10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2017

EMMIS COMMUNICATIONS CORPORATION

(Exact name of registrant as specified in its charter)

INDIANA

(State of incorporation or organization)

0-23264

(Commission file number)

35-1542018

(I.R.S. Employer Identification No.)

ONE EMMIS PLAZA

40 MONUMENT CIRCLE, SUITE 700

INDIANAPOLIS, INDIANA 46204

(Address of principal executive offices)

(317) 266-0100

(Registrant’s Telephone Number, Including Area Code)

NOT APPLICABLE

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” and “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨		Accelerated filer	¨
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	ý
			Emerging Growth Company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  ý

The number of shares outstanding of each of Emmis Communications Corporation’s classes of common stock, as of October 9, 2017, was:

11,568,454	Shares of Class A Common Stock, $.01 Par Value
1,142,366	Shares of Class B Common Stock, $.01 Par Value
—	Shares of Class C Common Stock, $.01 Par Value

INDEX

	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements	3
Condensed Consolidated Statements of Operations for the three-month and six-month periods ended August 31, 2016 and 2017	3
Condensed Consolidated Statements of Comprehensive Income for the three-month and six-month periods ended August 31, 2016 and 2017	4
Condensed Consolidated Balance Sheets as of February 28, 2017 and August 31, 2017	5
Condensed Consolidated Statement of Changes in (Deficit) Equity for the six-month period ended August 31, 2017	7
Condensed Consolidated Statements of Cash Flows for the six-month periods ended August 31, 2016 and 2017	8
Notes to Condensed Consolidated Financial Statements	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3. Quantitative and Qualitative Disclosures about Market Risk	37
Item 4. Controls and Procedures	37
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6. Exhibits	39
Signatures	40

PART I — FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)

	Three Months Ended   August 31,						Six Months Ended   August 31,
	2016			2017			2016			2017
NET REVENUES	$	58,774		$	42,848		$	114,776		$	83,012
OPERATING EXPENSES:
Station operating expenses excluding depreciation and amortization expense of $1,085, $701, $2,195 and $1,495, respectively	46,991			33,904			89,980			65,134
Corporate expenses excluding depreciation and amortization expense of $197, $180, $419, and $364, respectively	2,453			2,538			5,497			5,281
Impairment loss on intangible assets	2,988			—			2,988			—
Depreciation and amortization	1,282			881			2,614			1,859
Gain on sale of assets, net of disposition costs	—			(76,706		)	—			(76,706		)
Loss on disposal of property and equipment	125			12			125			12
Total operating expenses	53,839			(39,371		)	101,204			(4,420		)
OPERATING INCOME	4,935			82,219			13,572			87,432
OTHER EXPENSE:
Interest expense	(4,758		)	(4,548		)	(9,448		)	(9,214		)
Loss on debt extinguishment	—			(2,523		)	—			(2,523		)
Other income, net	89			11			132			14
Total other expense	(4,669		)	(7,060		)	(9,316		)	(11,723		)
INCOME BEFORE INCOME TAXES	266			75,159			4,256			75,709
PROVISION FOR INCOME TAXES	664			4,394			1,339			4,372
CONSOLIDATED NET (LOSS) INCOME	(398		)	70,765			2,917			71,337
NET (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	(733		)	808			(104		)	1,647
NET INCOME ATTRIBUTABLE TO THE COMPANY	335			69,957			3,021			69,690
NET INCOME PER SHARE - BASIC	$	0.03		$	5.69		$	0.25		$	5.67
NET INCOME PER SHARE - DILUTED	$	0.03		$	5.59		$	0.25		$	5.59
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic	12,047			12,292			11,922			12,287
Diluted	12,299			12,513			12,043			12,463

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

-3-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	Three Months Ended   August 31,					Six Months Ended   August 31,
	2016			2017		2016			2017
CONSOLIDATED NET (LOSS) INCOME	$	(398	)	$	70,765	$	2,917		$	71,337
LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	(733		)	808		(104		)	1,647
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	335		$	69,957	$	3,021		$	69,690

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

-4-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	February 28, 2017		August 31, 2017
			(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11,349	$	4,718
Restricted cash	2,323		2,161
Accounts receivable, net	26,484		25,454
Prepaid expenses	4,798		4,877
Other current assets	1,503		1,502
Total current assets	46,457		38,712
PROPERTY AND EQUIPMENT, NET	30,845		28,613
INTANGIBLE ASSETS (NOTE 3):
Indefinite-lived intangibles	197,666		195,648
Goodwill	4,603		4,603
Other intangibles, net	1,523		1,278
Total intangible assets	203,792		201,529
OTHER ASSETS, NET	8,244		8,422
Total assets	$	289,338	$	277,276

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

-5-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(In thousands, except share data)

	February 28, 2017			August 31, 2017
				(Unaudited)
LIABILITIES AND (DEFICIT) EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	13,398		$	4,620
Current maturities of long-term debt (Note 4)	23,600			16,367
Accrued salaries and commissions	6,238			2,061
Deferred revenue	4,560			5,654
Other current liabilities	6,807			6,166
Total current liabilities	54,603			34,868
LONG-TERM DEBT, NET OF CURRENT MATURITIES (NOTE 4)	190,372			125,244
OTHER NONCURRENT LIABILITIES	4,842			5,921
DEFERRED INCOME TAXES	43,537			44,937
Total liabilities	293,354			210,970
COMMITMENTS AND CONTINGENCIES
(DEFICIT) EQUITY:
Class A common stock, $.01 par value; authorized 42,500,000 shares; issued and outstanding 11,278,065 shares at February 28, 2017 and 11,568,454 shares at August 31, 2017	113			116
Class B common stock, $.01 par value; authorized 7,500,000 shares; issued and outstanding 1,142,366 shares at February 28, 2017 and August 31, 2017	11			11
Additional paid-in capital	592,320			593,556
Accumulated deficit	(629,381		)	(559,691		)
Total shareholders’ (deficit) equity	(36,937		)	33,992
NONCONTROLLING INTERESTS	32,921			32,314
Total (deficit) equity	(4,016		)	66,306
Total liabilities and (deficit) equity	$	289,338		$	277,276

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

-6-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN (DEFICIT) EQUITY

(Unaudited)

(In thousands, except share data)

	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Deficit			Noncontrolling Interests			Total (Deficit) Equity
	Shares	Amount		Shares	Amount
Balance, February 28, 2017	11,278,065	$	113	1,142,366	$	11	$	592,320	$	(629,381	)	$	32,921		$	(4,016	)
Net income									69,690			1,647			71,337
Issuance of common stock to employees and officers	263,139	3					1,175								1,178
Exercise of stock options	27,250						61								61
Distributions to noncontrolling interests												(2,254		)	(2,254		)
Balance, August 31, 2017	11,568,454	$	116	1,142,366	$	11	$	593,556	$	(559,691	)	$	32,314		$	66,306

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

-7-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
	Six Months Ended August 31,
	2016			2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$	2,917		$	71,337
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities -
Impairment loss on intangible assets	2,988			—
Gain on sale of assets, net of disposition costs	—			(76,706		)
Depreciation and amortization	2,614			1,859
Amortization of debt discount	854			1,466
Noncash accretion of debt	371			371
Loss on debt extinguishment	—			2,523
Provision for bad debts	53			636
Provision for deferred income taxes	1,267			1,400
Noncash compensation	1,516			1,396
Loss on disposal of property and equipment	125			12
Changes in assets and liabilities -
Restricted cash	(354		)	162
Accounts receivable	(3,458		)	394
Prepaid expenses and other current assets	(114		)	(96		)
Other assets	(432		)	(196		)
Accounts payable and accrued liabilities	(2,208		)	(12,955		)
Deferred revenue	172			1,161
Income taxes	(82		)	(107		)
Other liabilities	(140		)	713
Net cash provided by (used in) operating activities	6,089			(6,630		)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(711		)	(838		)
Net proceeds from the sale of assets	283			79,968
Distributions from investments, net	61			—
Net cash (used in) provided by investing activities	(367		)	79,130

-8-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
	Six Months Ended August 31,
	2016			2017
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt	(13,165		)	(88,774		)
Proceeds from long-term debt	11,000			13,690
Debt-related costs	—			(1,636		)
Distributions to noncontrolling interests	(2,074		)	(2,254		)
Proceeds from the exercise of stock options	20			61
Purchase of Class A common stock	(5		)	—
Settlement of tax withholding obligations on stock issued to employees	(260		)	(218		)
Net cash used in financing activities	(4,484		)	(79,131		)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	1,238			(6,631		)
CASH AND CASH EQUIVALENTS:
Beginning of period	4,456			11,349
End of period	$	5,694		$	4,718
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	7,943		$	8,321
Cash paid for (refund from) income taxes, net	112			(19		)
Noncash financing transactions-
Stock issued to employees and directors	1,518			1,393

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

-9-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(DOLLARS IN THOUSANDS UNLESS INDICATED OTHERWISE, EXCEPT SHARE DATA)

August 31, 2017

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Preparation of Interim Financial Statements

Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the condensed consolidated interim financial statements included herein have been prepared, without audit, by Emmis Communications Corporation (“ECC”) and its subsidiaries (collectively, “our,” “us,” “we,” “Emmis” or the “Company”). As permitted under the applicable rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, Emmis believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Emmis filed on Form 10-K for the year ended February 28, 2017. The Company’s results are subject to seasonal fluctuations. Therefore, results shown on an interim basis are not necessarily indicative of results for a full year.

In the opinion of Emmis, the accompanying condensed consolidated interim financial statements contain all material adjustments (consisting only of normal recurring adjustments, except as otherwise noted) necessary to present fairly the consolidated financial position of Emmis at August 31, 2017, the results of its operations for the three-month and six-month periods ended August 31, 2016 and 2017, and cash flows for the six-month periods ended August 31, 2016 and 2017.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended February 28, 2017 that have had a material impact on our condensed consolidated financial statements and related notes.

Common Stock Reverse Split

On July 8, 2016, the Company effected a one-for-four reverse stock split for its Class A, Class B and Class C common

stock. All share and per share information has been retroactively adjusted to reflect the reverse stock split.

Basic and Diluted Net Income Per Common Share

Basic net income per common share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Potentially dilutive securities at August 31, 2016 and 2017 consisted of stock options and restricted stock awards. The following table sets forth the calculation of basic and diluted net income per share:

	For the three months ended
	August 31, 2016					August 31, 2017
	Net Income		Shares	Net Income Per Share		Net Income		Shares	Net Income Per Share
	(amounts in 000’s, except per share data)
Basic net income per common share:
Net income available to common shareholders	$	335	12,047	$	0.03	$	69,957	12,292	$	5.69
Impact of equity awards	—		252			—		221
Diluted net income per common share:
Net income available to common shareholders	$	335	12,299	$	0.03	$	69,957	12,513	$	5.59

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	For the six months ended
	August 31, 2016					August 31, 2017
	Net Income		Shares	Net Income Per Share		Net Income		Shares	Net Income Per Share
	(amounts in 000’s, except per share data)
Basic net income per common share:
Net income available to common shareholders	$	3,021	11,922	$	0.25	$	69,690	12,287	$	5.67
Impact of equity awards	—		121	—		—		176	—
Diluted net income per common share:
Net income available to common shareholders	$	3,021	12,043	$	0.25	$	69,690	12,463	$	5.59

Shares excluded from the calculation as the effect of their conversion into shares of our common stock would be antidilutive were as follows:

	For the three months ended August 31,		For the six months ended August 31,
	2016	2017	2016	2017
	(shares in 000’s )
Equity awards	1,340	1,960	1,491	2,276
Antidilutive common share equivalents	1,340	1,960	1,491	2,276

Local Programming and Marketing Agreement Fees

The Company from time to time enters into local programming and marketing agreements (“LMAs”), often pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses in connection with acquisitions or dispositions of radio stations. Under the terms of these agreements, the acquiring company makes specified periodic payments to the holder of the FCC license in exchange for the right to program and sell advertising for a specified portion of the station’s inventory of broadcast time. The acquiring 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.

On May 8, 2017, Emmis and an affiliate of the Meruelo Group (the "Meruelo Group") entered into an LMA and asset purchase agreement related to KPWR-FM in Los Angeles. This LMA started on July 1, 2017 and terminated with the consummation of the sale of KPWR-FM on August 1, 2017. Emmis recognized $0.4 million of LMA fee revenue as a component of net revenues in our accompanying condensed consolidated statements of operations related to this LMA. See Note 10 for more discussion of our sale of KPWR-FM to the Meruelo Group.

On April 26, 2012, Emmis entered into an LMA with a subsidiary of Disney Enterprises, Inc. for 98.7FM in New York (formerly WRKS-FM and now WEPN-FM, hereinafter referred to as “98.7FM”). The LMA for this station started on April 30, 2012 and will continue until August 31, 2024. Emmis retains ownership and control of the station, including the related FCC license during the term of the LMA and is scheduled to receive an annual fee until the LMA’s termination. LMA fee revenue is recorded on a straight-line basis over the term of the LMA as a component of net revenues in our accompanying condensed consolidated statements of operations.

The following table summarizes certain operating results of 98.7FM for all periods presented. Net revenues for 98.7FM are solely related to LMA fees. 98.7FM is a part of our radio segment.

	For the three months ended August 31,				For the six months ended August 31,
	2016		2017		2016		2017
	(amounts in 000's)
Net revenues	$	2,583	$	2,583	$	5,166	$	5,166
Station operating expenses, excluding depreciation and amortization expense	363		296		614		589
Interest expense	715		656		1,443		1,328

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Assets and liabilities of 98.7FM as of February 28, 2017 and August 31, 2017 were as follows:

	As of February 28,		As of August 31,
	2017		2017
	(amounts in 000's)
Current assets:
Restricted cash	$	1,550	$	1,511
Prepaid expenses	445		481
Other current assets	7		13
Total current assets	2,002		2,005
Noncurrent assets:
Property and equipment, net	229		274
Indefinite lived intangibles	46,390		46,390
Deposits and other	6,205		6,406
Total noncurrent assets	52,824		53,070
Total assets	$	54,826	$	55,075
Current liabilities:
Accounts payable and accrued expenses	$	54	$	22
Current maturities of long-term debt	6,039		6,317
Deferred revenue	807		835
Other current liabilities	205		195
Total current liabilities	7,105		7,369
Noncurrent liabilities:
Long-term debt, net of current portion and unamortized debt discount	51,954		48,859
Total noncurrent liabilities	51,954		48,859
Total liabilities	$	59,059	$	56,228

Restricted Cash

As of August 31, 2017, restricted cash relates to cash on deposit in trust accounts related to our 98.7FM LMA in New York City that services long-term debt and cash held in escrow as part of our sale of four magazines in February 2017. The table below summarizes restricted cash held by the Company as of February 28, 2017 and August 31, 2017:

	As of February 28,		As of August 31,
	2017		2017
98.7FM LMA restricted cash	$	1,550	$	1,511
NextRadio LLC restricted cash	123		—
Cash held in escrow from sale of magazines restricted cash	650		650
Total restricted cash	$	2,323	$	2,161

Noncontrolling Interests

The Company follows Accounting Standards Codification paragraph 810-10-65-1 to report the noncontrolling interests related to our Austin radio partnership and Digonex Technologies Inc., a dynamic pricing business (hereinafter "Digonex"). We have a 50.1% controlling interest in our Austin radio partnership. We do not own any of the common equity of Digonex, but we consolidate the entity because we control its board of directors via rights granted in convertible preferred stock and convertible debt that we own. As of August 31, 2017, Emmis owns rights that are convertible into approximately 82% of Digonex's common equity.

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Noncontrolling interests represent the noncontrolling interest holders' proportionate share of the equity of the Austin radio partnership and Digonex. Noncontrolling interests are adjusted for the noncontrolling interest holders' proportionate share of the earnings or losses of the applicable entity. The noncontrolling interest continues to be attributed its share of losses even if that attribution results in a deficit noncontrolling interest balance. Below is a summary of the noncontrolling interest activity for the six months ended August 31, 2016 and 2017:

	Austin radio partnership			Digonex			Total noncontrolling interests
Balance, February 29, 2016	$	47,556		$	(9,159	)	$	38,397
Net income (loss)	3,048			(3,152		)	(104		)
Distributions to noncontrolling interests	(2,074		)	—			(2,074		)
Balance, August 31, 2016	$	48,530		$	(12,311	)	$	36,219
Balance, February 28, 2017	$	46,830		$	(13,909	)	$	32,921
Net income (loss)	3,151			(1,504		)	1,647
Distributions to noncontrolling interests	(2,254		)	—			(2,254		)
Balance, August 31, 2017	$	47,727		$	(15,413	)	$	32,314

Recent Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU was issued to simplify goodwill impairment by removing the second step of the goodwill impairment test. The Company early adopted this guidance as of March 1, 2017. The adoption of this guidance had no immediate impact on the Company's financial statements, but it could affect future goodwill impairment analysis.

In January 2017, the FASB issued Accounting Standards Update 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU was issued to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be effective for the Company as of March 1, 2018. The Company does not expect adoption of this guidance will have a material impact on the Company's consolidated financial statements.

In November 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective for the Company as of March 1, 2018, and requires a retrospective transition method. The Company does not expect adoption of this guidance will have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842). This update requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases of greater than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance will be effective for the Company as of March 1, 2019. A modified retrospective transition method is required. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles used to recognize revenue for all entities. The FASB deferred implementation of this guidance by one year with the issuance of Accounting Standards Update 2015-14. As such, this guidance will be effective for the Company as of March 1, 2018. The Company expects to use the modified retrospective method of adoption. The Company has completed its initial evaluation of potential changes from adopting the new standard on its financial reporting and disclosures, which included a detailed review of contractual terms for all of its significant revenue streams. The Company will complete its implementation plan during in the remainder of fiscal 2018. Based on its initial evaluation, the Company does not expect adoption of this guidance will have a material impact on the Company's consolidated financial statements, but disclosures related to revenue recognition will likely be expanded.

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Note 2. Share Based Payments

The amounts recorded as share based compensation expense consist of stock option grants, restricted stock grants, and common stock issued to employees and directors in lieu of cash payments.

Stock Option Awards

The Company has granted options to purchase its common stock to employees and directors of the Company under various stock option plans at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding 10 years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with the Company. Generally, these options either vest annually over 3 years (one-third each year for 3 years), or cliff vest at the end of 3 years. The Company issues new shares upon the exercise of stock options.

The fair value of each option awarded is estimated on the date of grant using a Black-Scholes option-pricing model and expensed on a straight-line basis over the vesting period. Expected volatilities are based on historical volatility of the Company’s stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. The Company includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The risk-free interest rate for periods within the life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following assumptions were used to calculate the fair value of the Company’s options on the date of grant during the six months ended August 31, 2016 and 2017:

	Six Months Ended August 31,
	2016	2017
Risk-Free Interest Rate:	0.9% - 1.2%	1.7% - 1.9%
Expected Dividend Yield:	0%	0%
Expected Life (Years):	4.3	4.4
Expected Volatility:	58.6% - 60.0%	52.9% - 53.6%

The following table presents a summary of the Company’s stock options outstanding at August 31, 2017, and stock option activity during the six months ended August 31, 2017 (“Price” reflects the weighted average exercise price per share; "Aggregate Intrinsic Value" dollars in thousands):

	Options	Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding, beginning of period	2,559,643	$	5.17
Granted	331,250	2.77
Exercised	27,250	2.25
Forfeited	8,331	2.29
Expired	74,815	14.15
Outstanding, end of period	2,780,497	4.68		6.9	$	277
Exercisable, end of period	1,512,093	5.47		5.1	$	215

Cash received from option exercises for the six months ended August 31, 2016 and 2017 was less than $0.1 million in both periods. The Company did not record an income tax benefit relating to the options exercised during the six months ended August 31, 2016 or 2017.

The weighted average per share grant date fair value of options granted during the six months ended August 31, 2016 and 2017, was $1.13 and $1.24, respectively.

A summary of the Company’s nonvested options at August 31, 2017, and changes during the six months ended August 31, 2017, is presented below:

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	Options	Weighted Average Grant Date Fair Value
Nonvested, beginning of period	1,090,375	$	2.26
Granted	331,250	1.24
Vested	144,890	4.26
Forfeited	8,331	1.10
Nonvested, end of period	1,268,404	1.77

There were 2.3 million shares available for future grants under the Company’s various equity plans (2.0 million shares under the 2017 Equity Compensation Plan and 0.3 million shares under other plans) at August 31, 2017, not including shares that may become available for future grants upon forfeiture, lapse or surrender for taxes.

The vesting dates of outstanding options at August 31, 2017 range from September 2017 to July 2020, and expiration dates range from March 2018 to August 2027.

Restricted Stock Awards

The Company grants restricted stock awards to directors annually, and periodically grants restricted stock to employees in connection with employment agreements. Awards to directors are granted on the date of our annual meeting of shareholders and vest on the earlier of (i) the completion of the director’s 3-year term or (ii) the third anniversary of the date of grant. Restricted stock award grants are granted out of the Company’s 2017 Equity Compensation Plan. The Company may also award, out of the Company’s 2017 Equity Compensation Plan, stock to settle certain bonuses and other compensation that otherwise would be paid in cash. Any restrictions on these shares may be immediately lapsed on the grant date.

The following table presents a summary of the Company’s restricted stock grants outstanding at August 31, 2017, and restricted stock activity during the six months ended August 31, 2017 (“Price” reflects the weighted average share price at the date of grant):

	Awards	Price
Grants outstanding, beginning of period	196,706	$	4.64
Granted	346,462	2.87
Vested (restriction lapsed)	163,802	3.65
Grants outstanding, end of period	379,366	3.45

The total grant date fair value of shares vested during the six months ended August 31, 2016 and 2017, was $1.0 million and $0.6 million, respectively.

Recognized Non-Cash Compensation Expense

The following table summarizes stock-based compensation expense recognized by the Company during the three months and six months ended August 31, 2016 and 2017. The Company did not recognize any tax benefits related to stock-based compensation during the periods presented below.

	Three Months Ended August 31,				Six Months Ended August 31,
	2016		2017		2016		2017
Station operating expenses	$	197	$	177	$	534	$	326
Corporate expenses	463		530		982		1,070
Stock-based compensation expense included in operating expenses	$	660	$	707	$	1,516	$	1,396

As of August 31, 2017, there was $1.8 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based compensation arrangements. The cost is expected to be recognized over a weighted average period of approximately 1.3 years.

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Note 3. Intangible Assets and Goodwill

Valuation of Indefinite-lived Broadcasting Licenses

In accordance with ASC Topic 350, Intangibles—Goodwill and Other, the Company’s Federal Communications Commission (“FCC”) licenses are considered indefinite-lived intangibles. These assets, which the Company determined were its only indefinite-lived intangibles, are not subject to amortization, but are tested for impairment at least annually as discussed below.

The carrying amounts of the Company’s FCC licenses were $197.7 million and $195.6 million as of February 28, 2017 and August 31, 2017, respectively. The decrease in the carrying amount of FCC licenses relates to our sale of KPWR-FM (see Note 10 for more discussion). Pursuant to Emmis’ accounting policy, stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA with another broadcaster. The Company generally performs its annual impairment test of indefinite-lived intangibles as of December 1 of each year. When indicators of impairment are present, the Company will perform an interim impairment test. During the six months ended August 31, 2017, no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. These impairment tests may result in impairment charges in future periods.

Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company uses an income valuation method when it performs its impairment tests. Under this method, the Company projects cash flows that would be generated by each of its units of accounting assuming the unit of accounting was commencing operations in its respective market at the beginning of the valuation period. This cash flow stream is discounted to arrive at a value for the FCC license. The Company assumes the competitive situation that exists in each market remains unchanged, with the exception that its unit of accounting commenced operations at the beginning of the valuation period. In doing so, the Company extracts the value of going concern and any other assets acquired, and strictly values the FCC license. Major assumptions involved in this analysis include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA.

Valuation of Goodwill

The carrying amounts of the Company's goodwill, all of which were attributable to our radio division, were $4.6 million as of February 28, 2017 and August 31, 2017. ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually. The Company conducts its impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. When assessing its goodwill for impairment, the Company generally uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units, with radio stations grouped by market. Management determines enterprise value for each of its reporting units by multiplying the two-year average station operating income generated by each reporting unit (current year based on actual results and the next year based on budgeted results) by an estimated market multiple. The Company uses a blended station operating income trading multiple of publicly traded radio operators as a benchmark for the multiple it applies to its radio reporting units. Management believes this methodology for valuing radio properties is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons and recent market transactions. To corroborate the fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit. If the carrying value of a reporting unit's goodwill exceeds its fair value, the Company recognizes an impairment charge equal to the difference in the statement of operations.

