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 May 31, 2016

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	o	Accelerated filer	o
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting company	ý

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 July 1, 2016, was:

44,142,662	Shares of Class A Common Stock, $.01 Par Value
4,569,464	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 periods ended May 31, 2015 and 2016	3
Condensed Consolidated Statements of Comprehensive Income for the three-month periods ended May 31, 2015 and 2016	4
Condensed Consolidated Balance Sheets as of February 29, 2016 and May 31, 2016	5
Condensed Consolidated Statement of Changes in Deficit for the three-month period ended May 31, 2016	7
Condensed Consolidated Statements of Cash Flows for the three-month periods ended May 31, 2015 and 2016	8
Notes to Condensed Consolidated Financial Statements	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3. Quantitative and Qualitative Disclosures about Market Risk	34
Item 4. Controls and Procedures	34
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	34
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 6. Exhibits	35
Signatures	36

-2-

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   May 31,
	2015			2016
NET REVENUES	$	58,453		$	56,002
OPERATING EXPENSES:
Station operating expenses excluding depreciation and amortization expense of $1,132 and $1,110, respectively	45,543			42,989
Corporate expenses excluding depreciation and amortization expense of $318 and $222, respectively	3,819			3,044
Depreciation and amortization	1,450			1,332
Total operating expenses	50,812			47,365
OPERATING INCOME	7,641			8,637
OTHER EXPENSE:
Interest expense	(4,546		)	(4,690		)
Other income, net	10			43
Total other expense	(4,536		)	(4,647		)
INCOME BEFORE INCOME TAXES	3,105			3,990
PROVISION FOR INCOME TAXES	947			675
CONSOLIDATED NET INCOME	2,158			3,315
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	633			629
NET INCOME ATTRIBUTABLE TO THE COMPANY	1,525			2,686
NET INCOME PER SHARE - BASIC	$	0.04		$	0.06
NET INCOME PER SHARE - DILUTED	$	0.03		$	0.06
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic	43,217			47,070
Diluted	47,373			47,295

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   May 31,
	2015		2016
CONSOLIDATED NET INCOME	$	2,158	$	3,315
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	633		629
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	1,525	$	2,686

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 29, 2016		May 31, 2016
			(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,456	$	4,284
Restricted cash	1,464		1,747
Accounts receivable, net	34,906		36,962
Prepaid expenses	7,413		9,309
Other current assets	3,452		2,129
Total current assets	51,691		54,431
PROPERTY AND EQUIPMENT, NET	33,843		33,136
INTANGIBLE ASSETS (NOTE 3):
Indefinite-lived intangibles	205,129		205,129
Goodwill	14,697		14,697
Other intangibles, net	3,299		3,074
Total intangible assets	223,125		222,900
OTHER ASSETS, NET	7,947		8,182
Total assets	$	316,606	$	318,649

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 29, 2016			May 31, 2016
				(Unaudited)
LIABILITIES AND DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	8,127		$	7,846
Current maturities of long-term debt (Note 4)	17,573			14,832
Accrued salaries and commissions	8,375			6,123
Deferred revenue	11,435			12,912
Other current liabilities	5,775			5,679
Total current liabilities	51,285			47,392
LONG-TERM DEBT, NET OF CURRENT MATURITIES (NOTE 4)	228,027			230,891
OTHER NONCURRENT LIABILITIES	7,728			7,367
DEFERRED INCOME TAXES	43,715			44,349
Total liabilities	330,755			329,999
COMMITMENTS AND CONTINGENCIES
DEFICIT:
Class A common stock, $.01 par value; authorized 170,000,000 shares; issued and outstanding 41,609,601 shares at February 29, 2016 and 44,142,662 shares at May 31, 2016	416			441
Class B common stock, $.01 par value; authorized 30,000,000 shares; issued and outstanding 4,569,464 shares at February 29, 2016 and May 31, 2016	46			46
Series A non-cumulative convertible preferred stock, $.01 par value; $50.00 liquidation preference per share, aggregate liquidation preference and redemption amount of $43,316 and $0 at February 29, 2016 and May 31, 2016, respectively; authorized 2,875,000 shares; issued and outstanding 866,319 shares at February 29, 2016; no shares issued and outstanding at May 31, 2016	9			—
Additional paid-in capital	589,483			590,138
Accumulated deficit	(642,500		)	(639,814		)
Total shareholders’ deficit	(52,546		)	(49,189		)
NONCONTROLLING INTERESTS	38,397			37,839
Total deficit	(14,149		)	(11,350		)
Total liabilities and deficit	$	316,606		$	318,649

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

(Unaudited)

(In thousands, except share data)

	Class A Common Stock			Class B Common Stock			Series A Preferred Stock					Additional Paid-in Capital		Accumulated Deficit			Noncontrolling Interests			Total Deficit
	Shares	Amount		Shares	Amount		Shares		Amount
Balance, February 29, 2016	41,609,601	$	416	4,569,464	$	46	866,319		$	9		$	589,483	$	(642,500	)	$	38,397		$	(14,149	)
Net income														2,686			629			3,315
Issuance of common stock to employees and officers	107,369	1										655								656
Distributions to noncontrolling interests																	(1,187		)	(1,187		)
Conversion of Series A Preferred Stock to Class A Common Stock	2,425,692	24					(866,319	)	(9		)									15
Balance, May 31, 2016	44,142,662	$	441	4,569,464	$	46	—		$	—		$	590,138	$	(639,814	)	$	37,839		$	(11,350	)

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)
	Three Months Ended May 31,
	2015			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$	2,158		$	3,315
Adjustments to reconcile consolidated net income to net cash provided by operating activities -
Depreciation and amortization	1,450			1,332
Amortization of debt discount	395			427
Noncash accretion of debt	186			186
Provision for (recovery of) bad debts	60			(36		)
Provision for deferred income taxes	841			634
Noncash compensation	2,104			856
Other	—			2
Changes in assets and liabilities -
Restricted cash	454			(283		)
Accounts receivable	(1,924		)	(2,020		)
Prepaid expenses and other current assets	(228		)	(573		)
Other assets	(202		)	(258		)
Accounts payable and accrued liabilities	(3,259		)	(2,533		)
Deferred revenue	1,171			1,477
Income taxes	(97		)	(124		)
Other liabilities	(1,420		)	(333		)
Net cash provided by operating activities	1,689			2,069
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(421		)	(402		)
Other	23			23
Net cash used in investing activities	$	(398	)	$	(379	)

-8-

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands)
	Three Months Ended May 31,
	2015			2016
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt	$	(1,656	)	$	(7,490	)
Proceeds from long-term debt	3,000			7,000
Debt-related costs	(1,134		)	—
Distributions to noncontrolling interests	(1,636		)	(1,187		)
Proceeds from the exercise of stock options	54			—
Settlement of tax withholding obligations on stock issued to employees	(318		)	(185		)
Net cash used in financing activities	(1,690		)	(1,862		)
DECREASE IN CASH AND CASH EQUIVALENTS	(399		)	(172		)
CASH AND CASH EQUIVALENTS:
Beginning of period	3,669			4,456
End of period	$	3,270		$	4,284
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	4,321		$	3,866
Cash paid for income taxes, net	216			116
Noncash financing transactions-
Stock issued to employees and directors	1,432			840

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)

May 31, 2016

(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 29, 2016. 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 May 31, 2016, and the results of its operations and cash flows for the three-month periods ended May 31, 2015 and 2016.

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 29, 2016 that have had a material impact on our condensed consolidated financial statements and related notes.

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 May 31, 2015 and 2016 consisted of stock options and restricted stock awards. Potentially dilutive securities at May 31, 2015 also included Series A non-cumulative convertible preferred stock (the “Preferred Stock”). All shares of Preferred Stock were converted into Class A common stock during the three months ended May 31, 2016. See Note 10 for more discussion of the conversion of Preferred Stock. The following table sets forth the calculation of basic and diluted net income per share:

	For the three months ended
	May 31, 2015					May 31, 2016
	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	$	1,525	43,217	$	0.04	$	2,686	47,070	$	0.06
Impact of equity awards	—		1,890	—		—		225	—
Impact of conversion of preferred stock into common stock	—		2,266	—		—		—	—
Diluted net income per common share:
Net income available to common shareholders	$	1,525	47,373	$	0.03	$	2,686	47,295	$	0.06

-10-

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  May 31,
	2015	2016
	(shares in 000’s )
Equity awards	3,592	8,208
Antidilutive common share equivalents	3,592	8,208

Local Programming and Marketing Agreement Fees

The Company from time to time enters into local programming and marketing agreements (“LMAs”) in connection with acquisitions or dispositions of radio stations, often pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses. 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 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 May 31,
	2015		2016
	(amounts in 000's)
Net revenues	$	2,583	$	2,583
Station operating expenses, excluding depreciation and amortization expense	257		251
Interest expense	780		728

-11-

Assets and liabilities of 98.7FM as of February 29, 2016 and May 31, 2016 were as follows:

	As of February 29,		As of May 31,
	2016		2016
	(amounts in 000's)
Current assets:
Restricted cash	$	1,464	$	1,022
Prepaid expenses	545		530
Total current assets	2,009		1,552
Noncurrent assets:
Property and equipment, net	253		244
Indefinite lived intangibles	49,297		49,297
Deposits and other	5,460		5,678
Total noncurrent assets	55,010		55,219
Total assets	$	57,019	$	56,771
Current liabilities:
Accounts payable and accrued expenses	$	14	$	17
Current maturities of long-term debt	5,453		5,582
Deferred revenue	779		807
Other current liabilities	223		219
Total current liabilities	6,469		6,625
Noncurrent liabilities:
Long-term debt, net of current portion and unamortized debt discount	57,728		56,359
Total noncurrent liabilities	57,728		56,359
Total liabilities	$	64,197	$	62,984

Restricted Cash

The Company's restricted cash, included in current assets in the accompanying condensed consolidated balance sheets, totaled $1.5 million and $1.7 million as of February 29, 2016 and May 31, 2016, respectively.

The terms of our 98.7FM non-recourse notes and related agreements discussed in Note 4 restrict a portion of our cash on deposit for specific operating and financing purposes. Restricted cash related to the 98.7FM non-recourse notes and related agreements totaled $1.5 million and $1.0 million as of February 29, 2016 and May 31, 2016, respectively.

In connection with the Company's agreement with Sprint/United Management Company (“Sprint”), the Company collects cash from other participating companies in the radio industry and remits cash collected to Sprint. The entirety of cash collected but not yet remitted to Sprint classified as restricted cash as of May 31, 2016 was $0.7 million. The Company had remitted to Sprint all collected cash related to its agreement as of February 29, 2016.

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. 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.

