
Emmis Net Revenue by Division (In Thousands) Pub, Pub, Pub, 13.6% 13.5% 12.6% TV, TV, TV, 43.7% 41.7% 42.8% Radio, Radio, Radio, 42.7% 44.8% 44.6% FY 2003 FY 2004 FY 2005 Radio $228,678 $253,108 $275,920 Television 234,752 235,938 264,865 Publishing 72,793 76,108 77,675 $536,223 $565,154 $618,460
Slide 9: Emmis SOI by Division
Emmis SOI by Division (In Thousands) Pub, Pub, Pub, 4.9% 4.9% 4.2% TV, TV, TV, Radio, 42.8% 40.8% Radio, 45.5% Radio, 52.2% 54.3% 51.5% FY 2003 FY 2004 FY 2005 Radio $105,866 $113,670 $120,417 Television 86,711 85,453 103,716 Publishing 9,968 10,299 9,805 $202,545 $209,422 $233,938 Stock Comp $18,26
Slide 10: Emmis Radio
f eS. media. people. service.” ag communications | Emmis Radio
Slide 11: Compelling Upside in Radio
Compelling Upside in Radio Radio has 32.5% of consumer media usage but only 8% of advertising Time spent with radio projected to increase as commutes grow longer Fragmentation means consumers are hard to reach Trend toward more targeted advertising continues
Slide 12: NYC – Rating Dominance
NYC – Rating Dominance Summer Fall Winter Spring 2004 2004 2005 2005 8.6 10.2 #1 10.3 10.2 #1 34th Straight @ #1 #1 #1 18-34 18-34 6.3 5.2 #3 6.1 #3 5.8 Highest since Spring #2 25-54 #2 25-54 ‘96 3.1 4.1 2.4 2.8 #13 (Tie) #6 (25-54) #16 #15 25-54
Slide 13: LA – Continued Ratings Dominance
LA – Continued Ratings Dominance Power 106, has been #1 in18-34 for 13 straight books in the #1 U.S. revenue market Fast growing target demo Hot morning personality One of the top-billing stations in the U.S.
Slide 14: Chicago – Strategic Fit
Chicago – Strategic Fit Three Emmis Phoenix stations for WLUP-FM in Chicago and nearly $75m cash Cash received used to repay senior debt – deleveraging transaction Heritage classic rock station complements existing alternative rock station Significant revenue growth in next 2-3 years Cost
Slide 15: Emmis Radio Outperformance
Emmis Radio Outperformance Emmis met or beat market growth in each of last 9 quarters Emmis vs. Emmis Markets 6% 5.3% 5% 4.5% 4% 3% 2.7% 2.6% 2% 1.7% 1% 0.5% 0% FY04 FY04 FY05 FY05 Q1 Q1 Markets Emmis Markets Emmis FY05 FY06 Markets Emmis *Excludes results from WLUP-FM, which was acquired 1/15/05.
Slide 16: Inventory Management
Inventory Management Radio Rate Increases Maximize revenues 14% by managing 12% Avg: 6.4% inventory to 10% maximize rate 8% 6% Consistent history of 4% rate increases 2% Expect to benefit 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 from competitors’ “less is more” FY 2004 FY 2005 FY 2006
Slide 17: Emmis Television
Cf : P media.gicatpeople.greatservice.” M communica’ tions =Ry Emmis Television
Slide 18: TV: Diversified location, affiliation
TV: Diversified location, affiliation Emmis owns and operates 16 TV stations in 14 markets Emmis’ TV markets are predominantly middle- sized, with 2 large markets, Orlando & Portland Diversity of network affiliation CBS(5), Fox(5), NBC(3), WB(2), ABC(1)
Slide 19: Emmis TV Outperformance
Emmis TV Outperformance Increased margins from 29% to 40% since acquisition Emmis TV grew revenue share at 11 of 13 measured stations in calendar ’03 and 8 of 13 in calendar ‘04 Limited network compensation - $2 m in FY ’04 and FY ‘05 FY ‘05 vs. Peers Station Operating Net Revenues 14% Incom e
Slide 20: Announced TV Sales
Announced TV Sales LIN – $260 million Journal – $235 million WALA/WBPG, Mobile WFTX, Ft. Myers WTHI, Terre Haute KMTV, Omaha WLUK, Green Bay KGUN, Tucson KRQE, Albuquerque Gray – $186 million WSAZ, Huntington, WV
Slide 21: Strategic Investments
communications f Se. media.gicatpeople.greatservice” Strategic Investments
Slide 22: Strategic investments: interactive, publishing and other
ao Fre} FANS BAAS = commun - -—< 3 Country Sampler. emmis/ interactive BEST LATIN RESTAURA INLA, © WHEN WAE pop rock hits Can’t-Miss Summer Events jj Minden idék legnagyobh slagerei FORTUNE: 100 BEST COMPANIESS TO WORK FORS