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Definite-lived intangibles

As of August 31, 2017, the Company’s definite-lived intangible assets consist of trademarks and a syndicated programming contract, both of which are amortized over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. Trademarks related to KPWR-FM were sold during the three months ended August 31, 2017. See Note 10 for more discussion of the sale of KPWR-FM. The following table presents the weighted-average useful life, gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at February 28, 2017 and August 31, 2017:

		As of February 28, 2017						As of August 31, 2017
		(in 000's)
	Weighted Average Remaining Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks	7.8	$	696	$	545	$	151	$	397	$	318	$	79
Customer lists	N/A	315		289		26		—		—		—
Programming agreement	4.1	2,154		808		1,346		2,154		955		1,199
TOTAL		$	3,165	$	1,642	$	1,523	$	2,551	$	1,273	$	1,278

In accordance with Accounting Standards Codification paragraph 360-10, the Company performs an analysis to (i) determine if indicators of impairment of a long-lived asset are present, (ii) test the long-lived asset for recoverability by comparing undiscounted cash flows of the long-lived asset to its carrying value and (iii) measure any potential impairment by comparing the long-lived asset's fair value to its current carrying value.

Total amortization expense from definite-lived intangibles for the six-month periods ended August 31, 2016 and 2017 was $0.5 million and $0.1 million, respectively. The following table presents the Company's estimate of future amortization expense for definite-lived intangibles:

Year ended February 28 (29),	Expected Amortization Expense
	(in 000's)
Remainder of 2018	$	153
2019	304
2020	304
2021	304
2022	181
Thereafter	32
Total	$	1,278

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Note 4. Long-term Debt

Long-term debt was comprised of the following at February 28, 2017 and August 31, 2017:

	February 28, 2017			August 31, 2017
2014 Credit Agreement debt :
Revolver	$	—		$	5,000
Term Loan	152,245			74,421
Total 2014 Credit Agreement debt	152,245			79,421
98.7FM non-recourse debt	59,958			57,008
Other non-recourse debt (1)	8,807			9,868
Less: Current maturities	(23,600		)	(16,367		)
Less: Unamortized original issue discount	(7,038		)	(4,686		)
Total long-term debt	$	190,372		$	125,244

⁽¹⁾ The face value of other non-recourse debt was $9.5 million and $10.2 million at February 28, 2017 and August 31, 2017, respectively

2014 Credit Agreement

On June 10, 2014, Emmis entered into the 2014 Credit Agreement, by and among the Company, EOC, as borrower (the “Borrower”), certain other subsidiaries of the Company, as guarantors (the “Subsidiary Guarantors”), the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Fifth Third Bank, as syndication agent. Capitalized terms in this section not defined elsewhere in this 10-Q are defined in the 2014 Credit Agreement and related amendments.

The 2014 Credit Agreement includes a senior secured term loan facility (the “Term Loan”) of $185.0 million and a senior secured revolving credit facility of $20.0 million, and contains provisions for an uncommitted increase of up to $20.0 million principal amount (plus additional amounts so long as a pro forma total net senior secured leverage ratio condition is met) of the revolving credit facility and/or the Term Loan subject to the satisfaction of certain conditions. The revolving credit facility includes a sub-facility for the issuance of up to $5.0 million of letters of credit. Pursuant to the 2014 Credit Agreement, the Borrower borrowed $185.0 million of the Term Loan on June 10, 2014.

As a result of the Fourth Amendment to the 2014 Credit Agreement discussed below, the Term Loan is due not later than April 18, 2019 and the revolving credit facility expires on August 31, 2018. The Company no longer makes quarterly amortization payments related to the Term Loan as a result of repayments made in connection with the Company's sale of KPWR-FM. Subsequent to the Fourth Amendment to the 2014 Credit Agreement, 75 basis points per annum is payable quarterly on the average unused amount of the revolving credit facility. Prior to the amendments to the 2014 Credit Agreement discussed below, the Term Loan and amounts borrowed under the revolving credit facility bore interest, at the Borrower’s option, at either (i) the Alternate Base Rate (as defined in the 2014 Credit Agreement) (but not less than 2.00%) plus 3.75% or (ii) the Adjusted LIBO Rate (as defined in the 2014 Credit Agreement) (but not less than 1.00%) plus 4.75%.

The 2014 Credit Agreement is carried on our condensed consolidated balance sheets net of an original issue discount. The original issue discount, which was $5.1 million and $2.9 million as of February 28, 2017 and August 31, 2017, respectively, is being amortized as additional interest expense over the life of the 2014 Credit Agreement. In connection with the Term Loan repayment made during the three months ended August 31, 2017 as a result of the KPWR-FM sale, the Company wrote-off $2.5 million of the original issue discount which is recorded as loss on debt extinguishment in the accompanying condensed consolidated financial statements.

The obligations under the 2014 Credit Agreement are secured by a perfected first priority security interest in substantially all of the assets of the Company, the Borrower and the Subsidiary Guarantors.

On November 7, 2014, Emmis entered into the First Amendment to the 2014 Credit Agreement. The First Amendment (i) increased the maximum Total Leverage Ratio to 6.00:1.00 for the period February 28, 2015 through February 29, 2016, (ii) adjusted the definition of Consolidated EBITDA to exclude during the term of the 2014 Credit Agreement up to $5 million in severance and/or contract termination expenses and up to $2.5 million in losses attributable to the reformatting of the Company’s radio stations, (iii) extended the requirement for the Borrower to pay a 1.00% fee on certain prepayments of the Term Loan to November 7, 2015, (iv) increased the Applicable Margin by 0.25% for at least six months from the date of the First Amendment and until the Total Leverage Ratio is less than 5.00:1.00, and (v) made certain technical adjustments to the

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definition of Consolidated Excess Cash Flow and to address the Foreign Account Tax Compliance Act. Emmis paid a total of approximately $1.0 million of transaction fees to the Lenders that consented to the First Amendment, which were recorded as original issue discount and are being amortized over the remaining life of the 2014 Credit Agreement.

On April 30, 2015, Emmis entered into the Second Amendment to the 2014 Credit Agreement. The Second Amendment (i) increased the maximum Total Leverage Ratio to (A) 6.75:1.00 during the period from May 31, 2015 through February 29, 2016, (B) 6.50:1.00 for the quarter ended May 31, 2016, (C) 6.25:1.00 for the quarter ended August 31, 2016, (D) 6.00:1.00 for the quarter ended November 30, 2016, and (E) 5.75:1.00 for the quarter ended February 28, 2017, after which it reverted to the original ratio of 4.00:1.00 for the quarters ended May 31, 2017 and thereafter, (ii) required Emmis to pay a 2.00% fee on certain prepayments of the Term Loan prior to the first anniversary of the Second Amendment and required Emmis to pay a 1.00% fee on certain prepayments of the Term Loan from the first anniversary of the Second Amendment until the second anniversary of the Second Amendment, (iii) increased the Applicable Margin throughout the remainder of the term of the Credit Agreement to 5.00% for ABR Loans (as defined in the Credit Agreement) and 6.00% for Eurodollar Loans (as defined in the 2014 Credit Agreement), and (iv) increased the amortization to 0.50% per calendar quarter through January 1, 2016 and to 1.25% per calendar quarter thereafter commencing April 1, 2016. Emmis paid a total of approximately $1.1 million of transaction fees to the Lenders that consented to the Second Amendment, which were recorded as original issue discount and are being amortized over the remaining life of the 2014 Credit Agreement.

On August 22, 2016, Emmis entered into the Third Amendment to the 2014 Credit Agreement. The Third Amendment made certain changes to the Credit Agreement to facilitate the Company's consideration of and, if approved by the Company's Board of Directors and shareholders, entry into a transaction that would have resulted in the Class A common stock of the Company ceasing to be registered under the Securities Act of 1934 (such potential transaction, a "Going Private Transaction"). Specifically, the Third Amendment added an exception to the covenant restricting transactions with affiliates that (i) permitted the Company to enter into a Going Private Transaction with an affiliate of the Company and (ii) permitted the Borrower to pay any costs incurred or reimbursed by an affiliate of the Company in connection with a Going Private Transaction, whether or not the transaction was consummated. The Third Amendment also allowed the Company to add certain costs and expenses incurred in connection with a Going Private Transaction to Consolidated EBITDA, as defined in the Credit Agreement, for purposes of determining compliance with the financial covenants in the Credit Agreement, subject to caps of (i) $2.5 million if a Going Private Transaction was not recommended by a special committee of the Company’s Board of Directors and (ii) $8.0 million if a Going Private Transaction was recommended by a special committee of the Company’s Board of Directors but not consummated. Finally, the Third Amendment made certain changes to the Credit Agreement that would have been effective only if a Going Private Transaction was consummated. The Third Amendment also required the Borrower to pay a 50 basis point fee to the lenders that consented to it either if a Going Private Transaction was consummated or if such a transaction was recommended by a special committee of the board of directors of the Company but not consummated. The special committee of the board of directors did not recommend the Going Private Transaction and no such transaction was consummated.

On April 18, 2017, Emmis entered into a Fourth Amendment to our 2014 Credit Agreement. The Fourth Amendment (i) eliminated the maximum Total Leverage Ratio covenant through May 31, 2018 and replaced it with a minimum Consolidated EBITDA covenant, after which it reverts to a Total Leverage Ratio of 4.00:1.00 for the quarters ended August 31, 2018 and thereafter, (ii) reduced the Interest Coverage Ratio from 2.00:1.00 to 1.60:1.00, (iii) required Emmis to enter into definitive agreements by January 18, 2018 to sell assets that generate at least $80 million of sale proceeds and close such transactions no later than July 18, 2018, (iv) increased the Applicable Margin throughout the remainder of the term of the Credit Agreement to 6.00% for ABR Loans (as defined in the 2014 Credit Agreement) and 7.00% for Eurodollar Loans (as defined in the 2014 Credit Agreement) and increased the unused commitment fee on the revolving credit facility to 75 basis points, and (v) accelerated the maturity of the Term Loans to April 18, 2019 and the Revolving Loans to August 31, 2018. In addition to tightening or eliminating baskets and other credit enhancements for lenders, the Fourth Amendment contains ratcheting fees and premiums if the existing credit facility is not refinanced by July 18, 2018. The Fourth Amendment also required Emmis to pay a fee of 1.0% of the Term Loan holdings and Revolving Commitment of each Lender that consented to the Fourth Amendment. This fee totaled $1.5 million and was recorded as additional original issue discount and is being amortized as interest expense over the remaining life of the 2014 Credit Agreement, beginning in the three-month period ending May 31, 2017.

In connection with the closing of the sale of Texas Monthly on November 1, 2016, Emmis repaid $15.0 million of Term Loans and $8.5 million of Revolver borrowings. Under the terms of the 2014 Credit Agreement, Emmis was required to use all Net Available Proceeds (as defined in the 2014 Credit Agreement) from the sale of Texas Monthly to repay Term Loans unless it exercised its right under the 2014 Credit Agreement to reinvest a portion of the Net Available Proceeds in new long-term assets of the Company. On November 1, 2016, Emmis exercised this reinvestment right for up to $10.0 million of Net Available Proceeds. This election allows the Company to reduce the amount of Net Available Proceeds by amounts used to purchase assets within 365 days of the election, or 545 days of the election so long as the asset purchase is under contract within 365 days. Routine capital expenditures qualify as a reinvestment under the terms of the 2014 Credit Agreement. Future changes in

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these estimates will impact the calculation of Net Available Proceeds. The current calculation of Net Available Proceeds, reinvestments and Term Loan repayments related to the sale of Texas Monthly is as follows:

	Term Loan Repayments Texas Monthly Sale
Gross proceeds from the sale of Texas Monthly	$	25,000
Working capital and other closing adjustments	(747		)
Transaction costs, including severance	(1,378		)
Subtotal	22,875
Less: Reinvestments (estimated)	(3,475		)
Less: Term Loan repayment on November 1, 2016	(15,000		)
Remaining Net Available Proceeds, subject to finalization of reinvestments	$	4,400

The current estimate of $4.4 million of remaining net available proceeds is included as a current maturity of long-term debt in the accompanying condensed consolidated balance sheets as of August 31, 2017. The amount is not yet final as reinvestments are estimated and could change prior to the conclusion of the reinvestment period as described above.

We were in compliance with all financial and non-financial covenants as of August 31, 2017. Our Minimum Consolidated EBITDA and Interest Coverage Ratio (each as defined in the 2014 Credit Agreement and related amendments) requirements and actual amounts as of August 31, 2017 were as follows:

	As of August 31, 2017
	Covenant Requirement			Actual Results
Minimum Consolidated EBITDA	$	13.6	million	$	17.5	million
Minimum Interest Coverage Ratio	1.60 : 1.00			2.59 : 1.00

98.7FM Non-recourse Debt

On May 30, 2012, the Company, through wholly-owned, newly-created subsidiaries, issued $82.2 million of non-recourse notes. Teachers Insurance and Annuity Association of America, through a participation agreement with Wells Fargo Bank Northwest, National Association, is entitled to receive payments made on the notes. The notes are obligations only of the newly-created subsidiaries, are non-recourse to the rest of the Company and its subsidiaries, and are secured by the assets of the newly-created subsidiaries, including the payments made to the newly-created subsidiary related to the 98.7FM LMA, which are guaranteed by Disney Enterprises, Inc. The notes bear interest at 4.1%. The 98.7FM non-recourse notes are carried on our condensed consolidated balance sheets net of an original issue discount. The original issue discount, which was $2.0 million and $1.8 million as of February 28, 2017 and August 31, 2017, respectively, is being amortized as additional interest expense over the life of the notes.

Other Non-recourse Debt

Digonex non-recourse notes payable consist of notes payable issued by Digonex, which were recorded at fair value on June 16, 2014, the date that Emmis acquired a controlling interest in Digonex. The notes payable, some of which are secured by the assets of Digonex, are non-recourse to the rest of the Company and its subsidiaries. During the quarter ended August 31, 2017, Digonex noteholders agreed to extend the maturity date of the notes from December 31, 2017 to December 31, 2020. The notes accrue interest at 5.0% per annum with interest due at maturity. The face value of the notes payable is $6.2 million. The Company is accreting the difference between this face value and the original $3.6 million fair value of the notes payable recorded in the acquisition of its controlling interest of the business as interest expense over the remaining term of the notes payable.

During the quarter ended May 31, 2017, NextRadio, LLC issued $0.7 million of notes payable, bringing the cumulative total of notes payable issued by NextRadio, LLC to $4.0 million. The notes initially bear interest at 4.0% with interest due quarterly beginning in August 2018. The notes mature on December 23, 2021 and are to be repaid through revenues generated by enhanced advertisement revenues earned by NextRadio, LLC. If any portion of the notes remain unpaid at maturity, the lender has the option to exchange the notes for senior preferred equity of NextRadio, LLC's parent entity, TagStation, LLC. These notes are obligations of NextRadio, LLC and TagStation, LLC and are non-recourse to the rest of Emmis' subsidiaries.

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Based on amounts outstanding at August 31, 2017, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below:

	2014 Credit Agreement				98.7FM Non-recourse		Other Non-recourse
Year ended February 28 (29),	Revolver		Term Loan		Debt		Debt		Total Payments
Remainder of 2018	$	—	$	4,400	$	3,089	$	—	$	7,489
2019	5,000		—		6,587		—		11,587
2020	—		70,021		7,150		—		77,171
2021	—		—		7,755		6,239		13,994
2022	—		—		8,394		4,000		12,394
Thereafter	—		—		24,033		—		24,033
Total	$	5,000	$	74,421	$	57,008	$	10,239	$	146,668

Note 5. Liquidity and Going Concern

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The Company adopted ASU 2014-15 during the year ended February 28, 2017. Subsequent to adoption, the Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period, including interim periods.

In evaluating the Company’s ability to continue as a going concern, management evaluated the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the interim financial statements were issued (October 12, 2017). Management considered the Company’s current projections of future cash flows, current financial condition, sources of liquidity and debt obligations due on or before October 12, 2018.

As of August 31, 2017, the Company classified its $5.0 million revolver debt as current because the revolver expires on August 31, 2018. The Company also classified $4.4 million of Term Loan debt associated with the proceeds received from the sale of Texas Monthly as current because it is due during the quarter ending November 30, 2017. The Company also expects to pay approximately $6.5 million of cash interest obligations related to our 2014 Credit Agreement and $3.2 million of income taxes to various tax jurisdictions prior to October 12, 2018. The Company’s current projections indicate that forecasted cash flows may be insufficient for the Company to settle all of these obligations in full and continue without a revolver subsequent to August 31, 2018.

Management is currently exploring a number of options that would allow the Company to meet all of the aforementioned obligations. Management believes that it is probable that it will refinance the debt outstanding under the 2014 Credit Agreement prior to August 31, 2018. The Company has successfully refinanced its credit agreement debt many times in the past. Recent asset sales and associated term loan repayments have significantly reduced the Company’s leverage ratio, which management believes will enhance its ability to refinance the debt. Management is also exploring several alternatives that would further reduce our leverage ratio, including the sale of WLIB-AM in New York City. While management does not believe the sale of this or any other asset is required to complete a refinancing, management believes it would likely improve the economics of a refinancing for the Company.

Management's intention and belief that the credit agreement debt will be refinanced during the next twelve months assumes, among other things, that the Company will continue to be successful in implementing its business strategy and that there will be no material adverse developments in its business, liquidity or capital requirements. If one or more of these factors do not occur as expected, it could cause a default under the Company's credit agreement.

Note 6. Fair Value Measurements

As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The

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hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

Recurring Fair Value Measurements

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of February 28, 2017 and August 31, 2017. The financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

	As of August 31, 2017
	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs		Total
	(in 000's)
Available for sale securities	$	—	$	—	$	800	$	800
Total assets measured at fair value on a recurring basis	$	—	$	—	$	800	$	800
	As of February 28, 2017
	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs		Total
	(in 000's)
Available for sale securities	$	—	$	—	$	800	$	800
Total assets measured at fair value on a recurring basis	$	—	$	—	$	800	$	800

Available for sale securities — Emmis’ available for sale securities are comprised of preferred stock of a private company that is not traded in active markets and is included in other assets, net in the accompanying condensed consolidated balance sheets. The investment is recorded at fair value, which was generally estimated using significant unobservable market parameters, resulting in a level 3 categorization. The carrying value of our preferred stock investment was determined by using implied valuations of recent rounds of financing and by other corroborating evidence, which may include the application of various valuation methodologies including option-pricing and discounted cash flow based models.

Non-Recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis under circumstances and events that include those described in Note 3, Intangible Assets and Goodwill, and are adjusted to fair value only when the carrying values are more than the fair values. The categorization of the framework used to price the assets is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value (see Note 3 for more discussion).

Fair Value of Other Financial Instruments

Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition.

The estimated fair value of financial instruments is determined using the best available market information and appropriate valuation methodologies. Considerable judgment is necessary, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition. The use of different market assumptions may have a material effect on the estimated fair value amounts.

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The following methods and assumptions were used to estimate the fair value of financial instruments:

- Cash and cash equivalents: The carrying amount of these assets approximates fair value because of the short maturity of these instruments.

- 2014 Credit Agreement debt: As of August 31, 2017, the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $76.8 million and $79.4 million, respectively. The Company's estimate of fair value was based on quoted prices of this instrument and is considered a Level 2 measurement.

- Other long-term debt: The Company’s 98.7FM non-recourse debt and other non-recourse debt is not actively traded and is considered a level 3 measurement. The Company believes the current carrying value of its other long-term debt approximates its fair value.

Note 7. Segment Information

The Company’s operations have historically been aligned into three business segments: (i) Radio, (ii) Publishing and (iii) Corporate & Emerging Technologies. Emerging Technologies includes our TagStation, NextRadio and Digonex businesses. These business segments are consistent with the Company’s management of these businesses and its financial reporting structure. Corporate expenses are not allocated to reportable segments. The Company’s segments operate exclusively in the United States.

The accounting policies as described in the summary of significant accounting policies included in the Company’s Annual Report filed on Form 10-K for the year ended February 28, 2017, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments.

Three Months Ended August 31, 2017	Radio			Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	41,764		$	846		$	238		$	42,848
Station operating expenses excluding and depreciation and amortization expense	29,881			1,104			2,919			33,904
Corporate expenses excluding depreciation and amortization expense	—			—			2,538			2,538
Depreciation and amortization	676			5			200			881
Gain on sale of assets, net of disposition costs	(76,745		)	39			—			(76,706		)
Loss on disposal of property and equipment	—			12			—			12
Operating income (loss)	$	87,952		$	(314	)	$	(5,419	)	$	82,219

Three Months Ended August 31, 2016	Radio		Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	45,972	$	12,619		$	183		$	58,774
Station operating expenses excluding LMA fees and depreciation and amortization expense	31,661		12,959			2,371			46,991
Corporate expenses excluding depreciation and amortization expense	—		—			2,453			2,453
Impairment loss on intangible assets	—		—			2,988			2,988
Depreciation and amortization	881		69			332			1,282
Loss on disposal of fixed assets	125		—			—			125
Operating income (loss)	$	13,305	$	(409	)	$	(7,961	)	$	4,935

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Six Months Ended August 31, 2017	Radio			Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	80,470		$	1,990		$	552		$	83,012
Station operating expenses excluding depreciation and amortization expense	56,015			2,459			6,660			65,134
Corporate expenses excluding depreciation and amortization expense	—			—			5,281			5,281
Depreciation and amortization	1,444			10			405			1,859
Gain on sale of assets, net of disposition costs	(76,745		)	39			—			(76,706		)
Loss on disposal of property and equipment	—			12			—			12
Operating income (loss)	$	99,756		$	(530	)	$	(11,794	)	$	87,432

Six Months Ended August 31, 2016	Radio		Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	88,671	$	25,711		$	394		$	114,776
Station operating expenses excluding depreciation and amortization expense	58,936		26,437			4,607			89,980
Corporate expenses excluding depreciation and amortization expense	—		—			5,497			5,497
Impairment loss	—		—			2,988			2,988
Depreciation and amortization	1,788		142			684			2,614
Loss on disposal of property and equipment	125		—			—			125
Operating income (loss)	$	27,822	$	(868	)	$	(13,382	)	$	13,572

Total Assets	Radio		Publishing		Corporate & Emerging Technologies		Consolidated
As of February 28, 2017	$	260,228	$	1,746	$	27,364	$	289,338
As of August 31, 2017	$	258,162	$	697	$	18,417	$	277,276

Note 8. Regulatory, Legal and Other Matters

During the quarter ended August 31, 2017, Emmis filed suit against Hour Media Group, LLC ("Hour") for breach of the asset purchase agreement related to the February 28, 2017 sale of Los Angeles Magazine, Atlanta Magazine, Cincinnati Magazine and Orange Coast Magazine. Hour filed a counterclaim against Emmis alleging that Emmis engaged in a series of actions that constitute a breach of the asset purchase agreement. Emmis believes that Hour's claims are without merit and is vigorously defending this lawsuit. Approximately $0.65 million of the purchase price related to this sale remains in escrow and is likely to remain in escrow until this matter is resolved. This cash is included in restricted cash on our condensed consolidated balance sheets as of August 31, 2017.

Emmis is a party to various other legal proceedings arising in the ordinary course of business. In the opinion of management of the company, however, there are no legal proceedings pending against the Company that we believe are likely to have a material adverse effect on the Company.

Note 9. Income Taxes

Our effective income tax rate was 31% and 6% for the six-month periods ended August 31, 2016 and 2017, respectively. In the prior year, the Company recorded a valuation allowance for its net deferred tax assets generated during the period, including its net operating loss carryforwards, but excluding deferred tax liabilities related to indefinite-lived intangibles. Given the sale of KPWR-FM as discussed in Note 10 and the gain that resulted from the transaction, the Company is estimating its effective tax rate for the fiscal year, which incorporates the reversal of a portion of the valuation allowance, and applying that rate to the pre-tax income for the applicable period, which is primarily responsible for the difference between the statutory rate and the effective tax rate.

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Note 10. Other Significant Events

Sale of KPWR-FM

On August 1, 2017, Emmis closed on its sale of KPWR-FM for gross proceeds of approximately $80.1 million in cash to affiliates of the Meruelo Group. After payment of transaction costs and withholding for estimated tax obligations, net proceeds as defined in the 2014 Credit Agreement totaled approximately $73.6 million and were used to repay term loan indebtedness. As discussed in Note 4, under the terms of the Fourth Amendment to the 2014 Credit Facility, Emmis was required to enter into definitive agreements to sell assets that generated at least $80 million of proceeds by January 18, 2018 and to close on such transactions following receipt of required regulatory approvals. The sale of KPWR-FM satisfied these requirements. Emmis found it more advantageous to sell its standalone radio station in Los Angeles than to sell other assets to meet this requirement.