-12-

Noncontrolling interests represents 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 three months ended May 31, 2015 and 2016:

	Austin radio partnership			Digonex			Total noncontrolling interests
Balance, February 28, 2015	$	47,883		$	(1,222	)	$	46,661
Net income (loss)	1,614			(981		)	633
Distributions to noncontrolling interests	(1,636		)	—			(1,636		)
Balance, May 31, 2015	$	47,861		$	(2,203	)	$	45,658
Balance, February 29, 2016	$	47,556		$	(9,159	)	$	38,397
Net income (loss)	1,527			(898		)	629
Distributions to noncontrolling interests	(1,187		)	—			(1,187		)
Balance, May 31, 2016	$	47,896		$	(10,057	)	$	37,839

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, 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 in the first quarter of its fiscal year ending February 28, 2019. The Company is currently evaluating the method of adoption and impact, if any, the adoption of this guidance will have on its financial position and results of operations.

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements - Going Concern - 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. ASU 2014-15 is effective for the fiscal year ending February 28, 2017, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this update is not expected to have an impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued Accounting Standards Update 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This update provides guidance as to when a company using a cloud computing service that includes a software license should capitalize and depreciate the software license. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows.

In September 2015, the FASB issued Accounting Standards Update 2015-16, Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments. This update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in the provisional amount as if the accounting had been completed at the acquisition date. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows.

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 March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) to simplify the accounting for share-based payment transactions, including the income tax consequences, and standardize certain classifications on the statement of cash flows. As permitted by ASU 2016-09, the Company chose to early adopt the provisions of this update as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows.

-13-

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 three months ended May 31, 2015 and 2016:

	Three Months Ended May 31,
	2015	2016
Risk-Free Interest Rate:	1.3% - 1.4%	1.2%
Expected Dividend Yield:	0%	0%
Expected Life (Years):	4.3	4.3
Expected Volatility:	63.6% - 64.6%	58.6% - 59.6%

The following table presents a summary of the Company’s stock options outstanding at May 31, 2016, and stock option activity during the three months ended May 31, 2016 (“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	7,793,702	$	1.59
Granted	582,500	0.54
Expired	73,754	11.17
Outstanding, end of period	8,302,448	1.43		6.8	$	98
Exercisable, end of period	4,846,694	1.41		5.3	$	90

Cash received from option exercises for the three months ended May 31, 2015 was $0.1 million. The Company did not record an income tax benefit relating to the options exercised during the three months ended May 31, 2015. No options were exercised during the three months ended May 31, 2016.

The weighted average per share grant date fair value of options granted during the three months ended May 31, 2015 and 2016, was $1.05 and $0.26, respectively.

A summary of the Company’s nonvested options at May 31, 2016, and changes during the three months ended May 31, 2016, is presented below:

-14-

	Options	Weighted Average Grant Date Fair Value
Nonvested, beginning of period	3,323,253	$	0.93
Granted	582,500	0.26
Vested	449,999	1.25
Nonvested, end of period	3,455,754	0.77

There were 1.9 million shares available for future grants under the Company’s various equity plans (0.6 million shares under the 2015 Equity Compensation Plan and 1.3 million shares under other plans) at May 31, 2016, not including shares that may become available for future grants upon forfeiture, lapse or surrender for taxes. Additionally, the board of directors approved the 2016 Equity Compensation Plan on January 29, 2016. Under the 2016 Equity Compensation Plan, awards equivalent to 6.0 million shares of common stock may be granted. The 2016 Equity Compensation Plan won't become effective until it is approved by Emmis' shareholders at the annual meeting in July 2016. However, Emmis' Chairman and Chief Executive Officer, Jeffrey H. Smulyan, controls more than 50% of the vote on this matter and has informed the board of directors that he intends to vote in favor of approving the 2016 Plan.

The vesting dates of outstanding options at May 31, 2016 range from July 2016 to March 2019, and expiration dates range from March 2017 to April 2026.

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 2015 Equity Compensation Plan. The Company may also award, out of the Company’s 2015 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 May 31, 2016, and restricted stock activity during the three months ended May 31, 2016 (“Price” reflects the weighted average share price at the date of grant):

	Awards	Price
Grants outstanding, beginning of period	852,028	$	1.78
Granted	456,367	0.52
Vested (restriction lapsed)	718,867	1.05
Grants outstanding, end of period	589,528	1.69

The total grant date fair value of shares vested during the three months ended May 31, 2015 and 2016, was $1.0 million and $0.8 million, respectively.

-15-

Recognized Non-Cash Compensation Expense

The following table summarizes stock-based compensation expense recognized by the Company during the three months ended May 31, 2015 and 2016. The company did not recognize any tax benefits related to stock-based compensation during the periods presented below.

	Three Months Ended May 31,
	2015		2016
Station operating expenses	$	724	$	337
Corporate expenses	1,380		519
Stock-based compensation expense included in operating expenses	2,104		856

As of May 31, 2016, there was $1.9 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 1.6 years.

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 $205.1 million as of February 29, 2016 and May 31, 2016. 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 quarter ended May 31, 2016, 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

ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. The Company conducts the two-step impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. During the quarter ended May 31, 2016, no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. When assessing its goodwill for impairment, the Company uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units (radio stations grouped by market and magazines on an individual basis). 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. There are no publicly traded publishing companies that are focused predominantly on city and regional magazines as is our publishing segment.

-16-

Therefore, the market multiple used as a benchmark for our publishing reporting units has been based on recently completed transactions within the city and regional magazine industry or analyst reports that include valuations of magazine divisions within publicly traded media conglomerates. Management believes this methodology for valuing radio and publishing 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 step-one reporting unit 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.

This enterprise valuation is compared to the carrying value of the reporting unit for the first step of the goodwill impairment test. If the reporting unit exhibits impairment, the Company proceeds to the second step of the goodwill impairment test. For its step-two testing, the enterprise value is allocated among the tangible assets, indefinite-lived intangible assets (FCC licenses valued using a direct-method valuation approach) and unrecognized intangible assets, such as customer lists, with the residual amount representing the implied fair value of the goodwill. To the extent the carrying amount of the goodwill exceeds the implied fair value of the goodwill, the difference is recorded as an impairment charge in the statement of operations.

The following table summarizes the Company's goodwill by segment as of February 29, 2016 and May 31, 2016.

	As of February 29,		As of May 31,
	2016		2016
Radio	$	4,603	$	4,603
Publishing	8,036		8,036
Corporate & Emerging Technologies	2,058		2,058
Total Goodwill	$	14,697	$	14,697

Definite-lived intangibles

The Company’s definite-lived intangible assets consist of patents, customer lists, trademarks and a syndicated programming contract, all 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. 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 29, 2016 and May 31, 2016:

		As of February 29, 2016						As of May 31, 2016
		(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	6.7	$	1,240	$	727	$	513	$	1,240	$	762	$	478
Patents	5.3	1,815		1,141		674		1,815		1,172		643
Customer lists	1.2	1,015		543		472		1,015		629		386
Programming agreement	5.3	2,154		514		1,640		2,154		587		1,567
TOTAL		$	6,224	$	2,925	$	3,299	$	6,224	$	3,150	$	3,074

-17-

Total amortization expense from definite-lived intangibles for the three-month periods ended May 31, 2015 and 2016 was $0.4 million and $0.2 million, respectively. The following table presents the Company's estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangibles:

Year ended February 28 (29),	Expected Amortization Expense
	(in 000's)
2017	896
2018	636
2019	457
2020	457
2021	457

Note 4. Long-term Debt

Long-term debt was comprised of the following at February 29, 2016 and May 31, 2016:

	February 29, 2016			May 31, 2016
2014 Credit Agreement debt :
Revolver	$	3,000		$	9,000
Term Loan	181,762			176,580
Total 2014 Credit Agreement debt	184,762			185,580
98.7FM non-recourse debt	65,411			64,103
Digonex non-recourse debt (1)	4,714			4,900
Less: Current maturities	(17,573		)	(14,832		)
Less: Unamortized original issue discount	(9,287		)	(8,860		)
Total long-term debt	$	228,027		$	230,891

⁽¹⁾ The face value of Digonex non-recourse debt is $6.2 million

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.

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; $109.0 million was disbursed to the Borrower (the “Initial Proceeds”) and the remaining $76.0 million was funded into escrow (the “Subsequent Acquisition Proceeds”).

The Initial Proceeds, coupled with $13.0 million of revolving credit facility borrowings, were used by the Borrower on June 10, 2014 to repay all amounts outstanding under the 2012 Credit Agreement, to make a $55.0 million initial payment associated with our acquisition of WBLS-FM and WLIB-AM, and to pay fees and expenses. The Subsequent Acquisition Proceeds were used to make the final $76.0 million payment related to the acquisition of WBLS-FM and WLIB-AM on February 13, 2015.

The Term Loan is due not later than June 10, 2021 and initially amortized in an amount equal to 1% per annum (subsequently amended, see below) of the original principal amount of the Term Loan, payable in quarterly installments commencing April 1, 2015, with the balance payable on the maturity date. The revolving credit facility expires not later than June 10, 2019. An unused commitment fee of 50 basis points per annum will be payable quarterly on the average unused

-18-

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 $9.3 million and $8.9 million as of February 29, 2016 and May 31, 2016, respectively, is being amortized as additional interest expense over the life of the 2014 Credit Agreement.

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) increases 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 reverts to the original ratio of 4.00:1.00 for the quarters ended May 31, 2017 and thereafter, (ii) requires Emmis to pay a 2.00% fee on certain prepayments of the Term Loan prior to the first anniversary of the Second Amendment and requires 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) increases 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) increases 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.

We were in compliance with all financial and non-financial covenants as of May 31, 2016. Our Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2014 Credit Agreement) requirements and actual amounts as of May 31, 2016 were as follows:

	As of May 31, 2016
	Covenant Requirement	Actual Results
Maximum Total Leverage Ratio	6.50 : 1.00	5.43 : 1.00
Minimum Interest Coverage Ratio	2.00 : 1.00	2.46 : 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%.

-19-

Digonex 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. The notes payable mature on December 31, 2017 and accrue interest at 5.0% per annum. Interest is 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.