Slide 23: Emmis Financials
f eS. eT media.grcatpeople.greatservice.” communications
Slide 24: Summary Historical Financials: Net Revenues
Summary Historical Financials Net Revenues $700 $618.5 $600 GR $565.2 $536.2 CA .7 % $510.3 17 $500 $453.7 $400 $325.3 $300 $232.8 $200 $161.8 $153.0 $100 $0 FY FY FY FY FY FY FY Q1 Q1 1999 2000 2001 2002 2003 2004 2005 FY05 FY06
Slide 25: Summary Historical Financials: Station Operating Income and Adjusted EBITDA
Summary Historical Financials Station Operating Income and Adjusted EBITDA (a,b,c) a,b,c) $250 $233.9 A GR $202.5 $209.4 4 %C 17. $200 $179.7 $203.1 $170.9 Station $181.2 $185.3 Operating $150 $159.4 Incom e $153.2 Adjus ted $125.4 EBITDA $100 $110.0 $89.5 $60.5 $59.3 $77.6 $50 $52.1 $52.2 $0 FY FY
Slide 26: Substantial Operating Leverage
Substantial Operating Leverage Continue to use FCF to deleverage FY 05 Adjusted EBITDA $203 Interest Expense $67 Refinancing CapEx $25 dramatically reduced Preferred Stock Div $9 borrowing costs and Minority Interest $3 increased FCF Cash Taxes $0 PF FCF $99 Free Cash Flow per share of $1.77 M
Slide 27: Pro Forma Debt Capitalization for Divestiture of TV
Pro Forma Debt Capitalization for Divestiture of TV (assumes $1.0 billion of sale proceeds) ($ in Millions) Pre Post As of February 28, 2006 TV Sale TV Sale Existing EBITDA (a) Pro Forma PF EBITDA (b) Capitalization Multiple Capitalization Multiple Cash & Equivalents $16.1 $16.1 Revolver ($350) $234
Slide 28: Significant Debt Reduction
Significant Debt Reduction $160,000 Total Interest Cost ($000s) $129,100 $120,000 $103,835 $86,300 Floating $80,000 $66,657 Fixed $40,000 $0 FY2002 FY2003 FY2004 FY2005* *Fixed interest includes amortization of debt fees
Slide 29: Refinancing Dramatically Reduces Cost of Capital
Refinancing Dramatically Reduces Cost of Capital 8.93% WACD 10.0% 7.68% 6.92% 8.0% 5.20% 6.0% 4.0% 2.0% 0.0% FY 2002 FY 2003 FY 2004 FY 2005
Slide 30: Significant Debt Reduction: Net Leverage
Significant Debt Reduction 10 9.3x Net Leverage 8 6.5x 6.7x 5.9x 6 4 FY 2002 FY 2003 FY 2004 FY 2005
Slide 31: Significant Debt Reduction Fuels FCF Growth
Significant Debt Reduction Fuels FCF Growth $2.40 FCF / Share* $1.77 $1.90 $1.32 $1.40 $0.89 $0.90 $0.40 ($0.09) ($0.10) FY 2002 FY 2003 FY 2004 FY 2005 *NOTE: FCF per Share defined as Adjusted EBITDA – cash taxes – all interest expense – capital expenditures – preferred dividends. (1) The reconcili
Slide 32: Reg G Reconciliations
Reg G Reconciliations Com putation of Com pany Total Leverage Ratios Dollars in Thousands Computation of Emmis Total Leverage Ratio Under the Senior Discount Notes : 2/28/05 2/29/04 2/28/03 2/28/02 Num e ra tor: Senior credit facility debt outstanding $ 804,313 $ 739,832 $ 706,898 $ 952,000 Plus: Le
Slide 33: Reg G Reconciliations
Reg G Reconciliations Em m is Com m unications Corporation Reconciliation of Operating Incom e to Station Operating Incom e For the years ended February 2003 - 2005 and quarters ended M ay 31, 2004 and 2005 Actual Actual Actual Actual Actual FY 2003 FY 2004 FY 2005 Q1 FY 05 Q1 FY 06 Operating Income
Slide 34: Reg G Reconciliations
Reg G Reconciliations Emmis Communications Corporation Reconciliation of EBITDA, Adjusted EBITDA and FCF to Income (loss) from Continuing Opera Dollars in Thousands FY 2005 Income (loss) from continuing operations $ (43,703) Plus: Depreciation and amortization 46,201 Plus: Income taxes 15,941 Plus:
Slide 35: Reg G Reconciliations
Reg G Reconciliations Emmis Communications Corporation Reconciliation of EBITDA, Adjusted EBITDA and FCF to Income (loss) from Continuing Ope Dollars in Thousands FY 2005 Income (loss) from continuing operations $ (43,703) Plus: Depreciation and amortization 46,201 Plus: Noncash compensation 16,570
Slide 36: communications
communications
Emmis Communications — Banc of America 35th Annual Investors Conference (September 2005) on 6ix