KPWR-FM was operated pursuant to an LMA from July 1, 2017 through the closing of the sale on August 1, 2017. Affiliates of the Meruelo Group paid an LMA fee to Emmis totaling $0.4 million during this period, which is included in net revenues in the accompanying condensed consolidated statements of operations and in the summary of KPWR-FM results included below.

KPWR-FMhad historically been included in our Radio segment. The following table summarizes certain operating results of KPWR-FM for all periods presented. Pursuant to Accounting Standards Codification 205-20-45-6, interest expense associated with the required Term Loan repayment associated with the sale of KPWR-FM is included in the results below. The sale of KPWR-FM did not qualify for reporting as a discontinued operation as it did not represent a strategic shift for the Company as described in Accounting Standards Codification 205-20-45.

	For the three months ended August 31,					For the six months ended August 31,
	2016		2017			2016		2017
Net revenues	$	6,709	$	2,399		$	13,385	$	7,818
Station operating expenses, excluding depreciation and amortization expense	4,356		2,590			8,729		6,928
Depreciation and amortization	103		—			207		63
Gain on sale of assets, net of disposition costs	—		(76,745		)	—		(76,745		)
Operating income	2,250		76,554			4,449		77,572
Interest expense	1,317		1,055			2,633		2,494
Income before income taxes	933		75,499			1,816		75,078

Unaudited pro forma summary information is presented below for the three-month and six-month periods ended August 31, 2016 and 2017, assuming the November 1, 2016 sale of Texas Monthly, the January 30, 2017 sale of our radio stations in Terre Haute, the February 28, 2017 sale of Los Angeles Magazine, Atlanta Magazine, Cincinnati Magazine and Orange Coast Magazine, the August 1, 2017 sale of KPWR-FM,and therelated mandatory debt repayments of these sales had occurred on the first day of the proforma periods presented below. See Note 7 of our 10-K for the year ending February 28, 2017 for more discussion of the various sales completed during our prior fiscal year.

	For the three months ended August 31, (unaudited)					For the six months ended August 31, (unaudited)
	2016			2017		2016		2017
Net revenues	$	39,856		$	40,451	$	76,686	$	75,201
Station operating expenses, excluding depreciation and amortization expense	30,316			31,275		56,348		58,113
Consolidated net (loss) income	(41		)	1,335		2,119		1,948
Net income attributable to the Company	692			527		2,223		301
Net income per share - basic	$	0.06		$	0.04	$	0.19	$	0.02
Net income per share - diluted	$	0.06		$	0.04	$	0.18	$	0.02

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

Note: Certain statements included in this report or in the financial statements contained herein which are not statements of historical fact, including but not limited to those identified with the words “expect,” “should,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:

• general economic and business conditions;

• fluctuations in the demand for advertising and demand for different types of advertising media;

• our ability to service our outstanding debt;

• competition from new or different media and technologies;

• loss of key personnel;

• increased competition in our markets and the broadcasting industry, including our competitors changing the format of a station they operate to more directly compete with a station we operate in the same market;

• our ability to attract and secure programming, on-air talent, writers and photographers;

• inability to obtain (or to obtain timely) necessary approvals for purchase or sale transactions or to complete the transactions for other reasons generally beyond our control;

• increases in the costs of programming, including on-air talent;

• fluctuations in the market price of publicly traded and other securities;

• new or changing regulations of the Federal Communications Commission or other governmental agencies;

• changes in radio audience measurement methodologies;

• war, terrorist acts or political instability; and other factors mentioned in other documents filed by the Company with the Securities and Exchange Commission.

For a more detailed discussion of these and other risk factors, see the Risk Factors section of our Annual Report on Form 10-K, for the year ended February 28, 2017.Emmis does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

GENERAL

We principally own and operate radio properties located in the United States. Our revenues are mostly affected by the advertising rates our entities charge, as advertising sales represent approximately 65% of our consolidated revenues. These rates are in large part based on our entities’ ability to attract audiences/subscribers in demographic groups targeted by their advertisers. The Nielsen Company generally measures radio station ratings in our domestic markets on a weekly basis using a passive digital system of measuring listening (the Portable People Meter^™). Because audience ratings in a station’s local market are critical to the station’s financial success, our strategy is to use market research and advertising and promotion to attract and retain audiences in each station’s chosen demographic target group.

Our revenues vary throughout the year. As is typical in the broadcasting industry, our revenues and operating income are usually lowest in our fourth fiscal quarter.

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. These barter transactions are recorded at the estimated fair value of the product or service received. We generally confine the use of such trade transactions to promotional items or services for which we would otherwise have paid cash. In addition, it is our general policy not to preempt advertising spots paid for in cash with advertising spots paid for in trade.

The following table summarizes the sources of our revenues for the three-month and six-month periods ended August 31, 2016 and 2017. The category “Non Traditional” principally consists of ticket sales and sponsorships of events our stations and magazines conduct in their local markets. The category “Other” includes, among other items, revenues related to our TagStation and Digonex businesses, network revenues and barter. In the year ended February 28, 2017, we sold Texas Monthly, our radio stations in Terre Haute, Indiana, and Los Angeles Magazine, Atlanta Magazine, Cincinnati Magazine and Orange Coast Magazine. We sold KPWR-FM on August 1, 2017. These sales impact the comparability of the three-month and six-month periods ended August 31, 2016 to the three-month and six-month periods ended August 31, 2017.

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	Three Months Ended August 31,								Six Months Ended August 31,
	2016		% of Total		2017		% of Total		2016		% of Total		2017		% of Total
	(Dollars in thousands)
Net revenues:
Local	$	31,499	53.6	%	$	21,263	49.6	%	$	64,517	56.2	%	$	45,483	54.8	%
National	5,788		9.8	%	4,179		9.8	%	11,507		10.0	%	8,787		10.6	%
Political	304		0.5	%	40		0.1	%	1,164		1.0	%	169		0.2	%
Publication Sales	1,311		2.2	%	99		0.2	%	2,694		2.3	%	209		0.3	%
Non Traditional	9,450		16.1	%	8,763		20.5	%	13,564		11.8	%	11,251		13.6	%
LMA Fees	2,583		4.4	%	3,004		7.0	%	5,166		4.5	%	5,587		6.7	%
Digital	4,058		6.9	%	2,772		6.5	%	8,115		7.1	%	5,800		7.0	%
Other	3,781		6.5	%	2,728		6.3	%	8,049		7.1	%	5,726		6.8	%
Total net revenues	$	58,774			$	42,848			$	114,776			$	83,012

As previously mentioned, we derive approximately 65% of our net revenues from advertising sales. In the six-month period ended August 31, 2017, local sales, excluding political revenues, represented approximately 83% of the advertising revenues for our radio division.

No customer represents more than 10% of our consolidated net revenues. Our top ten categories for radio represent approximately 61% of our radio division’s total advertising net revenues for the six-month periods ended August 31, 2016 and 2017. The automotive industry was the largest category for our radio division for the six-month periods ended August 31, 2016 and 2017, representing approximately 11% and 10% of our radio net revenues, respectively.

The majority of our expenses are fixed in nature, principally consisting of salaries and related employee benefit costs, office and tower rent, utilities, property and casualty insurance and programming-related expenses. However, approximately 20% of our expenses vary in connection with changes in revenues. These variable expenses primarily relate to sales commissions, music license fees and bad debt reserves. In addition, costs related to our marketing and promotions department are highly discretionary and incurred primarily to maintain and/or increase our audience and market share.

SIGNIFICANT TRANSACTIONS

Emmis consummated the following asset sales in the prior fiscal year: (i) the November 1, 2016 sale of Texas Monthly, (ii) the January 30, 2017 sale of our radio stations in Terre Haute, and (iii) the February 28, 2017 sale of Los Angeles Magazine, Atlanta Magazine, Cincinnati Magazine and Orange Coast Magazine. On August 1, 2017, Emmis sold KPWR-FM in Los Angeles. Unaudited pro forma summary information is presented below for the three-month and six-month periods ended August 31, 2016 and 2017, assuming these salesand therelated mandatory debt repayments of these sales had occurred on the first day of the proforma periods presented below. See Note 7 of our 10-K for the year ending February 28, 2017 for more discussion of the various sales completed during our prior fiscal year and see Note 10 of this report for more discussion of our sale of KPWR-FM.

	For the three months ended August 31, (unaudited)					For the six months ended August 31, (unaudited)
	2016			2017		2016		2017
Net revenues	$	39,856		$	40,451	$	76,686	$	75,201
Station operating expenses, excluding depreciation and amortization expense	30,316			31,275		56,348		58,113
Consolidated net (loss) income	(41		)	1,335		2,119		1,948
Net income attributable to the Company	692			527		2,223		301
Net income per share - basic	$	0.06		$	0.04	$	0.19	$	0.02
Net income per share - diluted	$	0.06		$	0.04	$	0.18	$	0.02

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KNOWN TRENDS AND UNCERTAINTIES

The U.S. radio industry is a mature industry and its growth rate has stalled. Management believes this is principally the result of two factors: (1) new media, such as various media distributed via the Internet, telecommunication companies and cable interconnects, as well as social networks, have gained advertising share against radio and other traditional media and created a proliferation of advertising inventory and (2) the fragmentation of the radio audience and time spent listening caused by satellite radio, audio streaming services and podcasts has led some investors and advertisers to conclude that the effectiveness of radio advertising has diminished.

The Company and the radio industry are leading several initiatives to address these issues. The radio industry is working aggressively to increase the number of smartphones and other wireless devices that contain an enabled FM tuner. Most smartphones currently sold in the United States contain an FM tuner. However, most wireless carriers in the United States have not historically permitted the FM tuner to receive the free over-the-air local radio stations it was designed to receive. Furthermore, in many countries outside the United States, enabled FM tuners are made available to smartphone consumers; consequently, radio listening increases. Activating FM as a feature on smartphones sold in the United States has the potential to increase radio listening and improve the perception of the radio industry while offering wireless network providers the benefits of a proven emergency notification system, reduced network congestion from audio streaming services, and a host of new revenue generating applications. Emmis is at the leading edge of this initiative and has developed TagStation^®, a cloud-based software platform that allows a broadcaster to manage album art, meta data and enhanced advertising on its various broadcasts, and NextRadio^®, a smartphone application that marries over-the-air FM radio broadcasts with visual and interactive features, as an industry solution to enrich the user experience of listening to free over-the-air radio broadcasts on their FM-enabled smartphones and other wireless devices. Recently, we introduced the Dial Report^TM, an online data portal that enables advertisers and other interested parties to access rich data about the usage and consumption of radio and the behavior of radio listeners.

On August 9, 2013, NextRadio LLC, a wholly-owned subsidiary of Emmis, entered into an agreement with Sprint whereby Sprint agreed to pre-load the Company's NextRadiosmartphone application on a minimum of 30 million FM-enabled wireless devices on the Sprint wireless network over a three-year period. In return, NextRadio LLC agreed to serve as a conduit for the radio industry to pay Sprint $15 million per year in equal quarterly installments over the three year term and to share with Sprint certain revenue generated by the NextRadio application. NextRadio LLC collected money from the radio industry and forwarded it to Sprint. Emmis has not guaranteed NextRadio LLC's performance under this agreement and Sprint does not have recourse to any Emmis related entity other than NextRadio LLC. Additionally, the agreement does not limit the ability of NextRadio LLC to place the NextRadio application on FM-enabled devices on other wireless networks. Through August 31, 2017, the NextRadio application had not generated a material amount of revenue.

Since the inception of NextRadio LLC's agreement with Sprint through December 7, 2016, NextRadio LLC had remitted to Sprint approximately $33.2 million. Effective December 8, 2016, NextRadio LLC and Sprint entered into an amendment of their original agreement. The amendment called for NextRadio LLC to make installment payments totaling $6.0 million through March 15, 2017, which have been paid. In exchange, Sprint agreed to forgive the remaining $5.8 million that it was due under the original agreement, and in return receive a higher share of certain revenue generated by the NextRadio application. NextRadio LLC received a loan of $4.0 million for the sole purpose of fulfilling the payment obligations to Sprint under the amendment. The loan will be repaid out of proceeds from sales of enhanced advertising through the NextRadio application. During the six months ended August 31, 2017, NextRadio LLC received $0.65 million under the loan, which was promptly remitted to Sprint and included in station operating expenses in the accompanying condensed consolidated statement of operations. In addition, during the six months ended August 31, 2017, Emmis funded $0.3 million of the final payment to Sprint. This amount is also included in station operating expenses in the accompanying condensed consolidated statement of operations.

On July 27, 2015, NextRadio LLC entered into an agreement with AT&T whereby AT&T agreed to include FM chip activation in its Android device specifications to wireless device manufacturers. In exchange, AT&T will receive a share of certain revenue generated by the NextRadio application. This agreement was subsequently assigned to TagStation LLC (the parent entity of NextRadio LLC and owner of the TagStation and NextRadio applications). In August 2015, T-Mobile expressed its intent to include FM chip activation in its device specifications. On September 9, 2016, TagStation LLC entered into an agreement with T-Mobile whereby T-Mobile agreed to include FM chip activation in its Android device specifications to wireless device manufacturers. In exchange, T-Mobile will receive a share of certain revenue generated by the NextRadio application. TagStation LLC has been working directly with numerous device manufacturers to accelerate the availability of NextRadio to consumers. BLU Products, an American mobile phone manufacturer, has chosen to make NextRadio the native FM tuner on its Android smartphones. Alcatel and LG entered into similar arrangements for NextRadio. The Samsung S7 and

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S8 family of smartphones are FM-enabled and NextRadio-compatible across all major U.S. wireless networks. TagStation LLC and the radio industry continue to work with other leading United States wireless network providers, device manufacturers, regulators and legislators to cause FM tuners to be enabled in all smartphones. In addition, NextRadio recently incorporated streaming capabilities into its application so listeners can enjoy NextRadio regardless of whether or not the FM chip in their phone has been enabled.

Emmis granted the U.S. radio industry (as defined in the funding agreements) a call option on substantially all of the assets used in the NextRadio and TagStation businesses in the United States. The call option may be exercised in August 2019 by paying Emmis a purchase price equal to the greater of (i) the appraised fair market value of the NextRadio and TagStation businesses, or (ii) two times Emmis' cumulative investments in the development of the businesses through August 2015. If the call option is exercised, the businesses will continue to be subject to the operating limitations applicable today, and no radio operator will be permitted to own more than 30% of the NextRadio and TagStation businesses.

Along with the rest of the radio industry, the majority of our stations have deployed HD Radio^®. HD Radio offers listeners advantages over standard analog broadcasts, including improved sound quality and additional digital channels. In addition to offering secondary channels, the HD Radio spectrum allows broadcasters to transmit other forms of data. We are participating in a joint venture with other broadcasters to provide the bandwidth that a third party uses to transmit location-based data to hand-held and in-car navigation devices. The number of radio receivers incorporating HD Radio has increased in the past year, particularly in new automobiles. It is unclear what impact HD Radio will have on the markets in which we operate.

The Company has also aggressively worked to harness the power of broadband and mobile media distribution in the development of emerging business opportunities by developing highly interactive websites with content that engages our listeners, deploying mobile applications and streaming our content, harnessing the power of digital video on our websites and YouTube channels, and delivering real-time traffic to navigation devices.

The results of our radio operations are heavily dependent on the results of our stations in the New York market. Following the sale of KPWR-FM in Los Angeles in August 2017, we expect our radio operations in New York to account for approximately 45% of our radio net revenues. Our acquisition of WBLS-FM and WLIB-AM in New York in fiscal 2015 enhanced our ability to adapt to competitive environment shifts in that market, but some of our competitors that operate larger station clusters are able to leverage their market share to extract a greater percentage of available advertising revenue through packaging a variety of advertising inventory at discounted unit rates. Market revenues in New York as measured by Miller Kaplan Arase LLP ("Miller Kaplan"), an independent public accounting firm used by the radio industry to compile revenue information, were up 1.7% for the six months ended August 31, 2017, as compared to the same period of the prior year. During this period, revenues for our New York cluster were down 1.8%. Our New York operations were negatively impacted by intensifying competition for transactional business in the local market. We have made changes in our local sales organization in New York to derive more local, direct business and reduce our reliance on transactional, agency business.

As part of our business strategy, we continually evaluate potential acquisitions of radio stations and other businesses that we believe hold promise for long-term appreciation in value and leverage our strengths. However, Emmis' 2014 Credit Agreement substantially limits our ability to make acquisitions. We also regularly review our portfolio of assets and may opportunistically dispose of assets when we believe it is appropriate to do so. In that respect, on August 19, 2016, we announced that we were exploring strategic alternatives for our publishing division (except Indianapolis Monthly), our radio stations in Terre Haute, Indiana, and WLIB-AM in New York. We completed our sale of Texas Monthly on November 1, 2016, our sale of radio stations in Terre Haute, Indiana on January 30, 2017, and the sale of the remainder of our publishing division (except Indianapolis Monthly) on February 28, 2017. On May 8, 2017, we entered into an agreement to sell our radio station in Los Angeles and completed that sale on August 1, 2017. We continue to explore our options with WLIB-AM in New York.

CRITICAL ACCOUNTING POLICIES

Critical accounting policies are defined as those that encompass significant judgments and uncertainties, and potentially lead to materially different results under different assumptions and conditions. We believe that our critical accounting policies are those described below.

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Revenue Recognition

Broadcasting revenue is recognized as advertisements are aired. Publication revenue is recognized in the month of delivery of the publication. Both broadcasting revenue and publication revenue recognition is subject to meeting certain conditions such as persuasive evidence that an arrangement exists and collection is reasonably assured. These criteria are generally met at the time the advertisement is aired for broadcasting revenue and upon delivery of the publication for publication revenue. Advertising revenues presented in the financial statements are reflected on a net basis, after the deduction of advertising agency fees, usually at a rate of 15% of gross revenues. LMA fee revenue is recognized on a straight-line basis over the term of the LMA.

Digonex provides a dynamic pricing service to online retailers, attractions, live event producers and other customers. Revenue is recognized as recommended prices are delivered to customers. In some cases, this is upon initial delivery of prices, such as for implementations, or over the period of the services agreement for fee-based pricing. Revenue pursuant to some service agreements is not earned until tickets or merchandise are sold and, therefore, revenue is recognized as tickets are sold for the related events or as merchandise is sold.

FCC Licenses and Goodwill

We have made acquisitions in the past for which a significant amount of the purchase price was allocated to FCC licenses and goodwill assets. As of August 31, 2017, we have recorded approximately $200.3 million in goodwill and FCC licenses, which represents approximately 72% of our total assets.

In the case of our radio stations, we would not be able to operate the properties without the related FCC license for each property. FCC licenses are renewed every eight years; consequently, we continually monitor our stations’ compliance with the various regulatory requirements. Historically, all of our FCC licenses have been renewed at the end of their respective periods, and we expect that all FCC licenses will continue to be renewed in the future. We consider our FCC licenses to be indefinite-lived intangibles.

We do not amortize goodwill or other indefinite-lived intangible assets, but rather test for impairment at least annually or more frequently if events or circumstances indicate that an asset may be impaired. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by Accounting Standards Codification (“ASC”) Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA by another broadcaster. Major assumptions involved in the valuation of our FCC licenses include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control. A change in one or more of our major assumptions could result in an impairment charge related to our FCC licenses.

We complete our annual impairment tests as of December 1 of each year and perform additional interim impairment testing whenever triggering events suggest such testing is warranted.

Valuation of Indefinite-lived Broadcasting Licenses

Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company uses an income valuation method when it performs its impairment tests. Under this method, the Company projects cash flows that would be generated by each of its units of accounting assuming the unit of accounting was commencing operations in its respective market at the beginning of the valuation period. This cash flow stream is discounted to arrive at a value for the FCC license. The Company assumes the competitive situation that exists in each market remains unchanged, with the exception that its unit of accounting commenced operations at the beginning of the valuation period. In doing so, the Company extracts the value of going concern and any other assets acquired, and strictly values the FCC license. Major assumptions involved in this analysis include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control. The projections incorporated into our license valuations take current economic conditions into consideration.

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Valuation of Goodwill

ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually. The Company conducts its impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. When assessing its goodwill for impairment, the Company generally uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units, with radio stations grouped by market. Management determines enterprise value for each of its reporting units by multiplying the two-year average station operating income generated by each reporting unit (current year based on actual results and the next year based on budgeted results) by an estimated market multiple. The Company uses a blended station operating income trading multiple of publicly traded radio operators as a benchmark for the multiple it applies to its radio reporting units. Management believes this methodology for valuing radio properties is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons and recent market transactions. To corroborate the fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit. If the carrying value of a reporting unit's goodwill exceeds its fair value, the Company recognizes an impairment charge equal to the difference in the statement of operations.

Deferred Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequence of events that have been recognized in the Company’s financial statements or income tax returns. Income taxes are recognized during the year in which the underlying transactions are reflected in the consolidated statements of operations. Deferred taxes are provided for temporary differences between amounts of assets and liabilities as recorded for financial reporting purposes and amounts recorded for income tax purposes. After determining the total amount of deferred tax assets, the Company determines whether it is more likely than not that some portion of the deferred tax assets will not be realized. If the Company determines that a deferred tax asset is not likely to be realized, a valuation allowance will be established against that asset to record it at its expected realizable value.

Insurance Claims and Loss Reserves

The Company is self-insured for most healthcare claims, subject to stop-loss limits. Claims incurred but not reported are recorded based on historical experience and industry trends, and accruals are adjusted when warranted by changes in facts and circumstances. The Company had $0.8 million and $0.5 million for employee healthcare claims as of February 28, 2017 and August 31, 2017, respectively. The Company also maintains large deductible programs (ranging from $10 thousand to $2 million per occurrence) for general liability, property, director and officer liability, crime, fiduciary liability, workers’ compensation, employment liability, automotive liability and media liability claims.

Results of Operations for the Three-Month and Six-Month Periods Ended August 31, 2017, Compared to August 31, 2016

Net revenues:

	For the Three Months Ended August 31,									For the Six Months Ended August 31,
	2016		2017		$ Change			% Change		2016		2017		$ Change			% Change
	(As reported, amounts in thousands)
Net revenues:
Radio	$	45,972	$	41,764	$	(4,208	)	(9.2	)%	$	88,671	$	80,470	$	(8,201	)	(9.2	)%
Publishing	12,619		846		(11,773		)	(93.3	)%	25,711		1,990		(23,721		)	(92.3	)%
Emerging Technologies	183		238		55			30.1	%	394		552		158			40.1	%
Total net revenues	$	58,774	$	42,848	$	(15,926	)	(27.1	)%	$	114,776	$	83,012	$	(31,764	)	(27.7	)%

Radio net revenues were down for the three-month and six-month periods ended August 31, 2017 mostly due to the commencement of the LMA for KPWR-FM on July 1, 2017 and the eventual sale of KPWR-FM on August 1, 2017. Excluding the effects of radio station sales, our radio net revenues would have been up 2% for the three months ended August 31, 2017 and down 2% for the six months ended August 31, 2017.

We typically monitor the performance of our stations against the aggregate performance of the markets in which we operate based on reports for the period prepared by Miller Kaplan. Miller Kaplan reports are generally prepared on a gross revenues basis and exclude revenues from barter and syndication arrangements. Miller Kaplan reported gross revenues for our radio markets increased 0.9% for the six-month period ended August 31, 2017, as compared to the same period of the prior

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year. Our gross revenues reported to Miller Kaplan were down 2.2% for the six-month period ended August 31, 2017, as compared to the same period of the prior year. Our performance exceeded the market average in St. Louis and Austin, but we lagged the market average in New York and Indianapolis.

Publishing net revenues decreased during the three-month and six-month period ended August 31, 2017 due to the sale of all but one of our magazines during the year ended February 28, 2017.

Emerging technologies net revenues, which primarily relate to licensing fees of our TagStation software and pricing services provided by Digonex, increased during the three-month and six-month periods ended August 31, 2017. This increase principally relates to client growth at Digonex.