Based on amounts outstanding at May 31, 2016, mandatory principal payments of long-term debt for the next five

years and thereafter are summarized below:

Year Ended	2014 Credit Agreement						Digonex		Total
February 28 (29),	Revolver		Term Loan		98.7FM Debt		Notes payable		Payments
2017	$	—	$	6,938	$	4,146	$	—	$	11,084
2018	—		9,250		6,039		6,199		21,488
2019	—		9,250		6,587		—		15,837
2020	9,000		9,250		7,150		—		25,400
2021	—		9,250		7,756		—		17,006
Thereafter	—		132,642		32,425		—		165,067
Total	$	9,000	$	176,580	$	64,103	$	6,199	$	255,882

Note 5. Liquidity

The Company continually projects its anticipated cash needs, which include its operating needs, capital needs, and principal and interest payments on its indebtedness. As of the filing of this Form 10-Q, management believes the Company can meet its liquidity needs through the end of fiscal year 2017 with cash and cash equivalents on hand and projected cash flows from operations. Based on these projections, management also believes the Company will be in compliance with its debt covenants through the end of fiscal year 2017.

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 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 29, 2016 and May 31, 2016. 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.

-20-

	As of May 31, 2016
	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 29, 2016
	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.

The following table shows a reconciliation of the beginning and ending balances for fair value measurements using significant unobservable inputs:

	For the Three Months Ended May 31,
	2015		2016
	Available For Sale Securities		Available For Sale Securities
Beginning Balance	$	500	$	800
Purchases	—		—
Ending Balance	$	500	$	800

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

-21-

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 May 31, 2016, the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $160.5 million and $185.6 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 Digonex 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 are 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 29, 2016, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments.

Three Months Ended May 31, 2016	Radio		Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	42,699		13,092			211			$	56,002
Station operating expenses excluding depreciation and amortization expense	27,275		13,478			2,236			42,989
Corporate expenses excluding depreciation and amortization expense	—		—			3,044			3,044
Depreciation and amortization	907		73			352			1,332
Operating income (loss)	$	14,517	$	(459	)	$	(5,421	)	$	8,637

Three Months Ended May 31, 2015	Radio		Publishing		Corporate & Emerging Technologies			Consolidated
Net revenues	42,593		15,525		335			$	58,453
Station operating expenses excluding depreciation and amortization expense	28,693		15,209		1,641			45,543
Corporate expenses excluding depreciation and amortization expense	—		—		3,819			3,819
Depreciation and amortization	798		61		591			1,450
Operating income (loss)	$	13,102	$	255	$	(5,716	)	$	7,641

Total Assets	Radio		Publishing		Corporate & Emerging Technologies		Consolidated
As of February 29, 2016	$	271,336	$	22,060	$	23,210	$	316,606
As of May 31, 2016	$	275,300	$	20,241	$	23,108	$	318,649

-22-

Note 8. Regulatory, Legal and Other Matters

Emmis is a party to various 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.

On July 7, 2014, individuals who had been seeking to overturn the FCC’s approval of the transfer of the broadcast licenses for WBLS-FM and WLIB-AM from entities associated with Inner City Broadcasting to YMF (the entities that subsequently sold the two stations to Emmis) filed with the U.S. Court of Appeals for the District of Columbia Circuit a Notice of Appeal of the FCC’s approval of the transfer. The U.S. Court of Appeals for the District of Columbia upheld the license transfer. Additionally, in March 2015, an individual filed a lawsuit in the Federal District Court of New York challenging the transfer of the assets of WBLS-FM and WLIB-AM from Inner City to YMF, and claimed that Emmis had exerted undue influence in securing the FCC's consent to the transfer of the FCC licenses of WBLS-FM and WLIB-AM from YMF to Emmis. Based upon the facts alleged in the cases and the extensive precedent of courts not overturning FCC approvals of transfers of broadcast licenses except in exceedingly rare circumstances, Emmis believes the appeal and the claims in the lawsuit are without merit.

Note 9. Income Taxes

Our effective income tax rate was 17% for the three-month period ended May 31, 2016. 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. The provision associated with deferred tax liabilities related to indefinite-lived intangibles is estimated to be approximately $2.5 million for the year ending February 28, 2017.

Note 10. Other Significant Events

On March 17, 2016, The Nasdaq Stock Market LLC ("Nasdaq") filed with the United States Securities and Exchange Commission Form 25-NSE to formally delist the Company's Preferred Stock from the Nasdaq Global Select Market (formerly listed under the symbol "EMMSP"). The delisting occurred on March 28, 2016. Pursuant to the Company's articles of incorporation, each outstanding share of Preferred Stock was automatically converted on April 4, 2016, into the Company's Class A common stock at a ratio of 2.80 shares of Class A common stock for each share of Preferred Stock.

On both March 1, 2016 and June 7, 2016, Emmis contributed an additional $0.5 million to Digonex in the form of convertible debt. Emmis currently owns rights that are convertible into at least 78% of the common equity of Digonex.

Note 11. Subsequent Event

On December 7, 2015, the Company received a notification from the Listing Qualifications Department of Nasdaq indicating that the Company's Class A common stock was not in compliance with Markeplace Rule 5450(a)(1) (the “Minimum Bid Price Rule”) because the minimum bid price of the Company's Class A common stock on the Nasdaq Global Select Market closed below $1.00 per share for 30 consecutive business days. In accordance with Marketplace Rules 5810(c)(3)(A), the Company had 180 calendar days, or until June 6, 2016, for our Class A common stock to regain compliance with the Minimum Bid Price Rule. During the 180 day period, the Company’s Class A common stock continued to trade on the Nasdaq Global Select Market. On June 7, 2016, the Company received a written notification (the "Staff Determination")from Nasdaq stating that because the Company had not regained compliance with the $1.00 minimum bid price requirement for continued listing, the Company’s Class A common stock (listed on The Nasdaq Global Select Market under the symbol “EMMS”) would be subject to delisting unless the Company requested a hearing before a Nasdaq Hearings Panel (the "Panel") on or before June 14, 2016.

The Company requested a hearing before the Panel, which stayed any delisting action in connection with the Staff Determination and allowed the continued listing of the Company’s Class A common stock on The Nasdaq Global Select Market until the Panel renders a decision subsequent to the hearing. At the hearing, the Company intends to present a plan to regain compliance with Rule 5450(a)(1) and request that the Panel allow the Company additional time within which to regain compliance. The Company believes that it will be able to present a viable plan to regain compliance because our shareholders are scheduled to vote upon a proposed amendment to our articles of incorporation to permit a one-for-four reverse stock split at our annual meeting on July 7, 2016 and we have already received sufficient votes for the proposal’s adoption. Upon receipt of formal shareholder approval, the reverse stock split is expected to be implemented effective upon the commencement of trading on July 8, 2016. Thus, the Company expects that our Class A common stock will have been trading above $1.00 for ten consecutive trading days on July 21, 2016, the date of our Nasdaq hearing.

-23-

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 29, 2016.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 are a diversified media company. We own and operate radio and publishing properties located in the United States. Our revenues are mostly affected by the advertising rates our entities charge, as advertising sales represent approximately 70% 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 periods ended May 31, 2015 and 2016. 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.

-24-

	Three Months Ended May 31,
	2015		% of Total		2016		% of Total
Net revenues:
Local	$	34,155	58.4	%	$	33,018	59.0	%
National	7,499		12.8	%	5,719		10.2	%
Political	164		0.3	%	860		1.5	%
Publication Sales	1,399		2.4	%	1,383		2.5	%
Non Traditional	4,880		8.3	%	4,114		7.3	%
LMA Fees	2,583		4.4	%	2,583		4.6	%
Digital	3,285		5.6	%	4,057		7.2	%
Other	4,488		7.8	%	4,268		7.7	%
Total net revenues	$	58,453			$	56,002

As previously mentioned, we derive approximately 70% of our net revenues from advertising sales. In the three-month period ended May 31, 2016, local sales, excluding political revenues, represented approximately 85% and 87% of our advertising revenues for our radio and publishing divisions, respectively.

No customer represents more than 10% of our consolidated net revenues. Our top ten categories for radio represent approximately 61% and 59% of our radio division’s total advertising net revenues for the three-month periods ended May 31, 2015 and 2016, respectively. The automotive industry was the largest category for our radio division for the three-month periods ended May 31, 2015 and 2016, representing approximately 13% of our radio net revenues.

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.

KNOWN TRENDS AND UNCERTAINTIES

Although advertising revenues have stabilized following the 2008 economic recession, radio revenue growth remains challenged. 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 and streaming radio 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 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.

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 in 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 collects money from the radio industry and forwards it to Sprint. During the three months ended May 31, 2015, Emmis' funding of its share of NextRadio's payment to

-25-

Sprint was $0.1 million. This amount is included in station operating expenses in the accompanying condensed consolidated statements of operations. Emmis had fully funded its share of NextRadio's payment to Sprint as of February 29, 2016. 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 May 31, 2016, the NextRadio application had not generated a material amount of revenue.

Since the inception of NextRadio LLC's agreement with Sprint, NextRadio LLC has remitted to Sprint approximately $32.0 million through May 31, 2016. NextRadio LLC is currently in arrears with Sprint, but is in discussions with radio broadcasters and other companies involved in the radio industry to fund the remaining $13.0 million due to Sprint.

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. In August 2015, T-Mobile expressed its intent to include FM chip activation in its device specifications. TagStation LLC (the parent entity of NextRadio LLC and owner of the TagStation and NextRadio applications) and T-Mobile are working together to formalize this business relationship. Both AT&T and T-Mobile currently support NextRadio in the Samsung Galaxy S7 and S7 Edge smartphones operating on their networks. BLU Products, an American mobile phone manufacturer, has chosen to make NextRadio the native FM tuner on its Android smartphones. In April 2016, Alcatel entered into a similar arrangement for NextRadio. 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.

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 2017 or 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. 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 becoming one of the largest streaming audio providers in the United States, developing highly interactive websites with content that engages our listeners, using SMS texting and deploying mobile applications, 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 and Los Angeles markets. These markets account for approximately 50% 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 our single station in the Los Angeles market, KPWR-FM, has less ability to adapt. Furthermore, some of our competitors that operate larger station clusters in New York and Los Angeles 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 and may be able to realize operating efficiencies by programming multiple stations in these markets. In February 2015, one of our large competitors changed the format of one of its radio stations in the Los Angeles radio market to more directly compete with our radio station in Los Angeles. In addition, the new station hired our former KPWR-FM morning radio host to be its morning radio host. This development in Los Angeles negatively impacted our financial performance in fiscal 2016 as well as the first quarter of fiscal 2017. We expect this to continue through the second quarter of fiscal 2017 and possibly beyond.

Both the Los Angeles and New York radio markets showed signs of improvement, up 3.2% and 4.1%, respectively, for the three months ended May 31, 2016 as compared to the same period of the prior year, according to Miller Kaplan Arase LLP, an independent public accounting firm used by the radio industry to compile revenue information. During the same period, KPWR-FM in Los Angeles lagged the Los Angeles radio market due to the introduction of a new format competitor, as discussed above. Our New York cluster, which includes WQHT-FM, WBLS-FM and WLIB-AM, outperformed the New York

-26-

radio market. We made several leadership changes in New York in January 2016, and financial performance in fiscal 2017 has improved.

