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-FM had 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 November 30,					For the nine months ended November 30,
	2016		2017			2016		2017
Net revenues	$	6,058	$	—		$	19,443	$	7,818
Station operating expenses, excluding depreciation and amortization expense	4,367		177			13,096		7,105
Depreciation and amortization	99		—			306		63
Gain on sale of assets, net of disposition costs	—		—			—		(76,745		)
Operating income (loss)	1,592		(177		)	6,041		77,395
Interest expense	1,302		—			3,935		2,479
Income (loss) before income taxes	290		(177		)	2,106		74,916

Unaudited pro forma summary information is presented below for the three-month and nine-month periods ended November 30, 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 the related 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 November 30, (unaudited)				For the nine months ended November 30, (unaudited)
	2016		2017		2016		2017
Net revenues	$	36,935	$	35,344	$	113,621	$	110,545
Station operating expenses, excluding depreciation and amortization expense	27,786		27,802		84,134		85,915
Consolidated net income	925		732		3,148		2,790
Net income attributable to the Company	344		21		2,671		432
Net income per share - basic	$	0.03	$	0.00	$	0.22	$	0.04
Net income per share - diluted	$	0.03	$	0.00	$	0.22	$	0.03