Station operating expenses excluding depreciation and amortization expense:

	For the Three Months Ended August 31,									For the Six Months Ended August 31,
	2016		2017		$ Change			% Change		2016		2017		$ Change			% Change
	(As reported, amounts in thousands)
Station operating expenses excluding depreciation and amortization expense:
Radio	$	31,661	$	29,881	$	(1,780	)	(5.6	)%	$	58,936	$	56,015	$	(2,921	)	(5.0	)%
Publishing	12,959		1,104		(11,855		)	(91.5	)%	26,437		2,459		(23,978		)	(90.7	)%
Emerging Technologies	2,371		2,919		548			23.1	%	4,607		6,660		2,053			44.6	%
Total station operating expenses excluding depreciation and amortization expense	$	46,991	$	33,904	$	(13,087	)	(27.9	)%	$	89,980	$	65,134	$	(24,846	)	(27.6	)%

The decrease in station operating expenses excluding depreciation and amortization expense for our radio division for the three-month and six-month periods ended August 31, 2017 is due to the sale of our Terre Haute radio stations in the prior year and KPWR-FM in August 2017. Also, KPWR-FM was operated pursuant to an LMA effective July 1, 2017.

The decrease in station operating expenses excluding depreciation and amortization expense for publishing for the three-month and six-month periods ended August 31, 2017 is due to the sale of all but one of our magazines during the year ended February 28, 2017.

Station operating expenses excluding depreciation and amortization expense for emerging technologies increased during the three-month period ended August 31, 2017 mostly due to costs associated with enhancements to the NextRadio application and TagStation platform, including the addition of streaming and enhancements to our data reporting capabilities. Station operating expenses excluding depreciation and amortization expense for emerging technologies increased during the six-month period ended August 31, 2017 due to (i) NextRadio funding $0.65 million of its obligation to Sprint with the proceeds of a third party loan, (ii) Emmis contributing $0.3 million to NextRadio, which was remitted to Sprint in connection with the final payment to Sprint, and (iii) costs associated with enhancements to the NextRadio application and TagStation platform, including the addition of streaming and enhancements to our data reporting capabilities.

Corporate expenses excluding depreciation and amortization expense:

	For the Three Months Ended August 31,								For the Six Months Ended August 31,
	2016		2017		$ Change		% Change		2016		2017		$ Change			% Change
	(As reported, amounts in thousands)
Corporate expenses excluding depreciation and amortization expense	$	2,453	$	2,538	$	85	3.5	%	$	5,497	$	5,281	$	(216	)	(3.9	)%

Corporate expenses excluding depreciation and amortization expense decreased during the six-month period ended August 31, 2017 mostly due to $0.3 million of nonrecurring costs incurred during the prior year related to a going private transaction that was not consummated.

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Impairment loss on intangible assets:

	For the Three Months Ended August 31,									For the Six Months Ended August 31,
	2016		2017		$ Change			% Change		2016		2017		$ Change			% Change
	(As reported, amounts in thousands)
Impairment loss on intangible assets	$	2,988	$	—	$	(2,988	)	(100.0	)%	$	2,988	$	—	$	(2,988	)	(100.0	)%

In connection with an interim review for impairment during the three months ended August 31, 2016, the Company recorded an impairment loss of $2.1 million related to goodwill and $0.9 million related to definite-lived intangibles assets, all of which related to Digonex.

Depreciation and amortization:

	For the Three Months Ended August 31,									For the Six Months Ended August 31,
	2016		2017		$ Change			% Change		2016		2017		$ Change			% Change
	(As reported, amounts in thousands)
Depreciation and amortization:
Radio	$	881	$	676	$	(205	)	(23.3	)%	$	1,788	$	1,444	$	(344	)	(19.2	)%
Publishing	69		5		(64		)	(92.8	)%	142		10		(132		)	(93.0	)%
Corporate & Emerging Technologies	332		200		(132		)	(39.8	)%	684		405		(279		)	(40.8	)%
Total depreciation and amortization	$	1,282	$	881	$	(401	)	(31.3	)%	$	2,614	$	1,859	$	(755	)	(28.9	)%

The decrease in radio depreciation and amortization expense for the three-month and six-month periods ended August 31, 2017 is related to the cessation of depreciation expense on certain equipment that has reached the end of its depreciable life, coupled with the decline in depreciation and amortization as a result of the sale of KPWR-FM.

The decrease in publishing depreciation and amortization expense for the three-month and six-month periods ended August 31, 2017 is due to the sale of all but one of our magazines during the year ended February 28, 2017.

The decrease in corporate & emerging technologies is mostly due to reduced amortization expense of Digonex-related definite-lived intangible assets. The Company recorded an impairment charge in fiscal 2017 related to these definite-lived intangible assets, which reduced the carrying value of these definite-lived intangibles to zero.

Gain on sale of assets, net of disposition costs:

	For the Three Months Ended August 31,									For the Six Months Ended August 31,
	2016		2017			$ Change			% Change	2016		2017			$ Change			% Change
	(As reported, amounts in thousands)
Gain on sale of assets, net of disposition costs:
Radio	$	—	(76,745		)	$	(76,745	)	N/A	$	—	(76,745		)	$	(76,745	)	N/A
Publishing	—		39			39			N/A	—		39			39			N/A
Total gain on sale of assets, net of disposition costs	$	—	$	(76,706	)	$	(76,706	)	N/A	$	—	$	(76,706	)	$	(76,706	)	N/A

During the quarter ended August 31, 2017, the Company closed on its sale of KPWR-FM in Los Angeles and recorded a $76.7 million gain on sale of assets, net of disposition costs.

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Operating income:

	For the Three Months Ended August 31,										For the Six Months Ended August 31,
	2016			2017			$ Change		% Change		2016			2017			$ Change		% Change
	(As reported, amounts in thousands)
Operating income:
Radio	$	13,305		$	87,952		$	74,647	561.0	%	$	27,822		$	99,756		$	71,934	258.6	%
Publishing	(409		)	(314		)	95		23.2	%	(868		)	(530		)	338		38.9	%
Corporate & Emerging Technologies	(7,961		)	(5,419		)	2,542		31.9	%	(13,382		)	(11,794		)	1,588		11.9	%
Total operating income:	$	4,935		$	82,219		$	77,284	1,566.0	%	$	13,572		$	87,432		$	73,860	544.2	%

Radio operating income increased in the three-month and six-month periods ended August 31, 2017 principally due to the gain on sale of KPWR-FM.

Publishing operating income increased in the three-month and six-month periods ended August 31, 2017 due to the sale of all but one of our magazines in fiscal 2017. Collectively, these magazines were not profitable in the first half of fiscal 2017.

Corporate and emerging technologies operating loss decreased in the three-month and six-month periods ended August 31, 2017 mostly due to the $3.0 million impairment charge related to Digonex intangible assets in the prior year that was nonrecurring.

Interest expense:

	For the Three Months Ended August 31,										For the Six Months Ended August 31,
	2016			2017			$ Change		% Change		2016			2017			$ Change		% Change
	(As reported, amounts in thousands)
Interest expense	$	(4,758	)	$	(4,548	)	$	210	(4.4	)%	$	(9,448	)	$	(9,214	)	$	234	(2.5	)%

Interest expense was down slightly for the three-month and six-month periods ended August 31, 2017 due to lower debt balances as compared to the prior year, mostly offset by higher interest rates on amounts outstanding under our 2014 Credit Agreement as a result of the Fourth Amendment to our 2014 Credit Agreement on April 18, 2017. The weighted-average interest rate of debt outstanding under our 2014 Credit Agreement was 7.0% and 8.2% at August 31, 2016 and 2017, respectively.

Provision for income taxes:

	For the Three Months Ended August 31,							For the Six Months Ended August 31,
	2016		2017		$ Change		% Change	2016		2017		$ Change		% Change
	(As reported, amounts in thousands)
Provision for income taxes	$	664	$	4,394	$	3,730	561.7%	$	1,339	$	4,372	$	3,033	226.5	%

During the three-month and six-month periods ended August 31, 2016, the Company was recording a valuation allowance for its net deferred tax assets, including its net operating loss carryforwards, but excluding deferred tax liabilities related to indefinite-lived intangibles. Due to the gain on sale of KPWR-FM in Los Angeles, the Company is estimating its effective tax rate for the fiscal year, which incorporates the reversal of a portion of the valuation allowance, and applying that rate to the pre-tax income for the applicable period.

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Consolidated net (loss) income:

	For the Three Months Ended August 31,								For the Six Months Ended August 31,
	2016			2017		$ Change		% Change	2016		2017		$ Change		% Change
	(As reported, amounts in thousands)
Consolidated net (loss) income	$	(398	)	$	70,765	$	71,163	N/M	$	2,917	$	71,337	$	68,420	2,345.6	%

Consolidated net income for the three-month and six-month periods ended August 31, 2017 increased due to the gain on sale of KPWR-FM.

Liquidity and Capital Resources

Our primary sources of liquidity are cash provided by operations and cash available through revolver borrowings under our 2014 Credit Agreement. Our primary uses of capital during the past few years have been, and are expected to continue to be, investments in our growth businesses, strategic acquisitions, capital expenditures, working capital, debt service requirements and the repayment of debt. The Company continually projects its anticipated cash needs, which include its operating needs, capital needs, and principal and interest payments on its indebtedness.

At August 31, 2017, we had cash and cash equivalents of $4.7 million and net working capital of $3.8 million. At February 28, 2017, we had cash and cash equivalents of $11.3 million and net working capital of $(8.1) million. The increase in net working capital is largely due to a reduction of current maturities associated with our 2014 Credit Agreement debt, coupled with the cyclical nature of the business. Mandatory amortization payments of our Term Loan were eliminated as a result of our repayment of Term Loans in connection with the sale of KPWR-FM in August 2017.

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The Company adopted ASU 2014-15 during the year ended February 28, 2017. Subsequent to adoption, the Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period, including interim periods.

In evaluating the Company’s ability to continue as a going concern, management evaluated the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the interim financial statements were issued (October 12, 2017). Management considered the Company’s current projections of future cash flows, current financial condition, sources of liquidity and debt obligations due on or before October 12, 2018.

As of August 31, 2017, the Company classified its $5.0 million revolver debt as current because the revolver expires on August 31, 2018. The Company also classified $4.4 million of Term Loan debt associated with the proceeds received from the sale of Texas Monthly as current because it is due during the quarter ending November 30, 2017. The Company also expects to pay approximately $6.5 million of cash interest obligations related to our 2014 Credit Agreement and $3.2 million of income taxes to various tax jurisdictions prior to October 12, 2018. The Company’s current projections indicate that forecasted cash flows may be insufficient for the Company to settle all of these obligations in full and continue without a revolver subsequent to August 31, 2018.

Management is currently exploring a number of options that would allow the Company to meet all of the aforementioned obligations. Management believes that it is probable that it will refinance the debt outstanding under the 2014 Credit Agreement prior to August 31, 2018. The Company has successfully refinanced its credit agreement debt many times in the past. Recent asset sales and associated term loan repayments have significantly reduced the Company’s leverage ratio, which management believes will enhance its ability to refinance the debt. Management is also exploring several alternatives that would further reduce our leverage ratio, including the sale of WLIB-AM in New York City. While management does not believe the sale of this or any other asset is required to complete a refinancing, management believes it would likely improve the economics of a refinancing for the Company.

Management's intention and belief that the credit agreement debt will be refinanced during the next twelve months assumes, among other things, that the Company will continue to be successful in implementing its business strategy and that there will be no material adverse developments in its business, liquidity or capital requirements. If one or more of these factors do not occur as expected, it could cause a default under the Company's credit agreement.

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In recent years, the Company has recorded significant impairment charges, mostly attributable to our FCC licenses, goodwill and other definite-lived intangible assets. These impairment charges have had no impact on our liquidity or compliance with debt covenants.

On August 19, 2016, the Company announced it was exploring strategic alternatives for its publishing division, (excluding Indianapolis Monthly), WLIB-AM in New York City, and its Terre Haute radio stations. The Company completed the sale of Texas Monthly on November 1, 2016 for gross proceeds of $25.0 million in cash. The Company completed the sale of its four radio stations in Terre Haute, Indiana, on January 30, 2017 for gross proceeds of $5.2 million in cash. The Company completed the sale of its remaining magazines (except Indianapolis Monthly) on February 28, 2017 for gross proceeds of $6.5 million in cash. We continue to explore our options with WLIB-AM in New York.

The Company completed its sale of KPWR-FM in Los Angeles on August 1, 2017 for gross proceeds of $80.1 million in cash.

Operating Activities

Cash provided by operating activities was $6.1 million during the six months ended August 31, 2016 as compared to cash used in operating activities of $6.6 million for the six months ended August 31, 2017. The decrease in cash provided by operating activities is mostly due to the decrease in operating income (excluding the gain on sale of KPWR-FM), coupled with timing differences related to the settlement of certain accounts payable and accrued expenses.

Investing Activities

Cash used in investing activities was $0.4 million during the six months ended August 31, 2016 as compared to cash provided by investing activities of $79.1 million for the six months ended August 31, 2017. Cash used in investing activities during the six months ended August 31, 2016 entirely related to capital expenditures. Cash provided by investing activities for the six months ended August 31, 2017 related to $80.0 million of cash proceeds from the sale of KPWR-FM partially offset by $0.8 million of capital expenditures. We expect capital expenditures to be approximately $2.2 million in the current fiscal year, compared to $2.9 million in fiscal 2017. We expect that future requirements for capital expenditures will be limited to capital expenditures incurred during the ordinary course of business. We expect to fund future investing activities with cash generated from operating activities and borrowings under our 2014 Credit Agreement.

Financing Activities

Cash used in financing activities was $4.5 million and $79.1 million for the six months ended August 31, 2016 and 2017, respectively. During the six months ended August 31, 2016, cash used in financing activities related to net repayments of debt of $2.2 million, $2.1 million of distributions paid to noncontrolling interests, and $0.3 million of tax withholding settlements on stock issued to employees. During the six months ended August 31, 2017, cash used in financing activities related to net repayments of debt of $75.1 million, $2.3 million of distributions paid to noncontrolling interests, $1.6 million of debt-related costs, and $0.2 million of tax withholding settlements on stock issued to employees.

As of August 31, 2017, Emmis had $79.4 million of borrowings under the 2014 Credit Agreement and $67.2 million ($57.0 million related to 98.7FM in New York, $6.2 million related to Digonex, and $4.0 million related to NextRadio) of non-recourse debt. Borrowings under the 2014 Credit Agreement bear interest, at our option, at a rate equal to the Eurodollar rate or an alternative Base Rate plus a margin. As of August 31, 2017, our weighted average borrowing rate under our 2014 Credit Agreement was approximately 8.2%. The non-recourse debt related to 98.7FM in New York bears interest at 4.1% per annum, the non-recourse debt related to Digonex bears interest at 5.0% per annum, and the non-recourse debt related to NextRadio bears interest at 4.0% per annum.

The debt service requirements of Emmis over the next twelve-month period are expected to be $16.6 million related to our 2014 Credit Agreement, as amended, ($10.1 million of principal repayments and $6.5 million of interest payments) and $8.5 million related to our 98.7FM non-recourse debt ($6.3 million of principal repayments and $2.2 million of interest payments). Digonex non-recourse debt ($6.2 million face amount, $5.9 million carrying amount as of August 31, 2017) is due in December 2020. The Company expects that proceeds from the 98.7FM LMA will be sufficient to pay all debt service related to the 98.7FM non-recourse debt. The 2014 Credit Agreement debt bears interest at variable rates. The Company estimated interest payments for the 2014 Credit Agreement above by using the amounts outstanding under the 2014 Credit Agreement as of August 31, 2017 and the weighted average interest rate as of the same date.

At October 9, 2017, we had $17.0 million available for additional borrowing under our 2014 Credit Agreement. No letters of credit were outstanding. Availability under the 2014 Credit Agreement depends upon our continued compliance with certain operating covenants and financial ratios. Emmis was in compliance with these covenants as of August 31, 2017. As part of our business strategy, we continually evaluate potential acquisitions of radio stations and other businesses that we believe hold

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promise for long-term appreciation in value and leverage our strengths. However, Emmis' 2014 Credit Agreement substantially limits our ability to make acquisitions. We also regularly review our portfolio of assets and may opportunistically dispose of assets when we believe it is appropriate to do so. In that respect, on August 19, 2016, we announced that we were exploring strategic alternatives for our publishing division (except Indianapolis Monthly), our radio stations in Terre Haute, Indiana, and WLIB-AM in New York. We completed our sale of Texas Monthly on November 1, 2016, our sale of radio stations in Terre Haute, Indiana on January 30, 2017, and the sale of the remainder of our publishing division (except Indianapolis Monthly) on February 28, 2017. On May 8, 2017, we entered into an agreement to sell our radio station in Los Angeles and completed that sale on August 1, 2017. We continue to explore our options with WLIB-AM in New York.

Intangibles

As of August 31, 2017, approximately 72% of our total assets consisted of FCC broadcast licenses and goodwill, the values of which depend significantly upon various factors including, among other things, market revenues, market growth rates and the operational results of our businesses. In the case of our U.S. radio stations, we would not be able to operate the properties without the related FCC license for each property. FCC licenses are renewed every eight years; consequently, we continually monitor our stations’ compliance with the various regulatory requirements. Historically, all of our FCC licenses have been renewed at or after the end of their respective periods, and we expect that all FCC licenses will continue to be renewed in the future.

Regulatory, Legal and Other Matters

During the quarter ended August 31, 2017, Emmis filed suit against Hour Media Group, LLC ("Hour") for breach of the asset purchase agreement related to the February 28, 2017 sale of Los Angeles Magazine, Atlanta Magazine, Cincinnati Magazine and Orange Coast Magazine. Hour filed a counterclaim against Emmis alleging that Emmis engaged in a series of actions that constitute a breach of the asset purchase agreement. Emmis believes that Hour's claims are without merit and is vigorously defending this lawsuit. Approximately $0.65 million of the purchase price related to this sale remains in escrow and is likely to remain in escrow until this matter is resolved. This cash is included in restricted cash on our condensed consolidated balance sheets as of August 31, 2017.

Emmis is a party to various other legal proceedings arising in the ordinary course of business. In the opinion of management of the Company, however, there are no legal proceedings pending against the company that we believe are likely to have a material adverse effect on the Company.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to provide this information.

Item 4.    Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, the Company evaluated the effectiveness of the design and operation of its “disclosure controls and procedures” (“Disclosure Controls”). This evaluation (the “Controls Evaluation”) was performed under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).

Based upon the Controls Evaluation, our CEO and CFO concluded that as of August 31, 2017 our Disclosure Controls are effective to provide reasonable assurance that information relating to Emmis Communications Corporation and Subsidiaries that is required to be disclosed by us in the reports that we file or submit, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the period covered by this quarterly report, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

It should be noted that any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

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PART II — OTHER INFORMATION

Item 1.    Legal Proceedings

Refer to Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of various legal proceedings pending against the Company.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended August 31, 2017, there was withholding of shares of common stock upon vesting of restricted stock to cover withholding tax obligations. The following table provides information on our repurchases during the three months ended August 31, 2017:

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid Per Share		(c) Total Number  of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in 000’s)
Class A Common Stock
June 1, 2017 - June 30, 2017	186	$	3.27	—	$	—
July 1, 2017 - July 31, 2017	54,087	$	2.95	—	$	—
August 1, 2017 - August 31, 2017	—	$	—	—	$	—
	54,273			—

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Item 6.    Exhibits

(a) Exhibits.

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

Exhibit		Filed Herewith	Incorporated by Reference
Number	Exhibit Description		Form	Period Ending	Exhibit	Filing Date
3.1	Second Amended and Restated Articles of Incorporation of Emmis Communications Corporation, as amended effective July 7, 2016		8-K		3.1	7/7/2016
3.2	Second Amended and Restated Bylaws of Emmis Communications Corporation		10-K	2/28/2013	3.2	5/8/2013
4.1	Form of stock certificate for Class A common stock		S-1		3.5	12/22/1993
10.1	Form of Option Grant Agreement ++		8-K		10.1	7/13/2017
10.2	Form of Restricted Stock Agreement ++		8-K		10.2	7/13/2017
10.3	Employment Agreement with Patrick M. Walsh effective August 1, 2017 ++		8-K		10.1	8/3/2017
31.1	Certification of Principal Executive Officer of Emmis Communications Corporation pursuant to Rule 13a-14(a) under the Exchange Act	X
31.2	Certification of Principal Financial Officer of Emmis Communications Corporation pursuant to Rule 13a-14(a) under the Exchange Act	X
32.1	Certification of Principal Executive Officer of Emmis Communications Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
32.2	Certification of Principal Financial Officer of Emmis Communications Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.INS	XBRL Instance Document	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	X
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	X

++ Management contract or compensatory plan or arrangement.

-39-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EMMIS COMMUNICATIONS CORPORATION
Date: October 12, 2017	By:	/s/ RYAN A. HORNADAY
		Ryan A. Hornaday
		Executive Vice President, Chief Financial Officer and Treasurer

-40-

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Jeffrey H. Smulyan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Emmis Communications Corporation;

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

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

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 12, 2017
	/s/ JEFFREY H. SMULYAN
	Jeffrey H. Smulyan
	Chairman of the Board and
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Ryan A. Hornaday, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Emmis Communications Corporation;

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

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

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 12, 2017
	/s/ RYAN A. HORNADAY
	Ryan A. Hornaday
	Executive Vice President, Chief Financial Officer and
	Treasurer

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

The undersigned hereby certifies, in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Emmis Communications Corporation (the “Company”), that, to his knowledge:

(1) the Quarterly Report of the Company on Form 10-Q for the period ended August 31, 2017, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: October 12, 2017
	/s/ JEFFREY H. SMULYAN
	Jeffrey H. Smulyan
	Chairman of the Board and
	Chief Executive Officer

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

The undersigned hereby certifies, in accordance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his capacity as an officer of Emmis Communications Corporation (the “Company”), that, to his knowledge:

(1) the Quarterly Report of the Company on Form 10-Q for the period ended August 31, 2017, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

Date: October 12, 2017
	/s/ RYAN A. HORNADAY
	Ryan A. Hornaday
	Executive Vice President, Chief Financial Officer and
	Treasurer

XML

Document and Entity Information - shares	6 Months Ended
	Aug. 31, 2017	Oct. 09, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 31, 2017
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	EMMS
Entity Registrant Name	EMMIS COMMUNICATIONS CORP
Entity Central Index Key	0000783005
Current Fiscal Year End Date	--02-28
Entity Filer Category	Smaller Reporting Company
Class A Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		11,568,454
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		1,142,366
Class C Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		0

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
NET REVENUES	$ 42,848	$ 58,774	$ 83,012	$ 114,776
OPERATING EXPENSES:
Station operating expenses excluding depreciation and amortization expense	33,904	46,991	65,134	89,980
Corporate expenses excluding depreciation and amortization expense	2,538	2,453	5,281	5,497
Impairment loss on intangible assets	0	2,988	0	2,988
Depreciation and amortization	881	1,282	1,859	2,614
Gain on sale of assets, net of disposition costs	76,706	0	76,706	0
Loss on disposal of property and equipment	(12)	(125)	(12)	(125)
Total operating expenses	(39,371)	53,839	(4,420)	101,204
Operating income (loss)	82,219	4,935	87,432	13,572
OTHER EXPENSE:
Interest expense	(4,548)	(4,758)	(9,214)	(9,448)
Loss on debt extinguishment	(2,523)	0	(2,523)	0
Other income, net	11	89	14	132
Total other expense	(7,060)	(4,669)	(11,723)	(9,316)
INCOME BEFORE INCOME TAXES	75,159	266	75,709	4,256
PROVISION FOR INCOME TAXES	4,394	664	4,372	1,339
CONSOLIDATED NET (LOSS) INCOME	70,765	(398)	71,337	2,917
NET (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	808	(733)	1,647	(104)
NET INCOME ATTRIBUTABLE TO THE COMPANY	$ 69,957	$ 335	$ 69,690	$ 3,021
NET INCOME PER SHARE - BASIC	$ 5.69	$ 0.03	$ 5.67	$ 0.25
NET INCOME PER SHARE - DILUTED	$ 5.59	$ 0.03	$ 5.59	$ 0.25
Basic weighted average common shares outstanding	12,292	12,047	12,287	11,922
Diluted weighted average common shares outstanding	12,513	12,299	12,463	12,043

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Depreciation and amortization expense excluded from station operating expenses	$ 701	$ 1,085	$ 1,495	$ 2,195
Depreciation and amortization expenses excluded from corporate expenses	$ 180	$ 197	$ 364	$ 419

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
CONSOLIDATED NET (LOSS) INCOME	$ 70,765	$ (398)	$ 71,337	$ 2,917
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAXES:
LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	808	(733)	1,647	(104)
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$ 69,957	$ 335	$ 69,690	$ 3,021

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 4,718	$ 11,349
Restricted cash	2,161	2,323
Accounts receivable, net	25,454	26,484
Prepaid expenses	4,877	4,798
Other current assets	1,502	1,503
Total current assets	38,712	46,457
PROPERTY AND EQUIPMENT, NET	28,613	30,845
INTANGIBLE ASSETS (NOTE 3):
Indefinite-lived intangibles	195,648	197,666
Goodwill	4,603	4,603
Other intangibles, net	1,278	1,523
Total intangible assets	201,529	203,792
OTHER ASSETS, NET	8,422	8,244
Total assets	277,276	289,338
CURRENT LIABILITIES:
Accounts payable and accrued expenses	4,620	13,398
Current maturities of long-term debt (Note 4)	16,367	23,600
Accrued salaries and commissions	2,061	6,238
Deferred revenue	5,654	4,560
Other current liabilities	6,166	6,807
Total current liabilities	34,868	54,603
LONG-TERM DEBT, NET OF CURRENT MATURITIES (NOTE 4)	125,244	190,372
OTHER NONCURRENT LIABILITIES	5,921	4,842
DEFERRED INCOME TAXES	44,937	43,537
Total liabilities	210,970	293,354
COMMITMENTS AND CONTINGENCIES
(DEFICIT) EQUITY:
Additional paid-in capital	593,556	592,320
Accumulated deficit	(559,691)	(629,381)
Total shareholders’ (deficit) equity	33,992	(36,937)
NONCONTROLLING INTERESTS	32,314	32,921
Total (deficit) equity	66,306	(4,016)
Total liabilities and (deficit) equity	277,276	289,338
Class A common stock, $.01 par value; authorized 42,500,000 shares; issued and outstanding 11,278,065 shares at February 28, 2017 and 11,568,454 shares at August 31, 2017
(DEFICIT) EQUITY:
Common Stock	116	113
Class B common stock, $.01 par value; authorized 7,500,000 shares; issued and outstanding 1,142,366 shares at February 28, 2017 and August 31, 2017
(DEFICIT) EQUITY:
Common Stock	$ 11	$ 11

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Aug. 31, 2017	Feb. 28, 2017
Class A Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	42,500,000	42,500,000
Common stock, shares issued	11,568,454	11,278,065
Common stock, shares outstanding	11,568,454	11,278,065
Class B Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	7,500,000	7,500,000
Common stock, shares issued	1,142,366	1,142,366
Common stock, shares outstanding	1,142,366	1,142,366

XML

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 6 months ended Aug. 31, 2017 - USD ($) $ in Thousands	Total		Additional Paid-in Capital	Accumulated Deficit	Noncontrolling Interests	Class B Common Stock Common Stock	Class A Common Stock Common Stock
Beginning Balance at Feb. 28, 2017	$ (4,016)		$ 592,320	$ (629,381)	$ 32,921	$ 11	$ 113
Beginning Balance (in shares) at Feb. 28, 2017						1,142,366	11,278,065
Net income	71,337			69,690	1,647
Issuance of common stock to employees and officers	1,178		1,175				$ 3
Issuance of common stock to employees and officers (in shares)							263,139
Exercise of stock options	61		61
Distributions to noncontrolling interests	(2,254)				(2,254)
Ending Balance at Aug. 31, 2017	$ 66,306		$ 593,556	$ (559,691)	$ 32,314	$ 11	$ 116
Ending Balance (in shares) at Aug. 31, 2017						1,142,366	11,568,454
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	27,250	[1]					27,250

[1] Cash received from option exercises for the six months ended August 31, 2016 and 2017 was less than $0.1 million in both periods. The Company did not record an income tax benefit relating to the options exercised during the six months ended August 31, 2016 or 2017.