As part of our business strategy, we continually evaluate potential acquisitions of radio stations, publishing properties 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.

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.

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 May 31, 2016, we have recorded approximately $219.8 million in goodwill and FCC licenses, which represents approximately 69% 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

-27-

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.

Valuation of Goodwill

ASC Topic 350 requires the Company to test goodwill for impairment at least annually using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. The Company conducts the two-step 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 uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units (radio stations grouped by market, excluding any stations being operated pursuant to an LMA, and magazines on an individual basis). 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. There are no publicly traded publishing companies that are focused predominantly on city and regional magazines as is our publishing segment. Therefore, the market multiple used as a benchmark for our publishing reporting units is based on recently completed transactions within the city and regional magazine industry or analyst reports that include valuations of magazine divisions within publicly traded media conglomerates. Management believes this methodology for valuing radio and publishing 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 step-one reporting unit 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.

This enterprise valuation is compared to the carrying value of the reporting unit for the first step of the goodwill impairment test. If the reporting unit exhibits impairment, the Company proceeds to the second step of the goodwill impairment test. For its step-two testing, the enterprise value is allocated among the tangible assets, indefinite-lived intangible assets (FCC licenses valued using a direct-method valuation approach) and unrecognized intangible assets, such as customer lists, with the residual amount representing the implied fair value of the goodwill. To the extent the carrying amount of the goodwill exceeds the implied fair value of the goodwill, the difference is recorded as an impairment charge 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 $0.7 million and $0.6 million accrued for employee healthcare claims as of February 29, 2016 and May 31, 2016, respectively. The Company also maintains large deductible programs (ranging from $100 thousand to $250 thousand per occurrence) for workers’ compensation, employment liability, automotive liability and media liability claims.

-28-

Results of Operations for the Three-month Period Ended May 31, 2016, Compared to May 31, 2015

Net revenues:

	For the Three Months Ended May 31,
	2015		2016		$ Change			% Change
	(As reported, amounts in thousands)
Net revenues:
Radio	$	42,593	$	42,699	$	106		0.2	%
Publishing	15,525		13,092		(2,433		)	(15.7	)%
Emerging Technologies	335		211		(124		)	(37.0	)%
Total net revenues	$	58,453	$	56,002	$	(2,451	)	(4.2	)%

Radio net revenues were up slightly for the three-month period ended May 31, 2016. 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 3.1% for the three-month period ended May 31, 2016 as compared to the same period of the prior year. Our gross revenues were flat for the three-month period ended May 31, 2016 as compared to the same period of the prior year. For the three-month period ended May 31, 2016, our performance exceeded the market average in New York, Indianapolis and St. Louis, but we lagged the market average in Los Angeles and Austin. Miller Kaplan does not report gross revenue market data for our Terre Haute market.

Our weak performance in Los Angeles mostly related to a format competitor that began directly competing against our station there in February 2015. The revenue impact was most pronounced in the second half of fiscal 2016. Emmis expects this weakness to persist through our second quarter in fiscal 2017. However, Emmis expects these declines to abate beginning in the third quarter of fiscal 2017. Excluding Los Angeles, our radio revenues would have been up 5.0% in markets that were up 2.9% according to Miller Kaplan.

For the three-month period ended May 31, 2016, as compared to the same period of the prior year, our average rate per minute for our domestic radio stations was up 1.4%, and our minutes sold were down 2.6%.

Publishing net revenues decreased during the three-month period ended May 31, 2016. A portion of this revenue decline relates to the timing of certain ancillary publications that were published during the three-month period ended May 31, 2015 in the prior year, but will be published after the first quarter in fiscal 2017. Also, we have seen general weakness in advertising demand for Texas Monthly and Los Angeles Magazine, our two largest publications.

Emerging technologies net revenues, which primarily relates to licensing fees of our TagStation software and pricing services provided by Digonex, decreased during the three-month period ended May 31, 2016. This decrease relates to Digonex, as a large retail customer did not renew for 2016.

Station operating expenses excluding depreciation and amortization expense:

	For the Three Months Ended May 31,
	2015		2016		$ Change			% Change
	(As reported, amounts in thousands)
Station operating expenses excluding depreciation and amortization expense:
Radio	$	28,693	$	27,275	$	(1,418	)	(4.9	)%
Publishing	15,209		13,478		(1,731		)	(11.4	)%
Emerging Technologies	1,641		2,236		595			36.3	%
Total station operating expenses excluding depreciation and amortization expense	$	45,543	$	42,989	$	(2,554	)	(5.6	)%

-29-

The decrease in station operating expenses excluding depreciation and amortization expense for our radio division for the three-month period ended May 31, 2016 is mostly due to savings realized from the cost reduction plan that the Company implemented in January 2016 and the nonrecurring nature of legal expenses the Company incurred in Los Angeles in the prior year associated with litigation against a former radio morning host.

Station operating expenses excluding depreciation and amortization expense for publishing decreased during the three-month period ended May 31, 2016 due to savings realized from the cost reduction plan that the Company implemented in January 2016, lower commission and revenue-related costs as a result of lower net revenues and lower production costs related to ancillary publications that were produced during the three-month period ended May 31, 2015 in the prior year, but will be produced later in the fiscal year in fiscal 2017.

Station operating expenses excluding depreciation and amortization expense for emerging technologies increased during the three-month period ended May 31, 2016 mostly due to costs associated with enhancements to the NextRadio application and additional personnel costs for TagStation and NextRadio in anticipation of increased activity in fiscal 2017.

Corporate expenses excluding depreciation and amortization expense:

	For the Three Months Ended May 31,
	2015		2016		$ Change			% Change
	(As reported, amounts in thousands)
Corporate expenses excluding depreciation and amortization expense	$	3,819	$	3,044	$	(775	)	(20.3	)%

Corporate expenses excluding depreciation and amortization expense decreased during the three-month period ended May 31, 2016 mostly due to savings realized from the cost reduction plan implemented in January 2016, which includes a voluntary 5% reduction in salary for all of our executive officers.

Depreciation and amortization:

	For the Three Months Ended May 31,
	2015		2016		$ Change			% Change
	(As reported, amounts in thousands)
Depreciation and amortization:
Radio	$	798	$	907	$	109		13.7	%
Publishing	61		73		12			19.7	%
Corporate & Emerging Technologies	591		352		(239		)	(40.4	)%
Total depreciation and amortization	$	1,450	$	1,332	$	(118	)	(8.1	)%

The increase in radio depreciation and amortization expense is mostly related to depreciation of broadcasting equipment and other equipment placed into service in the latter portion of the prior fiscal year. The decrease in corporate & emerging technologies is mostly due to reduced amortization expense of Digonex-related intangible assets. In connection with our annual review of the carrying value of our intangible assets in December 2015, the Company recorded an impairment charge of approximately $3.4 million related to Digonex's definite-lived intangible assets. This impairment charge reduced the carrying value of the definite-lived intangible assets, and thus reduced amortization for the remainder of the definite-lived intangible assets' useful life.

-30-

Operating income:

	For the Three Months Ended May 31,
	2015			2016			$ Change			% Change
	(As reported, amounts in thousands)
Operating income:
Radio	$	13,102		$	14,517		$	1,415		10.8	%
Publishing	255			(459		)	(714		)	(280.0	)%
Corporate & Emerging Technologies	(5,716		)	(5,421		)	295			5.2	%
Total operating income:	$	7,641		$	8,637		$	996		13.0	%

Radio operating income increased in the three-month period ended May 31, 2016 mostly due to lower operating expenses excluding depreciation and amortization expense as a result of the cost reduction plan the Company implemented in January 2016.

Publishing operating income decreased during the three-month period ended May 31, 2016 mostly due to net revenue declines, as previously discussed, partially offset by lower operating expenses excluding depreciation and amortization expense as a result of the cost reduction plan the Company implemented in January 2016.

Corporate and emerging technologies operating loss decreased during the three-month period ended May 31, 2016 due to a reduction in corporate expenses as a result of our cost reduction plan implemented in Janaury 2016. These cost savings were partially offset by a decline in revenues for Digonex and an increase in TagStation and NextRadio operating expenses in anticipation of greater activity for those businesses in fiscal 2017.

Interest expense:

	For the Three Months Ended May 31,
	2015			2016			$ Change			% Change
	(As reported, amounts in thousands)
Interest expense	$	(4,546	)	$	(4,690	)	$	(144	)	3.2	%

Interest expense was up slightly for the three-month period ended May 31, 2016. Although our overall long-term debt balance declined from the prior year, the rate we pay on amounts borrowed under the Credit Agreement increased in connection with the April 30, 2015 Second Amendment. The weighted-average interest rate of debt outstanding under our 2014 Credit Agreement was 7.0% at May 31, 2016.

Provision for income taxes:

	For the Three Months Ended May 31,
	2015		2016		$ Change			% Change
	(As reported, amounts in thousands)
Provision for income taxes	$	947	$	675	$	(272	)	(28.7	)%

The Company records 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. The provision associated with deferred tax liabilities related to indefinite-lived intangibles is estimated to be approximately $2.5 million for the year ending February 28, 2017.

-31-

Consolidated net income:

	For the Three Months Ended May 31,
	2015		2016		$ Change		% Change
	(As reported, amounts in thousands)
Consolidated net income	$	2,158	$	3,315	$	1,157	53.6	%

Consolidated net income for the three-month period ended May 31, 2016 increased mostly due to higher operating income as a result of costs reductions implemented in January 2016.

Liquidity and Capital Resources

Our primary sources of liquidity are cash provided by operations and cash available through revolver borrowings under our 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.

At May 31, 2016, we had cash and cash equivalents of $4.3 million and net working capital of $7.0 million. At February 29, 2016, we had cash and cash equivalents of $4.5 million and net working capital of $0.4 million. The Company continually projects its anticipated cash needs, which include its operating needs, capital needs, and principal and interest payments on its indebtedness. As of the filing of this Form 10-Q, management believes the Company can meet its liquidity needs through the end of fiscal year 2017 with cash and cash equivalents on hand and projected cash flows from operations. Based on these projections, management also believes the Company will be in compliance with its debt covenants through the end of fiscal year 2017.

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

On December 7, 2015, the Company received a notification from the Listing Qualifications Department of Nasdaq indicating that the Company's Class A common stock was not in compliance with Markeplace Rule 5450(a)(1) (the “Minimum Bid Price Rule”) because the minimum bid price of the Company's Class A common stock on the Nasdaq Global Select Market closed below $1.00 per share for 30 consecutive business days. In accordance with Marketplace Rules 5810(c)(3)(A), the Company had 180 calendar days, or until June 6, 2016, for our Class A common stock to regain compliance with the Minimum Bid Price Rule. During the 180 day period, the Company’s Class A common stock continued to trade on the Nasdaq Global Select Market. On June 7, 2016, the Company received a written notification (the "Staff Determination")from Nasdaq stating that because the Company had not regained compliance with the $1.00 minimum bid price requirement for continued listing, the Company’s Class A common stock (listed on The Nasdaq Global Select Market under the symbol “EMMS”) would be subject to delisting unless the Company requested a hearing before a Nasdaq Hearings Panel (the "Panel") on or before June 14, 2016.

The Company requested a hearing before the Panel, which stayed any delisting action in connection with the Staff Determination and allowed the continued listing of the Company’s Class A common stock on The Nasdaq Global Select Market until the Panel renders a decision subsequent to the hearing. At the hearing, the Company intends to present a plan to regain compliance with Rule 5450(a)(1) and request that the Panel allow the Company additional time within which to regain compliance. The Company believes that it will be able to present a viable plan to regain compliance because our shareholders are scheduled to vote upon a proposed amendment to our articles of incorporation to permit a one-for-four reverse stock split at our annual meeting on July 7, 2016 and we have already received sufficient votes for the proposal’s adoption. Upon receipt of formal shareholder approval, the reverse stock split is expected to be implemented effective upon the commencement of trading on July 8, 2016. Thus, the Company expects that our Class A common stock will have been trading above $1.00 for ten consecutive trading days on July 21, 2016, the date of our Nasdaq hearing.

Operating Activities

Cash provided by operating activities was $1.7 million and $2.1 million for the three months ended May 31, 2015 and 2016, respectively. The increase in cash provided by operating activities is mostly due to the increase in operating income as previously discussed.

-32-

Investing Activities

Cash used in investing activities was $0.4 million for the three months ended May 31, 2015 and 2016. Cash used in investing activities during both periods consisted primarily of capital expenditures. We expect capital expenditures to be approximately $3.5 million in the current fiscal year, compared to $3.4 million in fiscal 2016. 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 $1.7 million and $1.9 million for the three months ended May 31, 2015 and 2016, respectively. During the three months ended May 31, 2015, cash used in financing activities related to $1.6 million of distributions paid to noncontrolling interests, $1.1 million of debt-related costs and $0.3 million of tax withholding settlements on stock issued to employees. Partially offsetting these uses of cash in the prior year were net debt borrowings of $1.3 million. During the three months ended May 31, 2016, cash used in financing activities related to $1.2 million of distributions paid to noncontrolling interests, $0.5 million of net debt payments and $0.2 million of tax withholding settlements on stock issued to employees.

As of May 31, 2016, Emmis had $185.6 million of borrowings under the 2014 Credit Agreement and $70.3 million ($64.1 million related to 98.7FM in New York and $6.2 million related to Digonex) 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 May 31, 2016, our weighted average borrowing rate under our 2014 Credit Agreement was approximately 7.0%. The non-recourse debt related to 98.7FM in New York bears interest at 4.1% per annum and the non-recourse debt related to Digonex bears interest at 5.0% per annum.

The debt service requirements of Emmis over the next twelve-month period are expected to be $22.2 million related to our 2014 Credit Agreement, as amended, ($9.3 million of principal repayments and $12.9 million of interest payments) and $8.1 million related to our 98.7FM non-recourse debt ($5.6 million of principal repayments and $2.5 million of interest payments). There are no debt service requirements of our Digonex non-recourse debt until the debt matures in December 2017. 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 May 31, 2016 and the weighted average interest rate as of the same date.

At July 1, 2016, we had $7.0 million available for additional borrowing under our credit agreement. No letters of credit were outstanding. Availability under the credit agreement depends upon our continued compliance with certain operating covenants and financial ratios. Emmis was in compliance with these covenants as of May 31, 2016. As part of our business strategy, we continually evaluate potential acquisitions of radio stations, publishing properties and other businesses that we believe hold promise for long-term appreciation in value and leverage our strengths. However, the 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.

Intangibles

As of May 31, 2016, approximately 69% 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

Emmis is a party to various 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.

On July 7, 2014, individuals who had been seeking to overturn the FCC’s approval of the transfer of the broadcast licenses for WBLS-FM and WLIB-AM from entities associated with Inner City Broadcasting to YMF (the entities that

-33-

subsequently sold the two stations to Emmis) filed with the U.S. Court of Appeals for the District of Columbia Circuit a Notice of Appeal of the FCC’s approval of the transfer. The U.S. Court of Appeals for the District of Columbia upheld the license transfer. Additionally, in March 2015, an individual filed a lawsuit in the Federal District Court of New York challenging the transfer of the assets of WBLS-FM and WLIB-AM from Inner City to YMF, and claimed that Emmis had exerted undue influence in securing the FCC's consent to the transfer of the FCC licenses of WBLS-FM and WLIB-AM from YMF to Emmis. Based upon the facts alleged in the cases and the extensive precedent of courts not overturning FCC approvals of transfers of broadcast licenses except in exceedingly rare circumstances, Emmis believes the appeal and the claims in the lawsuit are without merit.

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 May 31, 2016 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.

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.

-34-

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

During the three months ended May 31, 2016, 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 May 31, 2016:

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
March 1, 2016 - March 31, 2016	159,767	$	0.54	—	$	—
April 1, 2016 - April 30, 2016	—	$	—	—	$	—
May 1, 2016 - May 31, 2016	160,948	$	0.52	—	$	—
	320,715			—

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 February 17, 2016		10-K	2/29/2016	3.1	5/5/2016
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
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

-35-

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: July 7, 2016	By:	/s/ RYAN A. HORNADAY
		Ryan A. Hornaday
		Executive Vice President, Chief Financial Officer and Treasurer

-36-

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: July 7, 2016
	/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: July 7, 2016
	/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 May 31, 2016, 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: July 7, 2016
	/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 May 31, 2016, 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: July 7, 2016
	/s/ RYAN A. HORNADAY
	Ryan A. Hornaday
	Executive Vice President, Chief Financial Officer and
	Treasurer

XML

Document and Entity Information - shares	3 Months Ended
	May 31, 2016	Jul. 01, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 31, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
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		44,142,662
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		4,569,464
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
	May 31, 2016	May 31, 2015
NET REVENUES	$ 56,002	$ 58,453
OPERATING EXPENSES:
Station operating expenses excluding depreciation and amortization expense of $1,132 and $1,110, respectively	42,989	45,543
Corporate expenses excluding depreciation and amortization expense of $318 and $222, respectively	3,044	3,819
Depreciation and amortization	1,332	1,450
Total operating expenses	47,365	50,812
Operating income (loss)	8,637	7,641
OTHER EXPENSE:
Interest expense	(4,690)	(4,546)
Other income, net	43	10
Total other expense	(4,647)	(4,536)
INCOME BEFORE INCOME TAXES	3,990	3,105
PROVISION FOR INCOME TAXES	675	947
CONSOLIDATED NET INCOME	3,315	2,158
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	629	633
NET INCOME ATTRIBUTABLE TO THE COMPANY	$ 2,686	$ 1,525
NET INCOME PER SHARE - BASIC	$ 0.06	$ 0.04
NET INCOME PER SHARE - DILUTED	$ 0.06	$ 0.03
Basic weighted average common shares outstanding	47,070	43,217
Diluted weighted average common shares outstanding	47,295	47,373

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	May 31, 2015
Depreciation and amortization expense excluded from station operating expenses	$ 1,110	$ 1,132
Depreciation and amortization expenses excluded from corporate expenses	$ 222	$ 318

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	May 31, 2015
CONSOLIDATED NET INCOME	$ 3,315	$ 2,158
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAXES:
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	629	633
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$ 2,686	$ 1,525

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	May 31, 2016	Feb. 29, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 4,284	$ 4,456
Restricted cash	1,747	1,464
Accounts receivable, net	36,962	34,906
Prepaid expenses	9,309	7,413
Other current assets	2,129	3,452
Total current assets	54,431	51,691
PROPERTY AND EQUIPMENT, NET	33,136	33,843
INTANGIBLE ASSETS (NOTE 3):
Indefinite-lived intangibles	205,129	205,129
Goodwill	14,697	14,697
Other intangibles, net	3,074	3,299
Total intangible assets	222,900	223,125
OTHER ASSETS, NET	8,182	7,947
Total assets	318,649	316,606
CURRENT LIABILITIES:
Accounts payable and accrued expenses	7,846	8,127
Current maturities of long-term debt (Note 4)	14,832	17,573
Accrued salaries and commissions	6,123	8,375
Deferred revenue	12,912	11,435
Other current liabilities	5,679	5,775
Total current liabilities	47,392	51,285
LONG-TERM DEBT, NET OF CURRENT MATURITIES (NOTE 4)	230,891	228,027
OTHER NONCURRENT LIABILITIES	7,367	7,728
DEFERRED INCOME TAXES	44,349	43,715
Total liabilities	329,999	330,755
COMMITMENTS AND CONTINGENCIES
DEFICIT:
Additional paid-in capital	590,138	589,483
Accumulated deficit	(639,814)	(642,500)
Total shareholders’ deficit	(49,189)	(52,546)
NONCONTROLLING INTERESTS	37,839	38,397
Total deficit	(11,350)	(14,149)
Total liabilities and deficit	318,649	316,606
Class A common stock, $.01 par value; authorized 170,000,000 shares; issued and outstanding 41,609,601 shares at February 29, 2016 and 44,142,662 shares at May 31, 2016
DEFICIT:
Common Stock	441	416
Class B common stock, $.01 par value; authorized 30,000,000 shares; issued and outstanding 4,569,464 shares at February 29, 2016 and May 31, 2016
DEFICIT:
Common Stock	46	46
Series A Preferred Stock
DEFICIT:
Preferred Stock	$ 0	$ 9

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	May 31, 2016	Feb. 29, 2016
Class A Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	170,000,000	170,000,000
Common stock, shares issued	44,142,662	41,609,601
Common stock, shares outstanding	44,142,662	41,609,601
Class B Common Stock
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	4,569,464	4,569,464
Common stock, shares outstanding	4,569,464	4,569,464
Series A Preferred Stock
Series A non-cumulative convertible preferred stock, par value	$ 0.01	$ 0.01
Series A non-cumulative convertible preferred stock, liquidation preference	$ 50.00	$ 50.00
Series A non-cumulative convertible preferred stock, aggregate liquidation preference and redemption amount	$ 0	$ 43,316
Series A non-cumulative convertible preferred stock, shares authorized	2,875,000	2,875,000
Series A non-cumulative convertible preferred stock, shares issued	0	866,319
Series A non-cumulative convertible preferred stock, shares outstanding	0	866,319