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$ 71,337	$ 2,917
Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities -
Impairment loss on intangible assets	0	2,988
Gain on sale of assets, net of disposition costs	76,706	0
Depreciation and amortization	1,859	2,614
Amortization of debt discount	1,466	854
Noncash accretion of debt	371	371
Loss on debt extinguishment	(2,523)	0
Provision for bad debts	636	53
Provision for deferred income taxes	1,400	1,267
Noncash compensation	1,396	1,516
Loss on disposal of property and equipment	(12)	(125)
Changes in assets and liabilities -
Restricted cash	(162)	354
Accounts receivable	394	(3,458)
Prepaid expenses and other current assets	(96)	(114)
Other assets	(196)	(432)
Accounts payable and accrued liabilities	(12,955)	(2,208)
Deferred revenue	1,161	172
Income taxes	(107)	(82)
Other liabilities	713	(140)
Net cash provided by (used in) operating activities	(6,630)	6,089
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(838)	(711)
Net proceeds from the sale of assets	79,968	283
Distributions from investments, net	0	61
Net cash (used in) provided by investing activities	79,130	(367)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt	(88,774)	(13,165)
Proceeds from long-term debt	13,690	11,000
Debt-related costs	(1,636)	0
Distributions to noncontrolling interests	(2,254)	(2,074)
Proceeds from the exercise of stock options	61	20
Purchase of Class A common stock	0	5
Settlement of tax withholding obligations on stock issued to employees	(218)	(260)
Net cash used in financing activities	(79,131)	(4,484)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(6,631)	1,238
CASH AND CASH EQUIVALENTS:
Beginning of period	11,349	4,456
End of period	4,718	5,694
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	8,321	7,943
Cash paid for income taxes, net	(19)	112
Noncash financing transactions -
Stock issued to employees and directors	$ 1,393	$ 1,518

XML

Summary of Significant Accounting Policies

6 Months Ended

Aug. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Preparation of Interim Financial Statements

Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the condensed consolidated interim financial statements included herein have been prepared, without audit, by Emmis Communications Corporation (“ECC”) and its subsidiaries (collectively, “our,” “us,” “we,” “Emmis” or the “Company”). As permitted under the applicable rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, Emmis believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Emmis filed on Form 10-K for the year ended February 28, 2017. The Company’s results are subject to seasonal fluctuations. Therefore, results shown on an interim basis are not necessarily indicative of results for a full year.

In the opinion of Emmis, the accompanying condensed consolidated interim financial statements contain all material adjustments (consisting only of normal recurring adjustments, except as otherwise noted) necessary to present fairly the consolidated financial position of Emmis at August 31, 2017, the results of its operations for the three-month and six-month periods ended August 31, 2016 and 2017, and cash flows for the six-month periods ended August 31, 2016 and 2017.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended February 28, 2017 that have had a material impact on our condensed consolidated financial statements and related notes.

Common Stock Reverse Split

On July 8, 2016, the Company effected a one-for-four reverse stock split for its Class A, Class B and Class C common

stock. All share and per share information has been retroactively adjusted to reflect the reverse stock split.

Basic and Diluted Net Income Per Common Share

Basic net income per common share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Potentially dilutive securities at August 31, 2016 and 2017 consisted of stock options and restricted stock awards. The following table sets forth the calculation of basic and diluted net income per share:

	For the three months ended
	August 31, 2016					August 31, 2017
	Net Income		Shares	Net Income Per Share		Net Income		Shares	Net Income Per Share
	(amounts in 000’s, except per share data)
Basic net income per common share:
Net income available to common shareholders	$	335	12,047	$	0.03	$	69,957	12,292	$	5.69
Impact of equity awards	—		252			—		221
Diluted net income per common share:
Net income available to common shareholders	$	335	12,299	$	0.03	$	69,957	12,513	$	5.59

	For the six months ended
	August 31, 2016					August 31, 2017
	Net Income		Shares	Net Income Per Share		Net Income		Shares	Net Income Per Share
	(amounts in 000’s, except per share data)
Basic net income per common share:
Net income available to common shareholders	$	3,021	11,922	$	0.25	$	69,690	12,287	$	5.67
Impact of equity awards	—		121	—		—		176	—
Diluted net income per common share:
Net income available to common shareholders	$	3,021	12,043	$	0.25	$	69,690	12,463	$	5.59

Shares excluded from the calculation as the effect of their conversion into shares of our common stock would be antidilutive were as follows:

	For the three months ended August 31,		For the six months ended August 31,
	2016	2017	2016	2017
	(shares in 000’s )
Equity awards	1,340	1,960	1,491	2,276
Antidilutive common share equivalents	1,340	1,960	1,491	2,276

Local Programming and Marketing Agreement Fees

The Company from time to time enters into local programming and marketing agreements (“LMAs”), often pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses in connection with acquisitions or dispositions of radio stations. Under the terms of these agreements, the acquiring company makes specified periodic payments to the holder of the FCC license in exchange for the right to program and sell advertising for a specified portion of the station’s inventory of broadcast time. The acquiring 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.

On May 8, 2017, Emmis and an affiliate of the Meruelo Group (the "Meruelo Group") entered into an LMA and asset purchase agreement related to KPWR-FM in Los Angeles. This LMA started on July 1, 2017 and terminated with the consummation of the sale of KPWR-FM on August 1, 2017. Emmis recognized $0.4 million of LMA fee revenue as a component of net revenues in our accompanying condensed consolidated statements of operations related to this LMA. See Note 10 for more discussion of our sale of KPWR-FM to the Meruelo Group.

On April 26, 2012, Emmis entered into an LMA with a subsidiary of Disney Enterprises, Inc. for 98.7FM in New York (formerly WRKS-FM and now WEPN-FM, hereinafter referred to as “98.7FM”). The LMA for this station started on April 30, 2012 and will continue until August 31, 2024. Emmis retains ownership and control of the station, including the related FCC license during the term of the LMA and is scheduled to receive an annual fee until the LMA’s termination. LMA fee revenue is recorded on a straight-line basis over the term of the LMA as a component of net revenues in our accompanying condensed consolidated statements of operations.

The following table summarizes certain operating results of 98.7FM for all periods presented. Net revenues for 98.7FM are solely related to LMA fees. 98.7FM is a part of our radio segment.

	For the three months ended August 31,				For the six months ended August 31,
	2016		2017		2016		2017
	(amounts in 000's)
Net revenues	$	2,583	$	2,583	$	5,166	$	5,166
Station operating expenses, excluding depreciation and amortization expense	363		296		614		589
Interest expense	715		656		1,443		1,328

Assets and liabilities of 98.7FM as of February 28, 2017 and August 31, 2017 were as follows:

	As of February 28,		As of August 31,
	2017		2017
	(amounts in 000's)
Current assets:
Restricted cash	$	1,550	$	1,511
Prepaid expenses	445		481
Other current assets	7		13
Total current assets	2,002		2,005
Noncurrent assets:
Property and equipment, net	229		274
Indefinite lived intangibles	46,390		46,390
Deposits and other	6,205		6,406
Total noncurrent assets	52,824		53,070
Total assets	$	54,826	$	55,075
Current liabilities:
Accounts payable and accrued expenses	$	54	$	22
Current maturities of long-term debt	6,039		6,317
Deferred revenue	807		835
Other current liabilities	205		195
Total current liabilities	7,105		7,369
Noncurrent liabilities:
Long-term debt, net of current portion and unamortized debt discount	51,954		48,859
Total noncurrent liabilities	51,954		48,859
Total liabilities	$	59,059	$	56,228

Restricted Cash

As of August 31, 2017, restricted cash relates to cash on deposit in trust accounts related to our 98.7FM LMA in New York City that services long-term debt and cash held in escrow as part of our sale of four magazines in February 2017. The table below summarizes restricted cash held by the Company as of February 28, 2017 and August 31, 2017:

	As of February 28,		As of August 31,
	2017		2017
98.7FM LMA restricted cash	$	1,550	$	1,511
NextRadio LLC restricted cash	123		—
Cash held in escrow from sale of magazines restricted cash	650		650
Total restricted cash	$	2,323	$	2,161

Noncontrolling Interests

The Company follows Accounting Standards Codification paragraph 810-10-65-1 to report the noncontrolling interests related to our Austin radio partnership and Digonex Technologies Inc., a dynamic pricing business (hereinafter "Digonex"). We have a 50.1% controlling interest in our Austin radio partnership. We do not own any of the common equity of Digonex, but we consolidate the entity because we control its board of directors via rights granted in convertible preferred stock and convertible debt that we own. As of August 31, 2017, Emmis owns rights that are convertible into approximately 82% of Digonex's common equity.

Noncontrolling interests represent the noncontrolling interest holders' proportionate share of the equity of the Austin radio partnership and Digonex. Noncontrolling interests are adjusted for the noncontrolling interest holders' proportionate share of the earnings or losses of the applicable entity. The noncontrolling interest continues to be attributed its share of losses even if that attribution results in a deficit noncontrolling interest balance. Below is a summary of the noncontrolling interest activity for the six months ended August 31, 2016 and 2017:

	Austin radio partnership			Digonex			Total noncontrolling interests
Balance, February 29, 2016	$	47,556		$	(9,159	)	$	38,397
Net income (loss)	3,048			(3,152		)	(104		)
Distributions to noncontrolling interests	(2,074		)	—			(2,074		)
Balance, August 31, 2016	$	48,530		$	(12,311	)	$	36,219
Balance, February 28, 2017	$	46,830		$	(13,909	)	$	32,921
Net income (loss)	3,151			(1,504		)	1,647
Distributions to noncontrolling interests	(2,254		)	—			(2,254		)
Balance, August 31, 2017	$	47,727		$	(15,413	)	$	32,314

Recent Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU was issued to simplify goodwill impairment by removing the second step of the goodwill impairment test. The Company early adopted this guidance as of March 1, 2017. The adoption of this guidance had no immediate impact on the Company's financial statements, but it could affect future goodwill impairment analysis.

In January 2017, the FASB issued Accounting Standards Update 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU was issued to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be effective for the Company as of March 1, 2018. The Company does not expect adoption of this guidance will have a material impact on the Company's consolidated financial statements.

In November 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective for the Company as of March 1, 2018, and requires a retrospective transition method. The Company does not expect adoption of this guidance will have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842). This update requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases of greater than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance will be effective for the Company as of March 1, 2019. A modified retrospective transition method is required. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles used to recognize revenue for all entities. The FASB deferred implementation of this guidance by one year with the issuance of Accounting Standards Update 2015-14. As such, this guidance will be effective for the Company as of March 1, 2018. The Company expects to use the modified retrospective method of adoption. The Company has completed its initial evaluation of potential changes from adopting the new standard on its financial reporting and disclosures, which included a detailed review of contractual terms for all of its significant revenue streams. The Company will complete its implementation plan during in the remainder of fiscal 2018. Based on its initial evaluation, the Company does not expect adoption of this guidance will have a material impact on the Company's consolidated financial statements, but disclosures related to revenue recognition will likely be expanded.

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Share Based Payments

6 Months Ended

Aug. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share Based Payments

Share Based Payments

The amounts recorded as share based compensation expense consist of stock option grants, restricted stock grants, and common stock issued to employees and directors in lieu of cash payments.

Stock Option Awards

The Company has granted options to purchase its common stock to employees and directors of the Company under various stock option plans at no less than the fair market value of the underlying stock on the date of grant. These options are granted for a term not exceeding 10 years and are forfeited, except in certain circumstances, in the event the employee or director terminates his or her employment or relationship with the Company. Generally, these options either vest annually over 3 years (one-third each year for 3 years), or cliff vest at the end of 3 years. The Company issues new shares upon the exercise of stock options.

The fair value of each option awarded is estimated on the date of grant using a Black-Scholes option-pricing model and expensed on a straight-line basis over the vesting period. Expected volatilities are based on historical volatility of the Company’s stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. The Company includes estimated forfeitures in its compensation cost and updates the estimated forfeiture rate through the final vesting date of awards. The risk-free interest rate for periods within the life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The following assumptions were used to calculate the fair value of the Company’s options on the date of grant during the six months ended August 31, 2016 and 2017:

	Six Months Ended August 31,
	2016	2017
Risk-Free Interest Rate:	0.9% - 1.2%	1.7% - 1.9%
Expected Dividend Yield:	0%	0%
Expected Life (Years):	4.3	4.4
Expected Volatility:	58.6% - 60.0%	52.9% - 53.6%

The following table presents a summary of the Company’s stock options outstanding at August 31, 2017, and stock option activity during the six months ended August 31, 2017 (“Price” reflects the weighted average exercise price per share; "Aggregate Intrinsic Value" dollars in thousands):

	Options	Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding, beginning of period	2,559,643	$	5.17
Granted	331,250	2.77
Exercised	27,250	2.25
Forfeited	8,331	2.29
Expired	74,815	14.15
Outstanding, end of period	2,780,497	4.68		6.9	$	277
Exercisable, end of period	1,512,093	5.47		5.1	$	215

Cash received from option exercises for the six months ended August 31, 2016 and 2017 was less than $0.1 million in both periods. The Company did not record an income tax benefit relating to the options exercised during the six months ended August 31, 2016 or 2017.

The weighted average per share grant date fair value of options granted during the six months ended August 31, 2016 and 2017, was $1.13 and $1.24, respectively.

A summary of the Company’s nonvested options at August 31, 2017, and changes during the six months ended August 31, 2017, is presented below:

	Options	Weighted Average Grant Date Fair Value
Nonvested, beginning of period	1,090,375	$	2.26
Granted	331,250	1.24
Vested	144,890	4.26
Forfeited	8,331	1.10
Nonvested, end of period	1,268,404	1.77

There were 2.3 million shares available for future grants under the Company’s various equity plans (2.0 million shares under the 2017 Equity Compensation Plan and 0.3 million shares under other plans) at August 31, 2017, not including shares that may become available for future grants upon forfeiture, lapse or surrender for taxes.

The vesting dates of outstanding options at August 31, 2017 range from September 2017 to July 2020, and expiration dates range from March 2018 to August 2027.

Restricted Stock Awards

The Company grants restricted stock awards to directors annually, and periodically grants restricted stock to employees in connection with employment agreements. Awards to directors are granted on the date of our annual meeting of shareholders and vest on the earlier of (i) the completion of the director’s 3-year term or (ii) the third anniversary of the date of grant. Restricted stock award grants are granted out of the Company’s 2017 Equity Compensation Plan. The Company may also award, out of the Company’s 2017 Equity Compensation Plan, stock to settle certain bonuses and other compensation that otherwise would be paid in cash. Any restrictions on these shares may be immediately lapsed on the grant date.

The following table presents a summary of the Company’s restricted stock grants outstanding at August 31, 2017, and restricted stock activity during the six months ended August 31, 2017 (“Price” reflects the weighted average share price at the date of grant):

	Awards	Price
Grants outstanding, beginning of period	196,706	$	4.64
Granted	346,462	2.87
Vested (restriction lapsed)	163,802	3.65
Grants outstanding, end of period	379,366	3.45

The total grant date fair value of shares vested during the six months ended August 31, 2016 and 2017, was $1.0 million and $0.6 million, respectively.

Recognized Non-Cash Compensation Expense

The following table summarizes stock-based compensation expense recognized by the Company during the three months and six months ended August 31, 2016 and 2017. The Company did not recognize any tax benefits related to stock-based compensation during the periods presented below.

	Three Months Ended August 31,				Six Months Ended August 31,
	2016		2017		2016		2017
Station operating expenses	$	197	$	177	$	534	$	326
Corporate expenses	463		530		982		1,070
Stock-based compensation expense included in operating expenses	$	660	$	707	$	1,516	$	1,396

As of August 31, 2017, there was $1.8 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based compensation arrangements. The cost is expected to be recognized over a weighted average period of approximately 1.3 years.

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Intangible Assets and Goodwill

6 Months Ended

Aug. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

Intangible Assets and Goodwill

Valuation of Indefinite-lived Broadcasting Licenses

In accordance with ASC Topic 350, Intangibles—Goodwill and Other, the Company’s Federal Communications Commission (“FCC”) licenses are considered indefinite-lived intangibles. These assets, which the Company determined were its only indefinite-lived intangibles, are not subject to amortization, but are tested for impairment at least annually as discussed below.

The carrying amounts of the Company’s FCC licenses were $197.7 million and $195.6 million as of February 28, 2017 and August 31, 2017, respectively. The decrease in the carrying amount of FCC licenses relates to our sale of KPWR-FM (see Note 10 for more discussion). Pursuant to Emmis’ accounting policy, stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA with another broadcaster. The Company generally performs its annual impairment test of indefinite-lived intangibles as of December 1 of each year. When indicators of impairment are present, the Company will perform an interim impairment test. During the six months ended August 31, 2017, no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. These impairment tests may result in impairment charges in future periods.

Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company uses an income valuation method when it performs its impairment tests. Under this method, the Company projects cash flows that would be generated by each of its units of accounting assuming the unit of accounting was commencing operations in its respective market at the beginning of the valuation period. This cash flow stream is discounted to arrive at a value for the FCC license. The Company assumes the competitive situation that exists in each market remains unchanged, with the exception that its unit of accounting commenced operations at the beginning of the valuation period. In doing so, the Company extracts the value of going concern and any other assets acquired, and strictly values the FCC license. Major assumptions involved in this analysis include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA.

Valuation of Goodwill

The carrying amounts of the Company's goodwill, all of which were attributable to our radio division, were $4.6 million as of February 28, 2017 and August 31, 2017. ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually. The Company conducts its impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. When assessing its goodwill for impairment, the Company generally uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units, with radio stations grouped by market. Management determines enterprise value for each of its reporting units by multiplying the two-year average station operating income generated by each reporting unit (current year based on actual results and the next year based on budgeted results) by an estimated market multiple. The Company uses a blended station operating income trading multiple of publicly traded radio operators as a benchmark for the multiple it applies to its radio reporting units. Management believes this methodology for valuing radio properties is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons and recent market transactions. To corroborate the fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit. If the carrying value of a reporting unit's goodwill exceeds its fair value, the Company recognizes an impairment charge equal to the difference in the statement of operations.

Definite-lived intangibles

As of August 31, 2017, the Company’s definite-lived intangible assets consist of trademarks and a syndicated programming contract, both of which are amortized over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. Trademarks related to KPWR-FM were sold during the three months ended August 31, 2017. See Note 10 for more discussion of the sale of KPWR-FM. The following table presents the weighted-average useful life, gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at February 28, 2017 and August 31, 2017:

		As of February 28, 2017						As of August 31, 2017
		(in 000's)
	Weighted Average Remaining Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks	7.8	$	696	$	545	$	151	$	397	$	318	$	79
Customer lists	N/A	315		289		26		—		—		—
Programming agreement	4.1	2,154		808		1,346		2,154		955		1,199
TOTAL		$	3,165	$	1,642	$	1,523	$	2,551	$	1,273	$	1,278

In accordance with Accounting Standards Codification paragraph 360-10, the Company performs an analysis to (i) determine if indicators of impairment of a long-lived asset are present, (ii) test the long-lived asset for recoverability by comparing undiscounted cash flows of the long-lived asset to its carrying value and (iii) measure any potential impairment by comparing the long-lived asset's fair value to its current carrying value.

Total amortization expense from definite-lived intangibles for the six-month periods ended August 31, 2016 and 2017 was $0.5 million and $0.1 million, respectively. The following table presents the Company's estimate of future amortization expense for definite-lived intangibles:

Year ended February 28 (29),	Expected Amortization Expense
	(in 000's)
Remainder of 2018	$	153
2019	304
2020	304
2021	304
2022	181
Thereafter	32
Total	$	1,278

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Long-term Debt

6 Months Ended

Aug. 31, 2017

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt

Long-term debt was comprised of the following at February 28, 2017 and August 31, 2017:

	February 28, 2017			August 31, 2017
2014 Credit Agreement debt :
Revolver	$	—		$	5,000
Term Loan	152,245			74,421
Total 2014 Credit Agreement debt	152,245			79,421
98.7FM non-recourse debt	59,958			57,008
Other non-recourse debt (1)	8,807			9,868
Less: Current maturities	(23,600		)	(16,367		)
Less: Unamortized original issue discount	(7,038		)	(4,686		)
Total long-term debt	$	190,372		$	125,244

⁽¹⁾ The face value of other non-recourse debt was $9.5 million and $10.2 million at February 28, 2017 and August 31, 2017, respectively

2014 Credit Agreement

On June 10, 2014, Emmis entered into the 2014 Credit Agreement, by and among the Company, EOC, as borrower (the “Borrower”), certain other subsidiaries of the Company, as guarantors (the “Subsidiary Guarantors”), the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and Fifth Third Bank, as syndication agent. Capitalized terms in this section not defined elsewhere in this 10-Q are defined in the 2014 Credit Agreement and related amendments.

The 2014 Credit Agreement includes a senior secured term loan facility (the “Term Loan”) of $185.0 million and a senior secured revolving credit facility of $20.0 million, and contains provisions for an uncommitted increase of up to $20.0 million principal amount (plus additional amounts so long as a pro forma total net senior secured leverage ratio condition is met) of the revolving credit facility and/or the Term Loan subject to the satisfaction of certain conditions. The revolving credit facility includes a sub-facility for the issuance of up to $5.0 million of letters of credit. Pursuant to the 2014 Credit Agreement, the Borrower borrowed $185.0 million of the Term Loan on June 10, 2014.