XML

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 3 months ended May 31, 2016 - USD ($) $ in Thousands	Total	Class A Common Stock	Class B Common Stock	Series A Preferred Stock	Additional Paid-in Capital	Accumulated Deficit	Noncontrolling Interests
Beginning Balance at Feb. 29, 2016	$ (14,149)	$ 416	$ 46	$ 9	$ 589,483	$ (642,500)	$ 38,397
Beginning Balance (in shares) at Feb. 29, 2016		41,609,601	4,569,464	866,319
Net income	3,315					2,686	629
Issuance of common stock to employees and officers	656	$ 1			655
Issuance of common stock to employees and officers (in shares)		107,369
Distributions to noncontrolling interests	(1,187)						(1,187)
Conversion of Series A Preferred Stock to Class A Common Stock	15	$ 24		$ (9)
Conversion of Series A Preferred Stock to Class A Common Stock (in shares)		2,425,692		(866,319)
Ending Balance at May. 31, 2016	$ (11,350)	$ 441	$ 46	$ 0	$ 590,138	$ (639,814)	$ 37,839
Ending Balance (in shares) at May. 31, 2016		44,142,662	4,569,464	0

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	May 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$ 3,315	$ 2,158
Adjustments to reconcile consolidated net income to net cash provided by operating activities -
Depreciation and amortization	1,332	1,450
Amortization of debt discount	427	395
Noncash accretion of debt	186	186
Provision for (recovery of) bad debts	(36)	60
Provision for deferred income taxes	634	841
Noncash compensation	856	2,104
Loss on disposal of assets	(2)	0
Changes in assets and liabilities -
Restricted cash	283	(454)
Accounts receivable	(2,020)	(1,924)
Prepaid expenses and other current assets	(573)	(228)
Other assets	(258)	(202)
Accounts payable and accrued liabilities	(2,533)	(3,259)
Deferred revenue	1,477	1,171
Income taxes	(124)	(97)
Other liabilities	(333)	(1,420)
Net cash provided by operating activities	2,069	1,689
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(402)	(421)
Other	23	23
Net cash used in investing activities	(379)	(398)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt	(7,490)	(1,656)
Proceeds from long-term debt	7,000	3,000
Debt-related costs	0	(1,134)
Distributions to noncontrolling interests	(1,187)	(1,636)
Proceeds from the exercise of stock options	0	54
Settlement of tax withholding obligations on stock issued to employees	(185)	(318)
Net cash used in financing activities	(1,862)	(1,690)
DECREASE IN CASH AND CASH EQUIVALENTS	(172)	(399)
CASH AND CASH EQUIVALENTS:
Beginning of period	4,456	3,669
End of period	4,284	3,270
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	3,866	4,321
Cash paid for income taxes, net	116	216
Noncash financing transactions -
Stock issued to employees and directors	$ 840	$ 1,432

XML

Summary of Significant Accounting Policies

3 Months Ended

May 31, 2016

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 29, 2016. 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 May 31, 2016, and the results of its operations and cash flows for the three-month periods ended May 31, 2015 and 2016.

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 29, 2016 that have had a material impact on our condensed consolidated financial statements and related notes.

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 May 31, 2015 and 2016 consisted of stock options and restricted stock awards. Potentially dilutive securities at May 31, 2015 also included Series A non-cumulative convertible preferred stock (the “Preferred Stock”). All shares of Preferred Stock were converted into Class A common stock during the three months ended May 31, 2016. See Note 10 for more discussion of the conversion of Preferred Stock. The following table sets forth the calculation of basic and diluted net income per share:

	For the three months ended
	May 31, 2015					May 31, 2016
	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	$	1,525	43,217	$	0.04	$	2,686	47,070	$	0.06
Impact of equity awards	—		1,890	—		—		225	—
Impact of conversion of preferred stock into common stock	—		2,266	—		—		—	—
Diluted net income per common share:
Net income available to common shareholders	$	1,525	47,373	$	0.03	$	2,686	47,295	$	0.06

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  May 31,
	2015	2016
	(shares in 000’s )
Equity awards	3,592	8,208
Antidilutive common share equivalents	3,592	8,208

Local Programming and Marketing Agreement Fees

The Company from time to time enters into local programming and marketing agreements (“LMAs”) in connection with acquisitions or dispositions of radio stations, often pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses. 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 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 May 31,
	2015		2016
	(amounts in 000's)
Net revenues	$	2,583	$	2,583
Station operating expenses, excluding depreciation and amortization expense	257		251
Interest expense	780		728

Assets and liabilities of 98.7FM as of February 29, 2016 and May 31, 2016 were as follows:

	As of February 29,		As of May 31,
	2016		2016
	(amounts in 000's)
Current assets:
Restricted cash	$	1,464	$	1,022
Prepaid expenses	545		530
Total current assets	2,009		1,552
Noncurrent assets:
Property and equipment, net	253		244
Indefinite lived intangibles	49,297		49,297
Deposits and other	5,460		5,678
Total noncurrent assets	55,010		55,219
Total assets	$	57,019	$	56,771
Current liabilities:
Accounts payable and accrued expenses	$	14	$	17
Current maturities of long-term debt	5,453		5,582
Deferred revenue	779		807
Other current liabilities	223		219
Total current liabilities	6,469		6,625
Noncurrent liabilities:
Long-term debt, net of current portion and unamortized debt discount	57,728		56,359
Total noncurrent liabilities	57,728		56,359
Total liabilities	$	64,197	$	62,984

Restricted Cash

The Company's restricted cash, included in current assets in the accompanying condensed consolidated balance sheets, totaled $1.5 million and $1.7 million as of February 29, 2016 and May 31, 2016, respectively.

The terms of our 98.7FM non-recourse notes and related agreements discussed in Note 4 restrict a portion of our cash on deposit for specific operating and financing purposes. Restricted cash related to the 98.7FM non-recourse notes and related agreements totaled $1.5 million and $1.0 million as of February 29, 2016 and May 31, 2016, respectively.

In connection with the Company's agreement with Sprint/United Management Company (“Sprint”), the Company collects cash from other participating companies in the radio industry and remits cash collected to Sprint. The entirety of cash collected but not yet remitted to Sprint classified as restricted cash as of May 31, 2016 was $0.7 million. The Company had remitted to Sprint all collected cash related to its agreement as of February 29, 2016.

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. 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.

Noncontrolling interests represents 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 three months ended May 31, 2015 and 2016:

	Austin radio partnership			Digonex			Total noncontrolling interests
Balance, February 28, 2015	$	47,883		$	(1,222	)	$	46,661
Net income (loss)	1,614			(981		)	633
Distributions to noncontrolling interests	(1,636		)	—			(1,636		)
Balance, May 31, 2015	$	47,861		$	(2,203	)	$	45,658
Balance, February 29, 2016	$	47,556		$	(9,159	)	$	38,397
Net income (loss)	1,527			(898		)	629
Distributions to noncontrolling interests	(1,187		)	—			(1,187		)
Balance, May 31, 2016	$	47,896		$	(10,057	)	$	37,839

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, 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 in the first quarter of its fiscal year ending February 28, 2019. The Company is currently evaluating the method of adoption and impact, if any, the adoption of this guidance will have on its financial position and results of operations.

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements - Going Concern - 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. ASU 2014-15 is effective for the fiscal year ending February 28, 2017, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this update is not expected to have an impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued Accounting Standards Update 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This update provides guidance as to when a company using a cloud computing service that includes a software license should capitalize and depreciate the software license. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows.

In September 2015, the FASB issued Accounting Standards Update 2015-16, Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments. This update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in the provisional amount as if the accounting had been completed at the acquisition date. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows.

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 March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) to simplify the accounting for share-based payment transactions, including the income tax consequences, and standardize certain classifications on the statement of cash flows. As permitted by ASU 2016-09, the Company chose to early adopt the provisions of this update as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows.

XML

Share Based Payments

3 Months Ended

May 31, 2016

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 three months ended May 31, 2015 and 2016:

	Three Months Ended May 31,
	2015	2016
Risk-Free Interest Rate:	1.3% - 1.4%	1.2%
Expected Dividend Yield:	0%	0%
Expected Life (Years):	4.3	4.3
Expected Volatility:	63.6% - 64.6%	58.6% - 59.6%

The following table presents a summary of the Company’s stock options outstanding at May 31, 2016, and stock option activity during the three months ended May 31, 2016 (“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	7,793,702	$	1.59
Granted	582,500	0.54
Expired	73,754	11.17
Outstanding, end of period	8,302,448	1.43		6.8	$	98
Exercisable, end of period	4,846,694	1.41		5.3	$	90

Cash received from option exercises for the three months ended May 31, 2015 was $0.1 million. The Company did not record an income tax benefit relating to the options exercised during the three months ended May 31, 2015. No options were exercised during the three months ended May 31, 2016.

The weighted average per share grant date fair value of options granted during the three months ended May 31, 2015 and 2016, was $1.05 and $0.26, respectively.

A summary of the Company’s nonvested options at May 31, 2016, and changes during the three months ended May 31, 2016, is presented below:

	Options	Weighted Average Grant Date Fair Value
Nonvested, beginning of period	3,323,253	$	0.93
Granted	582,500	0.26
Vested	449,999	1.25
Nonvested, end of period	3,455,754	0.77

There were 1.9 million shares available for future grants under the Company’s various equity plans (0.6 million shares under the 2015 Equity Compensation Plan and 1.3 million shares under other plans) at May 31, 2016, not including shares that may become available for future grants upon forfeiture, lapse or surrender for taxes. Additionally, the board of directors approved the 2016 Equity Compensation Plan on January 29, 2016. Under the 2016 Equity Compensation Plan, awards equivalent to 6.0 million shares of common stock may be granted. The 2016 Equity Compensation Plan won't become effective until it is approved by Emmis' shareholders at the annual meeting in July 2016. However, Emmis' Chairman and Chief Executive Officer, Jeffrey H. Smulyan, controls more than 50% of the vote on this matter and has informed the board of directors that he intends to vote in favor of approving the 2016 Plan.

The vesting dates of outstanding options at May 31, 2016 range from July 2016 to March 2019, and expiration dates range from March 2017 to April 2026.

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 2015 Equity Compensation Plan. The Company may also award, out of the Company’s 2015 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 May 31, 2016, and restricted stock activity during the three months ended May 31, 2016 (“Price” reflects the weighted average share price at the date of grant):

	Awards	Price
Grants outstanding, beginning of period	852,028	$	1.78
Granted	456,367	0.52
Vested (restriction lapsed)	718,867	1.05
Grants outstanding, end of period	589,528	1.69

The total grant date fair value of shares vested during the three months ended May 31, 2015 and 2016, was $1.0 million and $0.8 million, respectively.