As a result of the Fourth Amendment to the 2014 Credit Agreement discussed below, the Term Loan is due not later than April 18, 2019 and the revolving credit facility expires on August 31, 2018. The Company no longer makes quarterly amortization payments related to the Term Loan as a result of repayments made in connection with the Company's sale of KPWR-FM. Subsequent to the Fourth Amendment to the 2014 Credit Agreement, 75 basis points per annum is payable quarterly on the average unused amount of the revolving credit facility. Prior to the amendments to the 2014 Credit Agreement discussed below, the Term Loan and amounts borrowed under the revolving credit facility bore interest, at the Borrower’s option, at either (i) the Alternate Base Rate (as defined in the 2014 Credit Agreement) (but not less than 2.00%) plus 3.75% or (ii) the Adjusted LIBO Rate (as defined in the 2014 Credit Agreement) (but not less than 1.00%) plus 4.75%.

The 2014 Credit Agreement is carried on our condensed consolidated balance sheets net of an original issue discount. The original issue discount, which was $5.1 million and $2.9 million as of February 28, 2017 and August 31, 2017, respectively, is being amortized as additional interest expense over the life of the 2014 Credit Agreement. In connection with the Term Loan repayment made during the three months ended August 31, 2017 as a result of the KPWR-FM sale, the Company wrote-off $2.5 million of the original issue discount which is recorded as loss on debt extinguishment in the accompanying condensed consolidated financial statements.

The obligations under the 2014 Credit Agreement are secured by a perfected first priority security interest in substantially all of the assets of the Company, the Borrower and the Subsidiary Guarantors.

On November 7, 2014, Emmis entered into the First Amendment to the 2014 Credit Agreement. The First Amendment (i) increased the maximum Total Leverage Ratio to 6.00:1.00 for the period February 28, 2015 through February 29, 2016, (ii) adjusted the definition of Consolidated EBITDA to exclude during the term of the 2014 Credit Agreement up to $5 million in severance and/or contract termination expenses and up to $2.5 million in losses attributable to the reformatting of the Company’s radio stations, (iii) extended the requirement for the Borrower to pay a 1.00% fee on certain prepayments of the Term Loan to November 7, 2015, (iv) increased the Applicable Margin by 0.25% for at least six months from the date of the First Amendment and until the Total Leverage Ratio is less than 5.00:1.00, and (v) made certain technical adjustments to the definition of Consolidated Excess Cash Flow and to address the Foreign Account Tax Compliance Act. Emmis paid a total of approximately $1.0 million of transaction fees to the Lenders that consented to the First Amendment, which were recorded as original issue discount and are being amortized over the remaining life of the 2014 Credit Agreement.

On April 30, 2015, Emmis entered into the Second Amendment to the 2014 Credit Agreement. The Second Amendment (i) increased the maximum Total Leverage Ratio to (A) 6.75:1.00 during the period from May 31, 2015 through February 29, 2016, (B) 6.50:1.00 for the quarter ended May 31, 2016, (C) 6.25:1.00 for the quarter ended August 31, 2016, (D) 6.00:1.00 for the quarter ended November 30, 2016, and (E) 5.75:1.00 for the quarter ended February 28, 2017, after which it reverted to the original ratio of 4.00:1.00 for the quarters ended May 31, 2017 and thereafter, (ii) required Emmis to pay a 2.00% fee on certain prepayments of the Term Loan prior to the first anniversary of the Second Amendment and required Emmis to pay a 1.00% fee on certain prepayments of the Term Loan from the first anniversary of the Second Amendment until the second anniversary of the Second Amendment, (iii) increased the Applicable Margin throughout the remainder of the term of the Credit Agreement to 5.00% for ABR Loans (as defined in the Credit Agreement) and 6.00% for Eurodollar Loans (as defined in the 2014 Credit Agreement), and (iv) increased the amortization to 0.50% per calendar quarter through January 1, 2016 and to 1.25% per calendar quarter thereafter commencing April 1, 2016. Emmis paid a total of approximately $1.1 million of transaction fees to the Lenders that consented to the Second Amendment, which were recorded as original issue discount and are being amortized over the remaining life of the 2014 Credit Agreement.

On August 22, 2016, Emmis entered into the Third Amendment to the 2014 Credit Agreement. The Third Amendment made certain changes to the Credit Agreement to facilitate the Company's consideration of and, if approved by the Company's Board of Directors and shareholders, entry into a transaction that would have resulted in the Class A common stock of the Company ceasing to be registered under the Securities Act of 1934 (such potential transaction, a "Going Private Transaction"). Specifically, the Third Amendment added an exception to the covenant restricting transactions with affiliates that (i) permitted the Company to enter into a Going Private Transaction with an affiliate of the Company and (ii) permitted the Borrower to pay any costs incurred or reimbursed by an affiliate of the Company in connection with a Going Private Transaction, whether or not the transaction was consummated. The Third Amendment also allowed the Company to add certain costs and expenses incurred in connection with a Going Private Transaction to Consolidated EBITDA, as defined in the Credit Agreement, for purposes of determining compliance with the financial covenants in the Credit Agreement, subject to caps of (i) $2.5 million if a Going Private Transaction was not recommended by a special committee of the Company’s Board of Directors and (ii) $8.0 million if a Going Private Transaction was recommended by a special committee of the Company’s Board of Directors but not consummated. Finally, the Third Amendment made certain changes to the Credit Agreement that would have been effective only if a Going Private Transaction was consummated. The Third Amendment also required the Borrower to pay a 50 basis point fee to the lenders that consented to it either if a Going Private Transaction was consummated or if such a transaction was recommended by a special committee of the board of directors of the Company but not consummated. The special committee of the board of directors did not recommend the Going Private Transaction and no such transaction was consummated.

On April 18, 2017, Emmis entered into a Fourth Amendment to our 2014 Credit Agreement. The Fourth Amendment (i) eliminated the maximum Total Leverage Ratio covenant through May 31, 2018 and replaced it with a minimum Consolidated EBITDA covenant, after which it reverts to a Total Leverage Ratio of 4.00:1.00 for the quarters ended August 31, 2018 and thereafter, (ii) reduced the Interest Coverage Ratio from 2.00:1.00 to 1.60:1.00, (iii) required Emmis to enter into definitive agreements by January 18, 2018 to sell assets that generate at least $80 million of sale proceeds and close such transactions no later than July 18, 2018, (iv) increased the Applicable Margin throughout the remainder of the term of the Credit Agreement to 6.00% for ABR Loans (as defined in the 2014 Credit Agreement) and 7.00% for Eurodollar Loans (as defined in the 2014 Credit Agreement) and increased the unused commitment fee on the revolving credit facility to 75 basis points, and (v) accelerated the maturity of the Term Loans to April 18, 2019 and the Revolving Loans to August 31, 2018. In addition to tightening or eliminating baskets and other credit enhancements for lenders, the Fourth Amendment contains ratcheting fees and premiums if the existing credit facility is not refinanced by July 18, 2018. The Fourth Amendment also required Emmis to pay a fee of 1.0% of the Term Loan holdings and Revolving Commitment of each Lender that consented to the Fourth Amendment. This fee totaled $1.5 million and was recorded as additional original issue discount and is being amortized as interest expense over the remaining life of the 2014 Credit Agreement, beginning in the three-month period ending May 31, 2017.

In connection with the closing of the sale of Texas Monthly on November 1, 2016, Emmis repaid $15.0 million of Term Loans and $8.5 million of Revolver borrowings. Under the terms of the 2014 Credit Agreement, Emmis was required to use all Net Available Proceeds (as defined in the 2014 Credit Agreement) from the sale of Texas Monthly to repay Term Loans unless it exercised its right under the 2014 Credit Agreement to reinvest a portion of the Net Available Proceeds in new long-term assets of the Company. On November 1, 2016, Emmis exercised this reinvestment right for up to $10.0 million of Net Available Proceeds. This election allows the Company to reduce the amount of Net Available Proceeds by amounts used to purchase assets within 365 days of the election, or 545 days of the election so long as the asset purchase is under contract within 365 days. Routine capital expenditures qualify as a reinvestment under the terms of the 2014 Credit Agreement. Future changes in these estimates will impact the calculation of Net Available Proceeds. The current calculation of Net Available Proceeds, reinvestments and Term Loan repayments related to the sale of Texas Monthly is as follows:

	Term Loan Repayments Texas Monthly Sale
Gross proceeds from the sale of Texas Monthly	$	25,000
Working capital and other closing adjustments	(747		)
Transaction costs, including severance	(1,378		)
Subtotal	22,875
Less: Reinvestments (estimated)	(3,475		)
Less: Term Loan repayment on November 1, 2016	(15,000		)
Remaining Net Available Proceeds, subject to finalization of reinvestments	$	4,400

The current estimate of $4.4 million of remaining net available proceeds is included as a current maturity of long-term debt in the accompanying condensed consolidated balance sheets as of August 31, 2017. The amount is not yet final as reinvestments are estimated and could change prior to the conclusion of the reinvestment period as described above.

We were in compliance with all financial and non-financial covenants as of August 31, 2017. Our Minimum Consolidated EBITDA and Interest Coverage Ratio (each as defined in the 2014 Credit Agreement and related amendments) requirements and actual amounts as of August 31, 2017 were as follows:

	As of August 31, 2017
	Covenant Requirement			Actual Results
Minimum Consolidated EBITDA	$	13.6	million	$	17.5	million
Minimum Interest Coverage Ratio	1.60 : 1.00			2.59 : 1.00

98.7FM Non-recourse Debt

On May 30, 2012, the Company, through wholly-owned, newly-created subsidiaries, issued $82.2 million of non-recourse notes. Teachers Insurance and Annuity Association of America, through a participation agreement with Wells Fargo Bank Northwest, National Association, is entitled to receive payments made on the notes. The notes are obligations only of the newly-created subsidiaries, are non-recourse to the rest of the Company and its subsidiaries, and are secured by the assets of the newly-created subsidiaries, including the payments made to the newly-created subsidiary related to the 98.7FM LMA, which are guaranteed by Disney Enterprises, Inc. The notes bear interest at 4.1%. The 98.7FM non-recourse notes are carried on our condensed consolidated balance sheets net of an original issue discount. The original issue discount, which was $2.0 million and $1.8 million as of February 28, 2017 and August 31, 2017, respectively, is being amortized as additional interest expense over the life of the notes.

Other Non-recourse Debt

Digonex non-recourse notes payable consist of notes payable issued by Digonex, which were recorded at fair value on June 16, 2014, the date that Emmis acquired a controlling interest in Digonex. The notes payable, some of which are secured by the assets of Digonex, are non-recourse to the rest of the Company and its subsidiaries. During the quarter ended August 31, 2017, Digonex noteholders agreed to extend the maturity date of the notes from December 31, 2017 to December 31, 2020. The notes accrue interest at 5.0% per annum with interest due at maturity. The face value of the notes payable is $6.2 million. The Company is accreting the difference between this face value and the original $3.6 million fair value of the notes payable recorded in the acquisition of its controlling interest of the business as interest expense over the remaining term of the notes payable.

During the quarter ended May 31, 2017, NextRadio, LLC issued $0.7 million of notes payable, bringing the cumulative total of notes payable issued by NextRadio, LLC to $4.0 million. The notes initially bear interest at 4.0% with interest due quarterly beginning in August 2018. The notes mature on December 23, 2021 and are to be repaid through revenues generated by enhanced advertisement revenues earned by NextRadio, LLC. If any portion of the notes remain unpaid at maturity, the lender has the option to exchange the notes for senior preferred equity of NextRadio, LLC's parent entity, TagStation, LLC. These notes are obligations of NextRadio, LLC and TagStation, LLC and are non-recourse to the rest of Emmis' subsidiaries.

Based on amounts outstanding at August 31, 2017, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below:

	2014 Credit Agreement				98.7FM Non-recourse		Other Non-recourse
Year ended February 28 (29),	Revolver		Term Loan		Debt		Debt		Total Payments
Remainder of 2018	$	—	$	4,400	$	3,089	$	—	$	7,489
2019	5,000		—		6,587		—		11,587
2020	—		70,021		7,150		—		77,171
2021	—		—		7,755		6,239		13,994
2022	—		—		8,394		4,000		12,394
Thereafter	—		—		24,033		—		24,033
Total	$	5,000	$	74,421	$	57,008	$	10,239	$	146,668

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Liquidity and Going Concern

6 Months Ended

Aug. 31, 2017

Debt Disclosure [Abstract]

Liquidity

Liquidity and Going Concern

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The Company adopted ASU 2014-15 during the year ended February 28, 2017. Subsequent to adoption, the Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period, including interim periods.

In evaluating the Company’s ability to continue as a going concern, management evaluated the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the interim financial statements were issued (October 12, 2017). Management considered the Company’s current projections of future cash flows, current financial condition, sources of liquidity and debt obligations due on or before October 12, 2018.

As of August 31, 2017, the Company classified its $5.0 million revolver debt as current because the revolver expires on August 31, 2018. The Company also classified $4.4 million of Term Loan debt associated with the proceeds received from the sale of Texas Monthly as current because it is due during the quarter ending November 30, 2017. The Company also expects to pay approximately $6.5 million of cash interest obligations related to our 2014 Credit Agreement and $3.2 million of income taxes to various tax jurisdictions prior to October 12, 2018. The Company’s current projections indicate that forecasted cash flows may be insufficient for the Company to settle all of these obligations in full and continue without a revolver subsequent to August 31, 2018.

Management is currently exploring a number of options that would allow the Company to meet all of the aforementioned obligations. Management believes that it is probable that it will refinance the debt outstanding under the 2014 Credit Agreement prior to August 31, 2018. The Company has successfully refinanced its credit agreement debt many times in the past. Recent asset sales and associated term loan repayments have significantly reduced the Company’s leverage ratio, which management believes will enhance its ability to refinance the debt. Management is also exploring several alternatives that would further reduce our leverage ratio, including the sale of WLIB-AM in New York City. While management does not believe the sale of this or any other asset is required to complete a refinancing, management believes it would likely improve the economics of a refinancing for the Company.

Management's intention and belief that the credit agreement debt will be refinanced during the next twelve months assumes, among other things, that the Company will continue to be successful in implementing its business strategy and that there will be no material adverse developments in its business, liquidity or capital requirements. If one or more of these factors do not occur as expected, it could cause a default under the Company's credit agreement.

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Fair Value Measurements

6 Months Ended

Aug. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

Recurring Fair Value Measurements

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of February 28, 2017 and August 31, 2017. The financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

	As of August 31, 2017
	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs		Total
	(in 000's)
Available for sale securities	$	—	$	—	$	800	$	800
Total assets measured at fair value on a recurring basis	$	—	$	—	$	800	$	800
	As of February 28, 2017
	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs		Total
	(in 000's)
Available for sale securities	$	—	$	—	$	800	$	800
Total assets measured at fair value on a recurring basis	$	—	$	—	$	800	$	800

Available for sale securities — Emmis’ available for sale securities are comprised of preferred stock of a private company that is not traded in active markets and is included in other assets, net in the accompanying condensed consolidated balance sheets. The investment is recorded at fair value, which was generally estimated using significant unobservable market parameters, resulting in a level 3 categorization. The carrying value of our preferred stock investment was determined by using implied valuations of recent rounds of financing and by other corroborating evidence, which may include the application of various valuation methodologies including option-pricing and discounted cash flow based models.

Non-Recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis under circumstances and events that include those described in Note 3, Intangible Assets and Goodwill, and are adjusted to fair value only when the carrying values are more than the fair values. The categorization of the framework used to price the assets is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value (see Note 3 for more discussion).

Fair Value of Other Financial Instruments

Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition.

The estimated fair value of financial instruments is determined using the best available market information and appropriate valuation methodologies. Considerable judgment is necessary, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition. The use of different market assumptions may have a material effect on the estimated fair value amounts.

The following methods and assumptions were used to estimate the fair value of financial instruments:

- Cash and cash equivalents: The carrying amount of these assets approximates fair value because of the short maturity of these instruments.

- 2014 Credit Agreement debt: As of August 31, 2017, the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $76.8 million and $79.4 million, respectively. The Company's estimate of fair value was based on quoted prices of this instrument and is considered a Level 2 measurement.

- Other long-term debt: The Company’s 98.7FM non-recourse debt and other non-recourse debt is not actively traded and is considered a level 3 measurement. The Company believes the current carrying value of its other long-term debt approximates its fair value.

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Segment Information

6 Months Ended

Aug. 31, 2017

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company’s operations have historically been aligned into three business segments: (i) Radio, (ii) Publishing and (iii) Corporate & Emerging Technologies. Emerging Technologies includes our TagStation, NextRadio and Digonex businesses. These business segments are consistent with the Company’s management of these businesses and its financial reporting structure. Corporate expenses are not allocated to reportable segments. The Company’s segments operate exclusively in the United States.

The accounting policies as described in the summary of significant accounting policies included in the Company’s Annual Report filed on Form 10-K for the year ended February 28, 2017, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments.

Three Months Ended August 31, 2017	Radio			Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	41,764		$	846		$	238		$	42,848
Station operating expenses excluding and depreciation and amortization expense	29,881			1,104			2,919			33,904
Corporate expenses excluding depreciation and amortization expense	—			—			2,538			2,538
Depreciation and amortization	676			5			200			881
Gain on sale of assets, net of disposition costs	(76,745		)	39			—			(76,706		)
Loss on disposal of property and equipment	—			12			—			12
Operating income (loss)	$	87,952		$	(314	)	$	(5,419	)	$	82,219

Three Months Ended August 31, 2016	Radio		Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	45,972	$	12,619		$	183		$	58,774
Station operating expenses excluding LMA fees and depreciation and amortization expense	31,661		12,959			2,371			46,991
Corporate expenses excluding depreciation and amortization expense	—		—			2,453			2,453
Impairment loss on intangible assets	—		—			2,988			2,988
Depreciation and amortization	881		69			332			1,282
Loss on disposal of fixed assets	125		—			—			125
Operating income (loss)	$	13,305	$	(409	)	$	(7,961	)	$	4,935

Six Months Ended August 31, 2017	Radio			Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	80,470		$	1,990		$	552		$	83,012
Station operating expenses excluding depreciation and amortization expense	56,015			2,459			6,660			65,134
Corporate expenses excluding depreciation and amortization expense	—			—			5,281			5,281
Depreciation and amortization	1,444			10			405			1,859
Gain on sale of assets, net of disposition costs	(76,745		)	39			—			(76,706		)
Loss on disposal of property and equipment	—			12			—			12
Operating income (loss)	$	99,756		$	(530	)	$	(11,794	)	$	87,432

Six Months Ended August 31, 2016	Radio		Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	88,671	$	25,711		$	394		$	114,776
Station operating expenses excluding depreciation and amortization expense	58,936		26,437			4,607			89,980
Corporate expenses excluding depreciation and amortization expense	—		—			5,497			5,497
Impairment loss	—		—			2,988			2,988
Depreciation and amortization	1,788		142			684			2,614
Loss on disposal of property and equipment	125		—			—			125
Operating income (loss)	$	27,822	$	(868	)	$	(13,382	)	$	13,572

Total Assets	Radio		Publishing		Corporate & Emerging Technologies		Consolidated
As of February 28, 2017	$	260,228	$	1,746	$	27,364	$	289,338
As of August 31, 2017	$	258,162	$	697	$	18,417	$	277,276

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Regulatory, Legal and Other Matters

6 Months Ended

Aug. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Regulatory, Legal and Other Matters

Regulatory, Legal and Other Matters

During the quarter ended August 31, 2017, Emmis filed suit against Hour Media Group, LLC ("Hour") for breach of the asset purchase agreement related to the February 28, 2017 sale of Los Angeles Magazine, Atlanta Magazine, Cincinnati Magazine and Orange Coast Magazine. Hour filed a counterclaim against Emmis alleging that Emmis engaged in a series of actions that constitute a breach of the asset purchase agreement. Emmis believes that Hour's claims are without merit and is vigorously defending this lawsuit. Approximately $0.65 million of the purchase price related to this sale remains in escrow and is likely to remain in escrow until this matter is resolved. This cash is included in restricted cash on our condensed consolidated balance sheets as of August 31, 2017.

Emmis is a party to various other legal proceedings arising in the ordinary course of business. In the opinion of management of the company, however, there are no legal proceedings pending against the Company that we believe are likely to have a material adverse effect on the Company.

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Income Taxes

6 Months Ended

Aug. 31, 2017

Income Taxes [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

Our effective income tax rate was 31% and 6% for the six-month periods ended August 31, 2016 and 2017, respectively. In the prior year, the Company recorded a valuation allowance for its net deferred tax assets generated during the period, including its net operating loss carryforwards, but excluding deferred tax liabilities related to indefinite-lived intangibles. Given the sale of KPWR-FM as discussed in Note 10 and the gain that resulted from the transaction, the Company is estimating its effective tax rate for the fiscal year, which incorporates the reversal of a portion of the valuation allowance, and applying that rate to the pre-tax income for the applicable period, which is primarily responsible for the difference between the statutory rate and the effective tax rate.

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Significant Events

6 Months Ended

Aug. 31, 2017

Significant Events [Abstract]

Other Significant Transactions [Text Block]

Other Significant Events

Sale of KPWR-FM

On August 1, 2017, Emmis closed on its sale of KPWR-FM for gross proceeds of approximately $80.1 million in cash to affiliates of the Meruelo Group. After payment of transaction costs and withholding for estimated tax obligations, net proceeds as defined in the 2014 Credit Agreement totaled approximately $73.6 million and were used to repay term loan indebtedness. As discussed in Note 4, under the terms of the Fourth Amendment to the 2014 Credit Facility, Emmis was required to enter into definitive agreements to sell assets that generated at least $80 million of proceeds by January 18, 2018 and to close on such transactions following receipt of required regulatory approvals. The sale of KPWR-FM satisfied these requirements. Emmis found it more advantageous to sell its standalone radio station in Los Angeles than to sell other assets to meet this requirement.

KPWR-FM was operated pursuant to an LMA from July 1, 2017 through the closing of the sale on August 1, 2017. Affiliates of the Meruelo Group paid an LMA fee to Emmis totaling $0.4 million during this period, which is included in net revenues in the accompanying condensed consolidated statements of operations and in the summary of KPWR-FM results included below.

KPWR-FMhad historically been included in our Radio segment. The following table summarizes certain operating results of KPWR-FM for all periods presented. Pursuant to Accounting Standards Codification 205-20-45-6, interest expense associated with the required Term Loan repayment associated with the sale of KPWR-FM is included in the results below. The sale of KPWR-FM did not qualify for reporting as a discontinued operation as it did not represent a strategic shift for the Company as described in Accounting Standards Codification 205-20-45.

	For the three months ended August 31,					For the six months ended August 31,
	2016		2017			2016		2017
Net revenues	$	6,709	$	2,399		$	13,385	$	7,818
Station operating expenses, excluding depreciation and amortization expense	4,356		2,590			8,729		6,928
Depreciation and amortization	103		—			207		63
Gain on sale of assets, net of disposition costs	—		(76,745		)	—		(76,745		)
Operating income	2,250		76,554			4,449		77,572
Interest expense	1,317		1,055			2,633		2,494
Income before income taxes	933		75,499			1,816		75,078

Unaudited pro forma summary information is presented below for the three-month and six-month periods ended August 31, 2016 and 2017, assuming the November 1, 2016 sale of Texas Monthly, the January 30, 2017 sale of our radio stations in Terre Haute, the February 28, 2017 sale of Los Angeles Magazine, Atlanta Magazine, Cincinnati Magazine and Orange Coast Magazine, the August 1, 2017 sale of KPWR-FM,and therelated mandatory debt repayments of these sales had occurred on the first day of the proforma periods presented below. See Note 7 of our 10-K for the year ending February 28, 2017 for more discussion of the various sales completed during our prior fiscal year.

	For the three months ended August 31, (unaudited)					For the six months ended August 31, (unaudited)
	2016			2017		2016		2017
Net revenues	$	39,856		$	40,451	$	76,686	$	75,201
Station operating expenses, excluding depreciation and amortization expense	30,316			31,275		56,348		58,113
Consolidated net (loss) income	(41		)	1,335		2,119		1,948
Net income attributable to the Company	692			527		2,223		301
Net income per share - basic	$	0.06		$	0.04	$	0.19	$	0.02
Net income per share - diluted	$	0.06		$	0.04	$	0.18	$	0.02

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Aug. 31, 2017

Accounting Policies [Abstract]

Preparation of Interim Financial Statements

Preparation of Interim Financial Statements

Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), the condensed consolidated interim financial statements included herein have been prepared, without audit, by Emmis Communications Corporation (“ECC”) and its subsidiaries (collectively, “our,” “us,” “we,” “Emmis” or the “Company”). As permitted under the applicable rules and regulations of the SEC, certain information and footnote disclosures normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations; however, Emmis believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Emmis filed on Form 10-K for the year ended February 28, 2017. The Company’s results are subject to seasonal fluctuations. Therefore, results shown on an interim basis are not necessarily indicative of results for a full year.