Recognized Non-Cash Compensation Expense

The following table summarizes stock-based compensation expense recognized by the Company during the three months ended May 31, 2015 and 2016. The company did not recognize any tax benefits related to stock-based compensation during the periods presented below.

	Three Months Ended May 31,
	2015		2016
Station operating expenses	$	724	$	337
Corporate expenses	1,380		519
Stock-based compensation expense included in operating expenses	2,104		856

As of May 31, 2016, there was $1.9 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 1.6 years.

XML

Intangible Assets and Goodwill

3 Months Ended

May 31, 2016

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 $205.1 million as of February 29, 2016 and May 31, 2016. 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 quarter ended May 31, 2016, 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

ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. The Company conducts the two-step impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. During the quarter ended May 31, 2016, no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. When assessing its goodwill for impairment, the Company uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units (radio stations grouped by market and magazines on an individual basis). 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. There are no publicly traded publishing companies that are focused predominantly on city and regional magazines as is our publishing segment. Therefore, the market multiple used as a benchmark for our publishing reporting units has been based on recently completed transactions within the city and regional magazine industry or analyst reports that include valuations of magazine divisions within publicly traded media conglomerates. Management believes this methodology for valuing radio and publishing 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 step-one reporting unit 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.

This enterprise valuation is compared to the carrying value of the reporting unit for the first step of the goodwill impairment test. If the reporting unit exhibits impairment, the Company proceeds to the second step of the goodwill impairment test. For its step-two testing, the enterprise value is allocated among the tangible assets, indefinite-lived intangible assets (FCC licenses valued using a direct-method valuation approach) and unrecognized intangible assets, such as customer lists, with the residual amount representing the implied fair value of the goodwill. To the extent the carrying amount of the goodwill exceeds the implied fair value of the goodwill, the difference is recorded as an impairment charge in the statement of operations.

The following table summarizes the Company's goodwill by segment as of February 29, 2016 and May 31, 2016.

	As of February 29,		As of May 31,
	2016		2016
Radio	$	4,603	$	4,603
Publishing	8,036		8,036
Corporate & Emerging Technologies	2,058		2,058
Total Goodwill	$	14,697	$	14,697

Definite-lived intangibles

The Company’s definite-lived intangible assets consist of patents, customer lists, trademarks and a syndicated programming contract, all 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. 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 29, 2016 and May 31, 2016:

		As of February 29, 2016						As of May 31, 2016
		(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	6.7	$	1,240	$	727	$	513	$	1,240	$	762	$	478
Patents	5.3	1,815		1,141		674		1,815		1,172		643
Customer lists	1.2	1,015		543		472		1,015		629		386
Programming agreement	5.3	2,154		514		1,640		2,154		587		1,567
TOTAL		$	6,224	$	2,925	$	3,299	$	6,224	$	3,150	$	3,074

Total amortization expense from definite-lived intangibles for the three-month periods ended May 31, 2015 and 2016 was $0.4 million and $0.2 million, respectively. The following table presents the Company's estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangibles:

Year ended February 28 (29),	Expected Amortization Expense
	(in 000's)
2017	896
2018	636
2019	457
2020	457
2021	457

XML

Long-term Debt

3 Months Ended

May 31, 2016

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt

Long-term debt was comprised of the following at February 29, 2016 and May 31, 2016:

	February 29, 2016			May 31, 2016
2014 Credit Agreement debt :
Revolver	$	3,000		$	9,000
Term Loan	181,762			176,580
Total 2014 Credit Agreement debt	184,762			185,580
98.7FM non-recourse debt	65,411			64,103
Digonex non-recourse debt (1)	4,714			4,900
Less: Current maturities	(17,573		)	(14,832		)
Less: Unamortized original issue discount	(9,287		)	(8,860		)
Total long-term debt	$	228,027		$	230,891

⁽¹⁾ The face value of Digonex non-recourse debt is $6.2 million

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.

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; $109.0 million was disbursed to the Borrower (the “Initial Proceeds”) and the remaining $76.0 million was funded into escrow (the “Subsequent Acquisition Proceeds”).

The Initial Proceeds, coupled with $13.0 million of revolving credit facility borrowings, were used by the Borrower on June 10, 2014 to repay all amounts outstanding under the 2012 Credit Agreement, to make a $55.0 million initial payment associated with our acquisition of WBLS-FM and WLIB-AM, and to pay fees and expenses. The Subsequent Acquisition Proceeds were used to make the final $76.0 million payment related to the acquisition of WBLS-FM and WLIB-AM on February 13, 2015.

The Term Loan is due not later than June 10, 2021 and initially amortized in an amount equal to 1% per annum (subsequently amended, see below) of the original principal amount of the Term Loan, payable in quarterly installments commencing April 1, 2015, with the balance payable on the maturity date. The revolving credit facility expires not later than June 10, 2019. An unused commitment fee of 50 basis points per annum will be 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 $9.3 million and $8.9 million as of February 29, 2016 and May 31, 2016, respectively, is being amortized as additional interest expense over the life of the 2014 Credit Agreement.

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) increases 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 reverts to the original ratio of 4.00:1.00 for the quarters ended May 31, 2017 and thereafter, (ii) requires Emmis to pay a 2.00% fee on certain prepayments of the Term Loan prior to the first anniversary of the Second Amendment and requires 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) increases 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) increases 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.

We were in compliance with all financial and non-financial covenants as of May 31, 2016. Our Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2014 Credit Agreement) requirements and actual amounts as of May 31, 2016 were as follows:

	As of May 31, 2016
	Covenant Requirement	Actual Results
Maximum Total Leverage Ratio	6.50 : 1.00	5.43 : 1.00
Minimum Interest Coverage Ratio	2.00 : 1.00	2.46 : 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%.

Digonex 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. The notes payable mature on December 31, 2017 and accrue interest at 5.0% per annum. Interest is 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.

Based on amounts outstanding at May 31, 2016, mandatory principal payments of long-term debt for the next five

years and thereafter are summarized below:

Year Ended	2014 Credit Agreement						Digonex		Total
February 28 (29),	Revolver		Term Loan		98.7FM Debt		Notes payable		Payments
2017	$	—	$	6,938	$	4,146	$	—	$	11,084
2018	—		9,250		6,039		6,199		21,488
2019	—		9,250		6,587		—		15,837
2020	9,000		9,250		7,150		—		25,400
2021	—		9,250		7,756		—		17,006
Thereafter	—		132,642		32,425		—		165,067
Total	$	9,000	$	176,580	$	64,103	$	6,199	$	255,882

XML

Liquidity

3 Months Ended

May 31, 2016

Debt Disclosure [Abstract]

Liquidity

Liquidity

The Company continually projects its anticipated cash needs, which include its operating needs, capital needs, and principal and interest payments on its indebtedness. As of the filing of this Form 10-Q, management believes the Company can meet its liquidity needs through the end of fiscal year 2017 with cash and cash equivalents on hand and projected cash flows from operations. Based on these projections, management also believes the Company will be in compliance with its debt covenants through the end of fiscal year 2017.

XML

Fair Value Measurements

3 Months Ended

May 31, 2016

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 29, 2016 and May 31, 2016. 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 May 31, 2016
	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 29, 2016
	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.

The following table shows a reconciliation of the beginning and ending balances for fair value measurements using significant unobservable inputs:

	For the Three Months Ended May 31,
	2015		2016
	Available For Sale Securities		Available For Sale Securities
Beginning Balance	$	500	$	800
Purchases	—		—
Ending Balance	$	500	$	800

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 May 31, 2016, the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $160.5 million and $185.6 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 Digonex 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.

XML

Segment Information

3 Months Ended

May 31, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company’s operations are 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 29, 2016, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments.

Three Months Ended May 31, 2016	Radio		Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	42,699		13,092			211			$	56,002
Station operating expenses excluding depreciation and amortization expense	27,275		13,478			2,236			42,989
Corporate expenses excluding depreciation and amortization expense	—		—			3,044			3,044
Depreciation and amortization	907		73			352			1,332
Operating income (loss)	$	14,517	$	(459	)	$	(5,421	)	$	8,637

Three Months Ended May 31, 2015	Radio		Publishing		Corporate & Emerging Technologies			Consolidated
Net revenues	42,593		15,525		335			$	58,453
Station operating expenses excluding depreciation and amortization expense	28,693		15,209		1,641			45,543
Corporate expenses excluding depreciation and amortization expense	—		—		3,819			3,819
Depreciation and amortization	798		61		591			1,450
Operating income (loss)	$	13,102	$	255	$	(5,716	)	$	7,641

Total Assets	Radio		Publishing		Corporate & Emerging Technologies		Consolidated
As of February 29, 2016	$	271,336	$	22,060	$	23,210	$	316,606
As of May 31, 2016	$	275,300	$	20,241	$	23,108	$	318,649

XML

Regulatory, Legal and Other Matters

3 Months Ended

May 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Regulatory, Legal and Other Matters

Regulatory, Legal and Other Matters

Emmis is a party to various 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.

On July 7, 2014, individuals who had been seeking to overturn the FCC’s approval of the transfer of the broadcast licenses for WBLS-FM and WLIB-AM from entities associated with Inner City Broadcasting to YMF (the entities that subsequently sold the two stations to Emmis) filed with the U.S. Court of Appeals for the District of Columbia Circuit a Notice of Appeal of the FCC’s approval of the transfer. The U.S. Court of Appeals for the District of Columbia upheld the license transfer. Additionally, in March 2015, an individual filed a lawsuit in the Federal District Court of New York challenging the transfer of the assets of WBLS-FM and WLIB-AM from Inner City to YMF, and claimed that Emmis had exerted undue influence in securing the FCC's consent to the transfer of the FCC licenses of WBLS-FM and WLIB-AM from YMF to Emmis. Based upon the facts alleged in the cases and the extensive precedent of courts not overturning FCC approvals of transfers of broadcast licenses except in exceedingly rare circumstances, Emmis believes the appeal and the claims in the lawsuit are without merit.

XML

Income Taxes

3 Months Ended

May 31, 2016

Income Taxes [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

Our effective income tax rate was 17% for the three-month period ended May 31, 2016. 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. The provision associated with deferred tax liabilities related to indefinite-lived intangibles is estimated to be approximately $2.5 million for the year ending February 28, 2017.