In the opinion of Emmis, the accompanying condensed consolidated interim financial statements contain all material adjustments (consisting only of normal recurring adjustments, except as otherwise noted) necessary to present fairly the consolidated financial position of Emmis at August 31, 2017, the results of its operations for the three-month and six-month periods ended August 31, 2016 and 2017, and cash flows for the six-month periods ended August 31, 2016 and 2017.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended February 28, 2017 that have had a material impact on our condensed consolidated financial statements and related notes.

Basic and Diluted Net (Loss) Income Per Common Share

Basic and Diluted Net Income Per Common Share

Basic net income per common share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted net income per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Potentially dilutive securities at August 31, 2016 and 2017 consisted of stock options and restricted stock awards.

Local Programming and Marketing Agreement Fees

Local Programming and Marketing Agreement Fees

The Company from time to time enters into local programming and marketing agreements (“LMAs”), often pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses in connection with acquisitions or dispositions of radio stations. Under the terms of these agreements, the acquiring company makes specified periodic payments to the holder of the FCC license in exchange for the right to program and sell advertising for a specified portion of the station’s inventory of broadcast time. The acquiring 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.

On May 8, 2017, Emmis and an affiliate of the Meruelo Group (the "Meruelo Group") entered into an LMA and asset purchase agreement related to KPWR-FM in Los Angeles. This LMA started on July 1, 2017 and terminated with the consummation of the sale of KPWR-FM on August 1, 2017. Emmis recognized $0.4 million of LMA fee revenue as a component of net revenues in our accompanying condensed consolidated statements of operations related to this LMA. See Note 10 for more discussion of our sale of KPWR-FM to the Meruelo Group.

On April 26, 2012, Emmis entered into an LMA with a subsidiary of Disney Enterprises, Inc. for 98.7FM in New York (formerly WRKS-FM and now WEPN-FM, hereinafter referred to as “98.7FM”). The LMA for this station started on April 30, 2012 and will continue until August 31, 2024. Emmis retains ownership and control of the station, including the related FCC license during the term of the LMA and is scheduled to receive an annual fee until the LMA’s termination. LMA fee revenue is recorded on a straight-line basis over the term of the LMA as a component of net revenues in our accompanying condensed consolidated statements of operations.

Restricted Cash

Restricted Cash

As of August 31, 2017, restricted cash relates to cash on deposit in trust accounts related to our 98.7FM LMA in New York City that services long-term debt and cash held in escrow as part of our sale of four magazines in February 2017.

Valuation of Indefinite-lived Broadcasting Licenses

Valuation of Indefinite-lived Broadcasting Licenses

In accordance with ASC Topic 350, Intangibles—Goodwill and Other, the Company’s Federal Communications Commission (“FCC”) licenses are considered indefinite-lived intangibles. These assets, which the Company determined were its only indefinite-lived intangibles, are not subject to amortization, but are tested for impairment at least annually as discussed below.

The carrying amounts of the Company’s FCC licenses were $197.7 million and $195.6 million as of February 28, 2017 and August 31, 2017, respectively. The decrease in the carrying amount of FCC licenses relates to our sale of KPWR-FM (see Note 10 for more discussion). Pursuant to Emmis’ accounting policy, stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA with another broadcaster. The Company generally performs its annual impairment test of indefinite-lived intangibles as of December 1 of each year. When indicators of impairment are present, the Company will perform an interim impairment test. During the six months ended August 31, 2017, no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. These impairment tests may result in impairment charges in future periods.

Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company uses an income valuation method when it performs its impairment tests. Under this method, the Company projects cash flows that would be generated by each of its units of accounting assuming the unit of accounting was commencing operations in its respective market at the beginning of the valuation period. This cash flow stream is discounted to arrive at a value for the FCC license. The Company assumes the competitive situation that exists in each market remains unchanged, with the exception that its unit of accounting commenced operations at the beginning of the valuation period. In doing so, the Company extracts the value of going concern and any other assets acquired, and strictly values the FCC license. Major assumptions involved in this analysis include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate. Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under an LMA.

Valuation of Goodwill

Valuation of Goodwill

The carrying amounts of the Company's goodwill, all of which were attributable to our radio division, were $4.6 million as of February 28, 2017 and August 31, 2017. ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually. The Company conducts its impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. When assessing its goodwill for impairment, the Company generally uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units, with radio stations grouped by market. Management determines enterprise value for each of its reporting units by multiplying the two-year average station operating income generated by each reporting unit (current year based on actual results and the next year based on budgeted results) by an estimated market multiple. The Company uses a blended station operating income trading multiple of publicly traded radio operators as a benchmark for the multiple it applies to its radio reporting units. Management believes this methodology for valuing radio properties is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons and recent market transactions. To corroborate the fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit. If the carrying value of a reporting unit's goodwill exceeds its fair value, the Company recognizes an impairment charge equal to the difference in the statement of operations.

Definite-lived intangibles

Definite-lived intangibles

As of August 31, 2017, the Company’s definite-lived intangible assets consist of trademarks and a syndicated programming contract, both of which are amortized over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows.

Fair Value Measurements and Disclosure

As defined in ASC Topic 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

Recurring Fair Value Measurements

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of February 28, 2017 and August 31, 2017. The financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

Available for sale securities — Emmis’ available for sale securities are comprised of preferred stock of a private company that is not traded in active markets and is included in other assets, net in the accompanying condensed consolidated balance sheets. The investment is recorded at fair value, which was generally estimated using significant unobservable market parameters, resulting in a level 3 categorization. The carrying value of our preferred stock investment was determined by using implied valuations of recent rounds of financing and by other corroborating evidence, which may include the application of various valuation methodologies including option-pricing and discounted cash flow based models.

Non-Recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis under circumstances and events that include those described in Note 3, Intangible Assets and Goodwill, and are adjusted to fair value only when the carrying values are more than the fair values. The categorization of the framework used to price the assets is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value (see Note 3 for more discussion).

Fair Value of Other Financial Instruments

Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. Assets and liabilities acquired in business combinations are recorded at their fair value as of the date of acquisition.

The estimated fair value of financial instruments is determined using the best available market information and appropriate valuation methodologies. Considerable judgment is necessary, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition. The use of different market assumptions may have a material effect on the estimated fair value amounts.

The following methods and assumptions were used to estimate the fair value of financial instruments:

- Cash and cash equivalents: The carrying amount of these assets approximates fair value because of the short maturity of these instruments.

- 2014 Credit Agreement debt: As of August 31, 2017, the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $76.8 million and $79.4 million, respectively. The Company's estimate of fair value was based on quoted prices of this instrument and is considered a Level 2 measurement.

- Other long-term debt: The Company’s 98.7FM non-recourse debt and other non-recourse debt is not actively traded and is considered a level 3 measurement. The Company believes the current carrying value of its other long-term debt approximates its fair value.

New Accounting Pronouncements

Recent Accounting Pronouncements

In January 2017, the FASB issued Accounting Standards Update 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. This ASU was issued to simplify goodwill impairment by removing the second step of the goodwill impairment test. The Company early adopted this guidance as of March 1, 2017. The adoption of this guidance had no immediate impact on the Company's financial statements, but it could affect future goodwill impairment analysis.

In January 2017, the FASB issued Accounting Standards Update 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This ASU was issued to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance will be effective for the Company as of March 1, 2018. The Company does not expect adoption of this guidance will have a material impact on the Company's consolidated financial statements.

In November 2016, the FASB issued Accounting Standards Update 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance will be effective for the Company as of March 1, 2018, and requires a retrospective transition method. The Company does not expect adoption of this guidance will have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases (Topic 842). This update requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases of greater than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance will be effective for the Company as of March 1, 2019. A modified retrospective transition method is required. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements.

In May 2014, the FASB issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), to clarify the principles used to recognize revenue for all entities. The FASB deferred implementation of this guidance by one year with the issuance of Accounting Standards Update 2015-14. As such, this guidance will be effective for the Company as of March 1, 2018. The Company expects to use the modified retrospective method of adoption. The Company has completed its initial evaluation of potential changes from adopting the new standard on its financial reporting and disclosures, which included a detailed review of contractual terms for all of its significant revenue streams. The Company will complete its implementation plan during in the remainder of fiscal 2018. Based on its initial evaluation, the Company does not expect adoption of this guidance will have a material impact on the Company's consolidated financial statements, but disclosures related to revenue recognition will likely be expanded.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Aug. 31, 2017

Accounting Policies [Abstract]

Calculation of Basic and Diluted Net (loss) Income Per Share from Continuing Operations

The following table sets forth the calculation of basic and diluted net income per share:

	For the three months ended
	August 31, 2016					August 31, 2017
	Net Income		Shares	Net Income Per Share		Net Income		Shares	Net Income Per Share
	(amounts in 000’s, except per share data)
Basic net income per common share:
Net income available to common shareholders	$	335	12,047	$	0.03	$	69,957	12,292	$	5.69
Impact of equity awards	—		252			—		221
Diluted net income per common share:
Net income available to common shareholders	$	335	12,299	$	0.03	$	69,957	12,513	$	5.59

	For the six months ended
	August 31, 2016					August 31, 2017
	Net Income		Shares	Net Income Per Share		Net Income		Shares	Net Income Per Share
	(amounts in 000’s, except per share data)
Basic net income per common share:
Net income available to common shareholders	$	3,021	11,922	$	0.25	$	69,690	12,287	$	5.67
Impact of equity awards	—		121	—		—		176	—
Diluted net income per common share:
Net income available to common shareholders	$	3,021	12,043	$	0.25	$	69,690	12,463	$	5.59

Shares Excluded from Calculation as Effect of Conversion into Shares of Common Stock would be Antidilutive

Shares excluded from the calculation as the effect of their conversion into shares of our common stock would be antidilutive were as follows:

	For the three months ended August 31,		For the six months ended August 31,
	2016	2017	2016	2017
	(shares in 000’s )
Equity awards	1,340	1,960	1,491	2,276
Antidilutive common share equivalents	1,340	1,960	1,491	2,276

Schedule Of Operating Results From Local Programming and Marketing Agreements

The following table summarizes certain operating results of 98.7FM for all periods presented. Net revenues for 98.7FM are solely related to LMA fees. 98.7FM is a part of our radio segment.

	For the three months ended August 31,				For the six months ended August 31,
	2016		2017		2016		2017
	(amounts in 000's)
Net revenues	$	2,583	$	2,583	$	5,166	$	5,166
Station operating expenses, excluding depreciation and amortization expense	363		296		614		589
Interest expense	715		656		1,443		1,328

Schedule Of Assets And Liabilities Of Local Programming and Marketing Agreements

Assets and liabilities of 98.7FM as of February 28, 2017 and August 31, 2017 were as follows:

	As of February 28,		As of August 31,
	2017		2017
	(amounts in 000's)
Current assets:
Restricted cash	$	1,550	$	1,511
Prepaid expenses	445		481
Other current assets	7		13
Total current assets	2,002		2,005
Noncurrent assets:
Property and equipment, net	229		274
Indefinite lived intangibles	46,390		46,390
Deposits and other	6,205		6,406
Total noncurrent assets	52,824		53,070
Total assets	$	54,826	$	55,075
Current liabilities:
Accounts payable and accrued expenses	$	54	$	22
Current maturities of long-term debt	6,039		6,317
Deferred revenue	807		835
Other current liabilities	205		195
Total current liabilities	7,105		7,369
Noncurrent liabilities:
Long-term debt, net of current portion and unamortized debt discount	51,954		48,859
Total noncurrent liabilities	51,954		48,859
Total liabilities	$	59,059	$	56,228

Restrictions on Cash and Cash Equivalents

The table below summarizes restricted cash held by the Company as of February 28, 2017 and August 31, 2017:

	As of February 28,		As of August 31,
	2017		2017
98.7FM LMA restricted cash	$	1,550	$	1,511
NextRadio LLC restricted cash	123		—
Cash held in escrow from sale of magazines restricted cash	650		650
Total restricted cash	$	2,323	$	2,161

Noncontrolling Interest

Below is a summary of the noncontrolling interest activity for the six months ended August 31, 2016 and 2017:

	Austin radio partnership			Digonex			Total noncontrolling interests
Balance, February 29, 2016	$	47,556		$	(9,159	)	$	38,397
Net income (loss)	3,048			(3,152		)	(104		)
Distributions to noncontrolling interests	(2,074		)	—			(2,074		)
Balance, August 31, 2016	$	48,530		$	(12,311	)	$	36,219
Balance, February 28, 2017	$	46,830		$	(13,909	)	$	32,921
Net income (loss)	3,151			(1,504		)	1,647
Distributions to noncontrolling interests	(2,254		)	—			(2,254		)
Balance, August 31, 2017	$	47,727		$	(15,413	)	$	32,314

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Share Based Payments (Tables)

6 Months Ended

Aug. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Assumptions used to Calculate Fair Value of Options on Date of Grant

The following assumptions were used to calculate the fair value of the Company’s options on the date of grant during the six months ended August 31, 2016 and 2017:

	Six Months Ended August 31,
	2016	2017
Risk-Free Interest Rate:	0.9% - 1.2%	1.7% - 1.9%
Expected Dividend Yield:	0%	0%
Expected Life (Years):	4.3	4.4
Expected Volatility:	58.6% - 60.0%	52.9% - 53.6%

Summary of Stock Options Outstanding and Activity

The following table presents a summary of the Company’s stock options outstanding at August 31, 2017, and stock option activity during the six months ended August 31, 2017 (“Price” reflects the weighted average exercise price per share; "Aggregate Intrinsic Value" dollars in thousands):

	Options	Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding, beginning of period	2,559,643	$	5.17
Granted	331,250	2.77
Exercised	27,250	2.25
Forfeited	8,331	2.29
Expired	74,815	14.15
Outstanding, end of period	2,780,497	4.68		6.9	$	277
Exercisable, end of period	1,512,093	5.47		5.1	$	215

Summary of Nonvested Options and Changes

A summary of the Company’s nonvested options at August 31, 2017, and changes during the six months ended August 31, 2017, is presented below:

	Options	Weighted Average Grant Date Fair Value
Nonvested, beginning of period	1,090,375	$	2.26
Granted	331,250	1.24
Vested	144,890	4.26
Forfeited	8,331	1.10
Nonvested, end of period	1,268,404	1.77

Summary of Restricted Stock Grants Outstanding and Activity

The following table presents a summary of the Company’s restricted stock grants outstanding at August 31, 2017, and restricted stock activity during the six months ended August 31, 2017 (“Price” reflects the weighted average share price at the date of grant):

	Awards	Price
Grants outstanding, beginning of period	196,706	$	4.64
Granted	346,462	2.87
Vested (restriction lapsed)	163,802	3.65
Grants outstanding, end of period	379,366	3.45

Stock-Based Compensation Expense and Related Tax Benefits Recognized

The following table summarizes stock-based compensation expense recognized by the Company during the three months and six months ended August 31, 2016 and 2017. The Company did not recognize any tax benefits related to stock-based compensation during the periods presented below.

	Three Months Ended August 31,				Six Months Ended August 31,
	2016		2017		2016		2017
Station operating expenses	$	197	$	177	$	534	$	326
Corporate expenses	463		530		982		1,070
Stock-based compensation expense included in operating expenses	$	660	$	707	$	1,516	$	1,396

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Definite-lived Intangibles (Tables)

6 Months Ended

Aug. 31, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets [Table Text Block]

The following table presents the weighted-average useful life, gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at February 28, 2017 and August 31, 2017:

		As of February 28, 2017						As of August 31, 2017
		(in 000's)
	Weighted Average Remaining Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks	7.8	$	696	$	545	$	151	$	397	$	318	$	79
Customer lists	N/A	315		289		26		—		—		—
Programming agreement	4.1	2,154		808		1,346		2,154		955		1,199
TOTAL		$	3,165	$	1,642	$	1,523	$	2,551	$	1,273	$	1,278

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

The following table presents the Company's estimate of future amortization expense for definite-lived intangibles:

Year ended February 28 (29),	Expected Amortization Expense
	(in 000's)
Remainder of 2018	$	153
2019	304
2020	304
2021	304
2022	181
Thereafter	32
Total	$	1,278

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Long-term Debt (Tables)

6 Months Ended

Aug. 31, 2017

Debt Instrument

Schedule of Debt [Table Text Block]

The current calculation of Net Available Proceeds, reinvestments and Term Loan repayments related to the sale of Texas Monthly is as follows:

	Term Loan Repayments Texas Monthly Sale
Gross proceeds from the sale of Texas Monthly	$	25,000
Working capital and other closing adjustments	(747		)
Transaction costs, including severance	(1,378		)
Subtotal	22,875
Less: Reinvestments (estimated)	(3,475		)
Less: Term Loan repayment on November 1, 2016	(15,000		)
Remaining Net Available Proceeds, subject to finalization of reinvestments	$	4,400

Schedule of Long-term Debt Instruments

Long-term debt was comprised of the following at February 28, 2017 and August 31, 2017:

	February 28, 2017			August 31, 2017
2014 Credit Agreement debt :
Revolver	$	—		$	5,000
Term Loan	152,245			74,421
Total 2014 Credit Agreement debt	152,245			79,421
98.7FM non-recourse debt	59,958			57,008
Other non-recourse debt (1)	8,807			9,868
Less: Current maturities	(23,600		)	(16,367		)
Less: Unamortized original issue discount	(7,038		)	(4,686		)
Total long-term debt	$	190,372		$	125,244

Schedule Of Financial Covenants

Our Minimum Consolidated EBITDA and Interest Coverage Ratio (each as defined in the 2014 Credit Agreement and related amendments) requirements and actual amounts as of August 31, 2017 were as follows:

	As of August 31, 2017
	Covenant Requirement			Actual Results
Minimum Consolidated EBITDA	$	13.6	million	$	17.5	million
Minimum Interest Coverage Ratio	1.60 : 1.00			2.59 : 1.00

Schedule of Maturities of Long-term Debt

Based on amounts outstanding at August 31, 2017, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below:

	2014 Credit Agreement				98.7FM Non-recourse		Other Non-recourse
Year ended February 28 (29),	Revolver		Term Loan		Debt		Debt		Total Payments
Remainder of 2018	$	—	$	4,400	$	3,089	$	—	$	7,489
2019	5,000		—		6,587		—		11,587
2020	—		70,021		7,150		—		77,171
2021	—		—		7,755		6,239		13,994
2022	—		—		8,394		4,000		12,394
Thereafter	—		—		24,033		—		24,033
Total	$	5,000	$	74,421	$	57,008	$	10,239	$	146,668

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Fair Value Measurements (Tables)

6 Months Ended

Aug. 31, 2017

Fair Value Disclosures [Abstract]

Assets and Liabilities Accounted for at Fair Value on Recurring Basis

The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of fair value assets and liabilities and their placement within the fair value hierarchy levels.

	As of August 31, 2017
	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs		Total
	(in 000's)
Available for sale securities	$	—	$	—	$	800	$	800
Total assets measured at fair value on a recurring basis	$	—	$	—	$	800	$	800
	As of February 28, 2017
	Level 1		Level 2		Level 3
	Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs		Total
	(in 000's)
Available for sale securities	$	—	$	—	$	800	$	800
Total assets measured at fair value on a recurring basis	$	—	$	—	$	800	$	800

Reconciliation of Beginning and Ending Balances for Fair Value Measurements using Significant Unobservable Inputs

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Segment Information (Tables)

6 Months Ended

Aug. 31, 2017

Segment Reporting [Abstract]

Results of Operations of Business Segments

Three Months Ended August 31, 2017	Radio			Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	41,764		$	846		$	238		$	42,848
Station operating expenses excluding and depreciation and amortization expense	29,881			1,104			2,919			33,904
Corporate expenses excluding depreciation and amortization expense	—			—			2,538			2,538
Depreciation and amortization	676			5			200			881
Gain on sale of assets, net of disposition costs	(76,745		)	39			—			(76,706		)
Loss on disposal of property and equipment	—			12			—			12
Operating income (loss)	$	87,952		$	(314	)	$	(5,419	)	$	82,219

Three Months Ended August 31, 2016	Radio		Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	45,972	$	12,619		$	183		$	58,774
Station operating expenses excluding LMA fees and depreciation and amortization expense	31,661		12,959			2,371			46,991
Corporate expenses excluding depreciation and amortization expense	—		—			2,453			2,453
Impairment loss on intangible assets	—		—			2,988			2,988
Depreciation and amortization	881		69			332			1,282
Loss on disposal of fixed assets	125		—			—			125
Operating income (loss)	$	13,305	$	(409	)	$	(7,961	)	$	4,935

Six Months Ended August 31, 2017	Radio			Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	80,470		$	1,990		$	552		$	83,012
Station operating expenses excluding depreciation and amortization expense	56,015			2,459			6,660			65,134
Corporate expenses excluding depreciation and amortization expense	—			—			5,281			5,281
Depreciation and amortization	1,444			10			405			1,859
Gain on sale of assets, net of disposition costs	(76,745		)	39			—			(76,706		)
Loss on disposal of property and equipment	—			12			—			12
Operating income (loss)	$	99,756		$	(530	)	$	(11,794	)	$	87,432

Six Months Ended August 31, 2016	Radio		Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	$	88,671	$	25,711		$	394		$	114,776
Station operating expenses excluding depreciation and amortization expense	58,936		26,437			4,607			89,980
Corporate expenses excluding depreciation and amortization expense	—		—			5,497			5,497
Impairment loss	—		—			2,988			2,988
Depreciation and amortization	1,788		142			684			2,614
Loss on disposal of property and equipment	125		—			—			125
Operating income (loss)	$	27,822	$	(868	)	$	(13,382	)	$	13,572

Total Assets	Radio		Publishing		Corporate & Emerging Technologies		Consolidated
As of February 28, 2017	$	260,228	$	1,746	$	27,364	$	289,338
As of August 31, 2017	$	258,162	$	697	$	18,417	$	277,276

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Significant Events (Tables)

6 Months Ended

Aug. 31, 2017

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Business Disposition, Pro Forma Results [Table Text Block]

	For the three months ended August 31, (unaudited)					For the six months ended August 31, (unaudited)
	2016			2017		2016		2017
Net revenues	$	39,856		$	40,451	$	76,686	$	75,201
Station operating expenses, excluding depreciation and amortization expense	30,316			31,275		56,348		58,113
Consolidated net (loss) income	(41		)	1,335		2,119		1,948
Net income attributable to the Company	692			527		2,223		301
Net income per share - basic	$	0.06		$	0.04	$	0.19	$	0.02
Net income per share - diluted	$	0.06		$	0.04	$	0.18	$	0.02

KPWR-FM [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Results of Operations of Disposal Groups

The following table summarizes certain operating results of KPWR-FM for all periods presented. Pursuant to Accounting Standards Codification 205-20-45-6, interest expense associated with the required Term Loan repayment associated with the sale of KPWR-FM is included in the results below. The sale of KPWR-FM did not qualify for reporting as a discontinued operation as it did not represent a strategic shift for the Company as described in Accounting Standards Codification 205-20-45.

	For the three months ended August 31,					For the six months ended August 31,
	2016		2017			2016		2017
Net revenues	$	6,709	$	2,399		$	13,385	$	7,818
Station operating expenses, excluding depreciation and amortization expense	4,356		2,590			8,729		6,928
Depreciation and amortization	103		—			207		63
Gain on sale of assets, net of disposition costs	—		(76,745		)	—		(76,745		)
Operating income	2,250		76,554			4,449		77,572
Interest expense	1,317		1,055			2,633		2,494
Income before income taxes	933		75,499			1,816		75,078

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Summary of Significant Accounting Policies Reverse Stock Split (Details)	Jul. 08, 2016
Reverse Stock Split [Abstract]
Stockholders' Equity Note, Stock Split, Conversion Ratio	0.25

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Summary of Significant Accounting Policies Calculation of Basic and Diluted Net Income Per Share from Continuing Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Basic net income per common share:
Net income available to common shareholders	$ 69,957	$ 335	$ 69,690	$ 3,021
Basic shares:
Basic weighted average common shares outstanding (in shares)	12,292	12,047	12,287	11,922
Impact of equity awards (in shares)	221	252	176	121
Diluted shares:
Diluted weighted average common shares outstanding (in shares)	12,513	12,299	12,463	12,043
Basic net income per common share:
Net income available to common shareholders from continuing operations, per basic shares (in dollars per share)	$ 5.69	$ 0.03	$ 5.67	$ 0.25
Diluted net income per common share:
Net income available to common shareholders from continuing operations, per dilutive shares (in dollars per share)	$ 5.59	$ 0.03	$ 5.59	$ 0.25

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Summary of Significant Accounting Policies Shares Excluded from Calculation as Effect of Conversion into Shares of Common Stock (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common share equivalents	1,960	1,340	2,276	1,491
Equity awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common share equivalents	1,960	1,340	2,276	1,491

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Summary of Significant Accounting Policies Summary of Restricted Cash (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash	$ 2,161	$ 2,323
98.7FM LMA restricted cash [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash	1,511	1,550
NextRadio LLC restricted cash [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash	0	123
Cash held in escrow [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash	$ 650	$ 650

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Summary of Significant Accounting Policies Operating Results of Local Programming and Marketing Agreement Fees (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Segment Reporting Information [Line Items]
Net revenues	$ 42,848	$ 58,774	$ 83,012	$ 114,776
Station operating expenses excluding LMA fees and depreciation and amortization expense	33,904	46,991	65,134	89,980
Interest expense	4,548	4,758	9,214	9,448
98.7 FM
Segment Reporting Information [Line Items]
Net revenues	2,583	2,583	5,166	5,166
Station operating expenses excluding LMA fees and depreciation and amortization expense	296	363	589	614
Interest expense	$ 656	$ 715	$ 1,328	$ 1,443

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Summary of Significant Accounting Policies Assets and Liabilities of Local Programming and Marketing Agreement Fees (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Segment Reporting Information [Line Items]
Prepaid expenses	$ 4,877	$ 4,798
Other current assets	1,502	1,503
Total current assets	38,712	46,457
Property and equipment, net	28,613	30,845
Indefinite-lived intangibles	195,648	197,666
Total assets	277,276	289,338
Other current liabilities	6,166	6,807
Total current liabilities	34,868	54,603
Long-term debt, net of current portion	125,244	190,372
Other noncurrent liabilities	5,921	4,842
Total liabilities	210,970	293,354
98.7 FM
Segment Reporting Information [Line Items]
Restricted cash	1,511	1,550
Prepaid expenses	481	445
Other current assets	13	7
Total current assets	2,005	2,002
Property and equipment, net	274	229
Indefinite-lived intangibles	46,390	46,390
Deposits and other	6,406	6,205
Total noncurrent assets	53,070	52,824
Total assets	55,075	54,826
Accounts payable and accrued expenses	22	54
Current maturities of long-term debt	6,317	6,039
Deferred revenue	835	807
Other current liabilities	195	205
Total current liabilities	7,369	7,105
Long-term debt, net of current portion	48,859	51,954
Total noncurrent liabilities	48,859	51,954
Total liabilities	$ 56,228	$ 59,059

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Summary of Significant Accounting Policies Restricted Cash (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash	$ 2,161	$ 2,323
NextRadio LLC restricted cash [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash	0	123
Cash held in escrow [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash	650	650
98.7FM LMA restricted cash [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash	$ 1,511	$ 1,550

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Summary of Significant Accounting Policies Noncontrolling Interests (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Noncontrolling Interest [Line Items]
Beginning balance			$ 32,921	$ 38,397
Net income (loss)	$ (808)	$ 733	(1,647)	104
Distributions to noncontrolling interests			(2,254)	(2,074)
Ending balance	32,314	36,219	32,314	36,219
Austin Radio Partnership [Member]
Noncontrolling Interest [Line Items]
Beginning balance			46,830	47,556
Net income (loss)			(3,151)	3,048
Distributions to noncontrolling interests			(2,254)	(2,074)
Ending balance	47,727	48,530	47,727	48,530
Digonex [Member]
Noncontrolling Interest [Line Items]
Beginning balance			(13,909)	(9,159)
Net income (loss)			1,504	3,152
Distributions to noncontrolling interests			0	0
Ending balance	$ (15,413)	$ (12,311)	$ (15,413)	$ (12,311)

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Summary of Significant Accounting Policies Additional Information (Details) $ in Millions	6 Months Ended
	Aug. 31, 2017 USD ($)
Noncontrolling Interest [Line Items]
Local programming and marketing agreement fee	$ 0.4
Austin Radio Partnership [Member]
Noncontrolling Interest [Line Items]
Percentage Of Controlling Interest	50.10%
Digonex [Member]
Noncontrolling Interest [Line Items]
Percentage Of Controlling Interest	82.00%

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Share Based Payments Assumptions used to Calculate Fair Value of Options on Date of Grant (Details)	6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Dividend Yield:	0.00%	0.00%
Expected Life (Years):	4 years 5 months	4 years 3 months 12 days
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate:	1.70%	0.90%
Expected Volatility:	52.90%	58.60%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate:	1.90%	1.20%
Expected Volatility:	53.60%	60.00%

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Share Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from Stock Options Exercised			$ 100,000	$ 100,000
Stock options granted, term			10 years
Stock options vesting period			3 years
Annual percentage over three years			33.33%
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options			$ 0	$ 0.00
Stock options weighted average grant date fair value			$ 1.24	$ 1.13
Shares available for future grants	2.3		2.3
Restricted stock awards requisite service period			3 years
Grant date fair value of shares vested			$ 600,000	$ 1,000,000
Compensation expenses	$ 707,000	$ 660,000	1,396,000	$ 1,516,000
Unrecognized compensation cost	$ 1,800,000		$ 1,800,000
Compensation cost of weighted average period			1 year 4 months
Other Compensation Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grants	0.3		0.3
Two Thousand Sixteen Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grants	2.0		2.0
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate:			1.70%	0.90%
Vesting dates of outstanding options			2017-09
Expiration dates of options			2018-03
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate:			1.90%	1.20%
Vesting dates of outstanding options			2020-07
Expiration dates of options			2027-08

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Share Based Payments Summary of Stock Options Outstanding and Activity (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Aug. 31, 2017 USD ($) $ / shares shares
Options
Outstanding, beginning of period | shares	2,559,643
Granted | shares	331,250
Exercised | shares	1,512,093
Forfeited | shares	8,331
Expired | shares	74,815
Outstanding, end of period | shares	2,780,497
Price
Outstanding, beginning of period	$ 5.17
Granted	2.77
Expired or exchanged	14.15
Outstanding, end of period	4.68
Exercisable, end of period	$ 5.47
Outstanding	6 years 11 months
Exercised	$ 2.25	[1]
Forfeited	$ 2.29
Exercisable, end of period	5 years 1 month
Outstanding, end of period | $	$ 277
Exercisable, end of period | $	$ 215

[1] Cash received from option exercises for the six months ended August 31, 2016 and 2017 was less than $0.1 million in both periods. The Company did not record an income tax benefit relating to the options exercised during the six months ended August 31, 2016 or 2017.

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Share Based Payments Summary of Nonvested Options and Changes (Details)	6 Months Ended
	Aug. 31, 2017 $ / shares shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share Based Compensation Share Based Payment Awards Option Forfeited In Period Weighted Average Grant Date Fair Value	$ 1.10
Options
Nonvested, beginning of period | shares	1,090,375
Granted | shares	331,250
Vested | shares	144,890
Nonvested, end of period | shares	1,268,404
Weighted Average Grant Date Fair Value
Nonvested, beginning of period	$ 2.26
Granted	1.24
Vested	4.26
Nonvested, end of period	$ 1.77

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Share Based Payments Summary of Restricted Stock Grants Outstanding and Activity (Details) - Restricted Stock	6 Months Ended
	Aug. 31, 2017 $ / shares shares
Awards
Grants outstanding, beginning of period | shares	196,706
Granted | shares	346,462
Vested (restriction lapsed) | shares	163,802
Grants outstanding, end of period | shares	379,366
Price
Grants outstanding, beginning of period | $ / shares	$ 4.64
Granted | $ / shares	2.87
Vested (restriction lapsed) | $ / shares	3.65
Grants outstanding, end of period | $ / shares	$ 3.45

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Share Based Payments Stock-Based Compensation Expense and Related Tax Benefits Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 707	$ 660	$ 1,396	$ 1,516
Station operating expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	177	197	326	534
Corporate expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 530	$ 463	$ 1,070	$ 982

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Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Intangible Assets And Goodwill [Line Items]
Indefinite-Lived Intangible Assets (Excluding Goodwill)	$ 195,648	$ 197,666
Goodwill	$ 4,603	$ 4,603

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Intangible Assets and Goodwill Definite-lived Intangibles (Details) - USD ($) $ in Thousands	6 Months Ended
	Aug. 31, 2017	Feb. 28, 2017
Definite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 2,551	$ 3,165
Accumulated Amortization	1,273	1,642
Net Carrying Amount	$ 1,278	1,523
Trademarks
Definite-Lived Intangible Assets [Line Items]
Weighted average remaining useful life	7 years 292 days
Gross Carrying Amount	$ 397	696
Accumulated Amortization	318	545
Net Carrying Amount	79	151
Customer-Related Intangible Assets
Definite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	0	315
Accumulated Amortization	0	289
Net Carrying Amount	$ 0	26
Contract-Based Intangible Assets
Definite-Lived Intangible Assets [Line Items]
Weighted average remaining useful life	4 years 36 days
Gross Carrying Amount	$ 2,154	2,154
Accumulated Amortization	955	808
Net Carrying Amount	$ 1,199	$ 1,346

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Intangible Assets and Goodwill Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Aug. 31, 2016	Aug. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets	$ 500	$ 100
Estimate of amortization expense related to intangible assets:
Remainder of 2018		153
2019		304
2020		304
2021		304
2022		181
Thereafter		$ 32

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Long-term Debt - Additional Information (Detail)					6 Months Ended
	Apr. 18, 2017 USD ($)	Nov. 01, 2016 USD ($)	Aug. 22, 2016 USD ($)	Apr. 30, 2015 USD ($)	Aug. 31, 2017 USD ($)	Feb. 28, 2017 USD ($)	Nov. 07, 2014 USD ($)	Jun. 16, 2014 USD ($)	Jun. 10, 2014 USD ($)	May 30, 2012 USD ($)
Debt Instrument
Unamortized discount on issuance of debt					$ 4,686,000	$ 7,038,000
Repayments of Debt					15,000,000
Asset Sale Proceeds Subject to Reinvestment		$ 10,000,000
NextRadio notes payable [Member]
Debt Instrument
Interest rate during period								4.00%
Non-recourse debt								$ 4,000,000
Non-recourse debt
Debt Instrument
Face amount of debt					10,200,000.0	9,500,000.0
Non-recourse debt					9,868,000
98.7FM Non-recourse debt
Debt Instrument
Face amount of debt										$ 82,200,000
Interest rate during period										4.10%
Non-recourse debt					57,008,000	59,958,000
Digonex Non-recourse debt
Debt Instrument
Face amount of debt								$ 6,200,000
Interest rate during period								5.00%
Non-recourse debt								$ 3,600,000
Maximum
Debt Instrument
Debt Compliance Consolidated EBITDA permitted addback, Going Private not approved			$ 2,500,000
Debt Compliance Consolidated EBITDA permitted addback, Going Private approved			$ 8,000,000
98.7FM Non-recourse debt
Debt Instrument
Unamortized discount on issuance of debt					1,800,000	2,000,000
Revolver
Debt Instrument
Repayments of Debt		8,500,000
Two Thousand Fourteen Credit Agreement
Debt Instrument
Total Credit Agreement debt					$ 79,421,000	152,245,000
Provision for credit facility increase									$ 20,000,000
Commitment Fee, Percentage of Line of Credit and Term Loan					7500.00%
Commitment fee	1.00%				0.50%
Unamortized discount on issuance of debt					$ 2,900,000				5,100,000
Contingent debt amendment fee					0.50%
Two Thousand Fourteen Credit Agreement | Term Loan
Debt Instrument
Total Credit Agreement debt					$ 74,421,000	152,245,000
Maximum borrowing capacity									185,000,000.0
Face amount of debt									185,000,000
Two Thousand Fourteen Credit Agreement | Revolver
Debt Instrument
Total Credit Agreement debt					$ 5,000,000	$ 0
Maximum borrowing capacity									20,000,000.0
Two Thousand Fourteen Credit Agreement | Letter of Credit
Debt Instrument
Maximum borrowing capacity									$ 5,000,000.0
First Amendment to Two Thousand Fourteen Credit Agreement
Debt Instrument
Debt covenant increased leverage ratio amount					6.00
Debt covenant maximum severance expense excluded from consolidated EBITDA					$ 5,000,000
Debt covenant, maximum losses attributable to reformatting of radio stations included in consolidated EBITDA					$ 2,500,000.0
Prepayment fee, percentage					1.00%
Increase in basis spread on variable rate					0.25%
Debt covenant, leverage ratio threshold for applicable margin					5.00
Debt Issuance Costs, Net							$ 1,000,000
Second Amendment to Two Thousand Fourteen Credit Agreement [Member]
Debt Instrument
Payments of Debt Issuance Costs	$ 1,500,000
Debt Instrument, Periodic Payment, Percentage of Principal Due in Quarterly Installments, Period One				0.50%
Debt Instrument, Periodic Payment, Percentage of Principal Due in Quarterly Installments, Period Two				1.25%
Debt Instrument, Debt Covenant, Leverage Ratio, Period One, Maximum				6.75
Debt Instrument, Debt Covenant, Leverage Ratio, Period Two, Maximum				6.50
Debt Instrument, Debt Covenant, Leverage Ratio, Period Three, Maximum				6.25
Debt Instrument, Debt Covenant, Leverage Ratio, Period Four, Maximum				6.00
Debt Instrument, Debt Covenant, Leverage Ratio, Period Five, Maximum				5.75
Debt Instrument, Debt Covenant, Leverage Ratio, Period Six, Maximum				4.00
Debt Instrument, Prepayment Fee, Period One, Percentage				2.00%
Debt Instrument, Prepayment Fee, Period Two, Percentage				1.00%
Debt Issuance Costs, Net				$ 1,100,000
Term Loan
Debt Instrument
Repayments of Debt		$ 15,000,000
Covenant Requirement
Debt Instrument
Debt covenant increased leverage ratio amount					4.00
Covenant Requirement | Minimum
Debt Instrument
Minimum Interest Coverage Ratio					1.60	2.00
Base Rate | Two Thousand Fourteen Credit Agreement
Debt Instrument
Basis spread on interest rate	6.00%				3.75%
Base Rate | Two Thousand Fourteen Credit Agreement | Minimum
Debt Instrument
Debt Instrument, Interest Rate, Stated Percentage					2.00%
Base Rate | Second Amendment to Two Thousand Fourteen Credit Agreement [Member]
Debt Instrument
Basis spread on interest rate				5.00%
London Interbank Offered Rate (LIBOR) | Two Thousand Fourteen Credit Agreement
Debt Instrument
Basis spread on interest rate	7.00%				4.75%
London Interbank Offered Rate (LIBOR) | Two Thousand Fourteen Credit Agreement | Minimum
Debt Instrument
Debt Instrument, Interest Rate, Stated Percentage					1.00%
London Interbank Offered Rate (LIBOR) | Second Amendment to Two Thousand Fourteen Credit Agreement [Member]
Debt Instrument
Basis spread on interest rate				6.00%

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Long-term Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017	Jun. 10, 2014
Debt Instrument
Less: Current maturities	$ 16,367	$ 23,600
Less: Unamortized original issue discount	4,686	7,038
Total long-term debt	125,244	190,372
98.7FM Non-recourse debt
Debt Instrument
Non-recourse debt	57,008	59,958
Other non-recourse debt
Debt Instrument
Non-recourse debt		8,807
Non-recourse debt
Debt Instrument
Non-recourse debt	9,868
Two Thousand Fourteen Credit Agreement
Debt Instrument
Total Credit Agreement debt	79,421	152,245
Less: Unamortized original issue discount	2,900		$ 5,100
Revolver
Debt Instrument
Less: Current maturities	5,000
Revolver | Two Thousand Fourteen Credit Agreement
Debt Instrument
Total Credit Agreement debt	5,000	0
Term Loan
Debt Instrument
Less: Current maturities	4,400
Term Loan | Two Thousand Fourteen Credit Agreement
Debt Instrument
Total Credit Agreement debt	$ 74,421	$ 152,245

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Long-term Debt - Schedule of Maximum Leverage Ratio (Details) - Two Thousand Fourteen Credit Agreement $ in Millions	6 Months Ended
	Aug. 31, 2017 USD ($)
Covenant Requirement
Line of Credit Facility
Consolidated EBITDA	$ 13.6
Minimum Interest Coverage Ratio	1.6
Actual Results
Line of Credit Facility
Consolidated EBITDA	$ 17.5
Minimum Interest Coverage Ratio	2.59

XML

Long-term Debt - Schedule of Maturities of Long-term Debt (Details) $ in Thousands	Aug. 31, 2017 USD ($)
Debt Instrument
2015	$ 7,489
2016	11,587
2017	77,171
2018	13,994
2019	12,394
Thereafter	24,033
Total long-term debt	146,668
98.7FM Non-recourse debt
Debt Instrument
2015	3,089
2016	6,587
2017	7,150
2018	7,755
2019	8,394
Thereafter	24,033
Total long-term debt	57,008
Digonex Non-recourse debt
Debt Instrument
2015	0
2016	0
2017	0
2018	6,239
2019	4,000
Thereafter	0
Total long-term debt	10,239
Revolver | Two Thousand Fourteen Credit Agreement
Debt Instrument
2015	0
2016	5,000
2017	0
2018	0
2019	0
Thereafter	0
Total long-term debt	5,000
Term Loan | Two Thousand Fourteen Credit Agreement
Debt Instrument
2015	4,400
2016	0
2017	70,021
2018	0
2019	0
Thereafter	0
Total long-term debt	$ 74,421

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Long-term Debt Long-term Debt - Schedule of Net Available Proceeds from the sale of Texas Monthly (Details) $ in Thousands	6 Months Ended
	Aug. 31, 2017 USD ($)
Debt Instrument
Gross Proceeds from Divestiture of Business	$ 25,000
Divestiture Working Capital Adjustments	(747)
Business Divestiture Disposition Costs Exclusive of Severance	(1,378)
Maximum Potential Net Available Proceeds Prior to Reinvestments	22,875
Reinvestment of Net Available Proceeds	(3,475)
Repayments of Debt	(15,000)
Remaining Net Available Proceeds	$ 4,400

XML

Liquidity and Going Concern Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Oct. 12, 2018	Aug. 31, 2017	Feb. 28, 2017
Other Commitments [Line Items]
Current maturities of long-term debt (Note 4)		$ 16,367	$ 23,600
Revolver
Other Commitments [Line Items]
Current maturities of long-term debt (Note 4)		5,000
Term Loan
Other Commitments [Line Items]
Current maturities of long-term debt (Note 4)		$ 4,400
Scenario, Forecast [Member]
Other Commitments [Line Items]
Interest Paid, Net	$ 6,500
Income Taxes Paid	$ 3,200

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Fair Value Measurements Assets and Liabilities Accounted for at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	$ 800	$ 800
Total assets measured at fair value on a recurring basis	800	800
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale securities	800	800
Total assets measured at fair value on a recurring basis	$ 800	$ 800

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Fair Value Measurements Additional Information (Details) $ in Millions	Aug. 31, 2017 USD ($)
Fair Value Measurements Additional Detail [Abstract]
Long-term Debt, Fair Value	$ 76.8

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Segment Information Results of Operations of Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016	Feb. 28, 2017
Segment Reporting Information [Line Items]
Net revenues	$ 42,848	$ 58,774	$ 83,012	$ 114,776
Station operating expenses excluding LMA fees and depreciation and amortization expense	33,904	46,991	65,134	89,980
Corporate expenses excluding depreciation and amortization expense	2,538	2,453	5,281	5,497
Impairment loss on intangible assets	0	2,988	0	2,988
Depreciation and amortization	881	1,282	1,859	2,614
Gain on sale of assets, net of disposition costs	76,706	0	76,706	0
Loss on disposal of property and equipment	(12)	(125)	(12)	(125)
Operating income (loss)	82,219	4,935	87,432	13,572
Total Assets	277,276		277,276		$ 289,338
Radio
Segment Reporting Information [Line Items]
Net revenues	41,764	45,972	80,470	88,671
Station operating expenses excluding LMA fees and depreciation and amortization expense	29,881	31,661	56,015	58,936
Corporate expenses excluding depreciation and amortization expense	0	0	0	0
Impairment loss on intangible assets		0		0
Depreciation and amortization	676	881	1,444	1,788
Gain on sale of assets, net of disposition costs	76,745		76,745
Loss on disposal of property and equipment	0	(125)	0	(125)
Operating income (loss)	87,952	13,305	99,756	27,822
Total Assets	258,162		258,162		260,228
Publishing
Segment Reporting Information [Line Items]
Net revenues	846	12,619	1,990	25,711
Station operating expenses excluding LMA fees and depreciation and amortization expense	1,104	12,959	2,459	26,437
Corporate expenses excluding depreciation and amortization expense	0	0	0	0
Impairment loss on intangible assets		0		0
Depreciation and amortization	5	69	10	142
Gain on sale of assets, net of disposition costs	(39)		(39)
Loss on disposal of property and equipment	(12)	0	(12)	0
Operating income (loss)	(314)	(409)	(530)	(868)
Total Assets	697		697		1,746
Corporate
Segment Reporting Information [Line Items]
Net revenues	238	183	552	394
Station operating expenses excluding LMA fees and depreciation and amortization expense	2,919	2,371	6,660	4,607
Corporate expenses excluding depreciation and amortization expense	2,538	2,453	5,281	5,497
Impairment loss on intangible assets		2,988		2,988
Depreciation and amortization	200	332	405	684
Gain on sale of assets, net of disposition costs	0		0
Loss on disposal of property and equipment	0	0	0	0
Operating income (loss)	(5,419)	$ (7,961)	(11,794)	$ (13,382)
Total Assets	$ 18,417		$ 18,417		$ 27,364

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Regulatory, Legal and Other Matters Regulatory, Legal and Other Matters (Details) - USD ($) $ in Thousands	Aug. 31, 2017	Feb. 28, 2017
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted Cash	$ 2,161	$ 2,323

XML

Income Taxes Additional Information (Details)	6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Percent	6.00%	31.00%

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Significant Events Additional Information (Details) $ in Thousands	6 Months Ended
	Aug. 31, 2017 USD ($)
Business Acquisition [Line Items]
Gross Proceeds from Divestiture of Business	$ 25,000
Local programming and marketing agreement fee	400
KPWR-FM [Member]
Business Acquisition [Line Items]
Gross Proceeds from Divestiture of Business	80,100
Net Proceeds from Divestiture of Businesses	$ 73,600

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Significant Events Results of KPWR-FM (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
NET REVENUES	$ 42,848	$ 58,774	$ 83,012	$ 114,776
Station operating expenses excluding LMA fees and depreciation and amortization expense	33,904	46,991	65,134	89,980
Depreciation and amortization	881	1,282	1,859	2,614
Gain on sale of assets, net of disposition costs	76,706	0	76,706	0
Operating income	82,219	4,935	87,432	13,572
Interest expense	4,548	4,758	9,214	9,448
Income before income taxes	75,159	266	75,709	4,256
KPWR-FM [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
NET REVENUES	2,399	6,709	7,818	13,385
Station operating expenses excluding LMA fees and depreciation and amortization expense	2,590	4,356	6,928	8,729
Depreciation and amortization	0	103	63	207
Gain on sale of assets, net of disposition costs	(76,745)	0	(76,745)	0
Operating income	76,554	2,250	77,572	4,449
Interest expense	1,055	1,317	2,494	2,633
Income before income taxes	$ 75,499	$ 933	$ 75,078	$ 1,816

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Significant Events Proforma Results (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Aug. 31, 2017	Aug. 31, 2016	Aug. 31, 2017	Aug. 31, 2016
Business Acquisition [Line Items]
Business Acquisition, Pro Forma Revenue	$ 40,451	$ 39,856	$ 75,201	$ 76,686
Business Disposition, Pro Forma Operating Expenses	31,275	30,316	58,113	56,348
Business Disposition, Pro Forma Consolidated Net Income	1,335	(41)	1,948	2,119
Business Disposition, Pro Forma Net Income Available to the Company	$ 527	$ 692	$ 301	$ 2,223
Basic Earnings Per Share, Pro Forma	$ 0.04	$ 0.06	$ 0.02	$ 0.19
Diluted Earnings Per Share Pro Forma	$ 0.04	$ 0.06	$ 0.02	$ 0.18