XML

Significant Events

3 Months Ended

May 31, 2016

Significant Events [Abstract]

Other Significant Transactions [Text Block]

Other Significant Events

On March 17, 2016, The Nasdaq Stock Market LLC ("Nasdaq") filed with the United States Securities and Exchange Commission Form 25-NSE to formally delist the Company's Preferred Stock from the Nasdaq Global Select Market (formerly listed under the symbol "EMMSP"). The delisting occurred on March 28, 2016. Pursuant to the Company's articles of incorporation, each outstanding share of Preferred Stock was automatically converted on April 4, 2016, into the Company's Class A common stock at a ratio of 2.80 shares of Class A common stock for each share of Preferred Stock.

On both March 1, 2016 and June 7, 2016, Emmis contributed an additional $0.5 million to Digonex in the form of convertible debt. Emmis currently owns rights that are convertible into at least 78% of the common equity of Digonex.

XML

Subsequent Events

3 Months Ended

May 31, 2016

Subsequent Event [Abstract]

Subsequent Events [Text Block]

Subsequent Event

On December 7, 2015, the Company received a notification from the Listing Qualifications Department of Nasdaq indicating that the Company's Class A common stock was not in compliance with Markeplace Rule 5450(a)(1) (the “Minimum Bid Price Rule”) because the minimum bid price of the Company's Class A common stock on the Nasdaq Global Select Market closed below $1.00 per share for 30 consecutive business days. In accordance with Marketplace Rules 5810(c)(3)(A), the Company had 180 calendar days, or until June 6, 2016, for our Class A common stock to regain compliance with the Minimum Bid Price Rule. During the 180 day period, the Company’s Class A common stock continued to trade on the Nasdaq Global Select Market. On June 7, 2016, the Company received a written notification (the "Staff Determination")from Nasdaq stating that because the Company had not regained compliance with the $1.00 minimum bid price requirement for continued listing, the Company’s Class A common stock (listed on The Nasdaq Global Select Market under the symbol “EMMS”) would be subject to delisting unless the Company requested a hearing before a Nasdaq Hearings Panel (the "Panel") on or before June 14, 2016.

The Company requested a hearing before the Panel, which stayed any delisting action in connection with the Staff Determination and allowed the continued listing of the Company’s Class A common stock on The Nasdaq Global Select Market until the Panel renders a decision subsequent to the hearing. At the hearing, the Company intends to present a plan to regain compliance with Rule 5450(a)(1) and request that the Panel allow the Company additional time within which to regain compliance. The Company believes that it will be able to present a viable plan to regain compliance because our shareholders are scheduled to vote upon a proposed amendment to our articles of incorporation to permit a one-for-four reverse stock split at our annual meeting on July 7, 2016 and we have already received sufficient votes for the proposal’s adoption. Upon receipt of formal shareholder approval, the reverse stock split is expected to be implemented effective upon the commencement of trading on July 8, 2016. Thus, the Company expects that our Class A common stock will have been trading above $1.00 for ten consecutive trading days on July 21, 2016, the date of our Nasdaq hearing.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

May 31, 2016

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 29, 2016. 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 May 31, 2016, and the results of its operations and cash flows for the three-month periods ended May 31, 2015 and 2016.

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 29, 2016 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 May 31, 2015 and 2016 consisted of stock options and restricted stock awards. Potentially dilutive securities at May 31, 2015 also included Series A non-cumulative convertible preferred stock (the “Preferred Stock”).

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”) in connection with acquisitions or dispositions of radio stations, often pending regulatory approval of transfer of the Federal Communications Commission ("FCC") licenses. 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 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

Restricted Cash

Restricted Cash

The Company's restricted cash, included in current assets in the accompanying condensed consolidated balance sheets, totaled $1.5 million and $1.7 million as of February 29, 2016 and May 31, 2016, respectively.

The terms of our 98.7FM non-recourse notes and related agreements discussed in Note 4 restrict a portion of our cash on deposit for specific operating and financing purposes. Restricted cash related to the 98.7FM non-recourse notes and related agreements totaled $1.5 million and $1.0 million as of February 29, 2016 and May 31, 2016, respectively.

In connection with the Company's agreement with Sprint/United Management Company (“Sprint”), the Company collects cash from other participating companies in the radio industry and remits cash collected to Sprint. The entirety of cash collected but not yet remitted to Sprint classified as restricted cash as of May 31, 2016 was $0.7 million. The Company had remitted to Sprint all collected cash related to its agreement as of February 29, 2016.

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 $205.1 million as of February 29, 2016 and May 31, 2016. 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 quarter ended May 31, 2016, 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

ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually using a two-step process. The first step is a screen for potential impairment, while the second step measures the amount of impairment. The Company conducts the two-step impairment test on December 1 of each fiscal year, unless indications of impairment exist during an interim period. During the quarter ended May 31, 2016, no new or additional impairment indicators emerged; hence, no interim impairment testing was warranted. When assessing its goodwill for impairment, the Company uses an enterprise valuation approach to determine the fair value of each of the Company’s reporting units (radio stations grouped by market and magazines on an individual basis). 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. There are no publicly traded publishing companies that are focused predominantly on city and regional magazines as is our publishing segment. Therefore, the market multiple used as a benchmark for our publishing reporting units has been based on recently completed transactions within the city and regional magazine industry or analyst reports that include valuations of magazine divisions within publicly traded media conglomerates. Management believes this methodology for valuing radio and publishing 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 step-one reporting unit 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.

This enterprise valuation is compared to the carrying value of the reporting unit for the first step of the goodwill impairment test. If the reporting unit exhibits impairment, the Company proceeds to the second step of the goodwill impairment test. For its step-two testing, the enterprise value is allocated among the tangible assets, indefinite-lived intangible assets (FCC licenses valued using a direct-method valuation approach) and unrecognized intangible assets, such as customer lists, with the residual amount representing the implied fair value of the goodwill. To the extent the carrying amount of the goodwill exceeds the implied fair value of the goodwill, the difference is recorded as an impairment charge in the statement of operations.

Definite-lived intangibles

Definite-lived intangibles

The Company’s definite-lived intangible assets consist of patents, customer lists, trademarks and a syndicated programming contract, all 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

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 May 31, 2016, the fair value and carrying value, excluding original issue discount, of the Company's 2014 Credit Agreement debt was $160.5 million and $185.6 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 Digonex 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.

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 29, 2016 and May 31, 2016. 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.

New Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, 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 in the first quarter of its fiscal year ending February 28, 2019. The Company is currently evaluating the method of adoption and impact, if any, the adoption of this guidance will have on its financial position and results of operations.

In August 2014, the FASB issued Accounting Standards Update 2014-15, Presentation of Financial Statements - Going Concern - 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. ASU 2014-15 is effective for the fiscal year ending February 28, 2017, and for annual periods and interim periods thereafter. Early adoption is permitted. The adoption of this update is not expected to have an impact on the Company’s consolidated financial statements.

In April 2015, the FASB issued Accounting Standards Update 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. This update provides guidance as to when a company using a cloud computing service that includes a software license should capitalize and depreciate the software license. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows.

In September 2015, the FASB issued Accounting Standards Update 2015-16, Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments. This update requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined, including the cumulative effect of the change in the provisional amount as if the accounting had been completed at the acquisition date. This guidance was effective for the Company as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows.

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 March 2016, the FASB issued Accounting Standards Update 2016-09, Compensation-Stock Compensation (Topic 718): Improvement to Employee Share-based Payment Accounting (ASU 2016-09) to simplify the accounting for share-based payment transactions, including the income tax consequences, and standardize certain classifications on the statement of cash flows. As permitted by ASU 2016-09, the Company chose to early adopt the provisions of this update as of March 1, 2016. The adoption of this guidance did not have any effect on the Company's financial position, results of operations, or cash flows.

XML

Summary of Significant Accounting Policies (Tables)

3 Months Ended

May 31, 2016

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
	May 31, 2015					May 31, 2016
	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	$	1,525	43,217	$	0.04	$	2,686	47,070	$	0.06
Impact of equity awards	—		1,890	—		—		225	—
Impact of conversion of preferred stock into common stock	—		2,266	—		—		—	—
Diluted net income per common share:
Net income available to common shareholders	$	1,525	47,373	$	0.03	$	2,686	47,295	$	0.06

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  May 31,
	2015	2016
	(shares in 000’s )
Equity awards	3,592	8,208
Antidilutive common share equivalents	3,592	8,208

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 May 31,
	2015		2016
	(amounts in 000's)
Net revenues	$	2,583	$	2,583
Station operating expenses, excluding depreciation and amortization expense	257		251
Interest expense	780		728

Schedule Of Assets And Liabilities Of Local Programming and Marketing Agreements

Assets and liabilities of 98.7FM as of February 29, 2016 and May 31, 2016 were as follows:

	As of February 29,		As of May 31,
	2016		2016
	(amounts in 000's)
Current assets:
Restricted cash	$	1,464	$	1,022
Prepaid expenses	545		530
Total current assets	2,009		1,552
Noncurrent assets:
Property and equipment, net	253		244
Indefinite lived intangibles	49,297		49,297
Deposits and other	5,460		5,678
Total noncurrent assets	55,010		55,219
Total assets	$	57,019	$	56,771
Current liabilities:
Accounts payable and accrued expenses	$	14	$	17
Current maturities of long-term debt	5,453		5,582
Deferred revenue	779		807
Other current liabilities	223		219
Total current liabilities	6,469		6,625
Noncurrent liabilities:
Long-term debt, net of current portion and unamortized debt discount	57,728		56,359
Total noncurrent liabilities	57,728		56,359
Total liabilities	$	64,197	$	62,984

Noncontrolling Interest

Below is a summary of the noncontrolling interest activity for the three months ended May 31, 2015 and 2016:

	Austin radio partnership			Digonex			Total noncontrolling interests
Balance, February 28, 2015	$	47,883		$	(1,222	)	$	46,661
Net income (loss)	1,614			(981		)	633
Distributions to noncontrolling interests	(1,636		)	—			(1,636		)
Balance, May 31, 2015	$	47,861		$	(2,203	)	$	45,658
Balance, February 29, 2016	$	47,556		$	(9,159	)	$	38,397
Net income (loss)	1,527			(898		)	629
Distributions to noncontrolling interests	(1,187		)	—			(1,187		)
Balance, May 31, 2016	$	47,896		$	(10,057	)	$	37,839

XML

Share Based Payments (Tables)

3 Months Ended

May 31, 2016

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 three months ended May 31, 2015 and 2016:

	Three Months Ended May 31,
	2015	2016
Risk-Free Interest Rate:	1.3% - 1.4%	1.2%
Expected Dividend Yield:	0%	0%
Expected Life (Years):	4.3	4.3
Expected Volatility:	63.6% - 64.6%	58.6% - 59.6%

Summary of Stock Options Outstanding and Activity

The following table presents a summary of the Company’s stock options outstanding at May 31, 2016, and stock option activity during the three months ended May 31, 2016 (“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	7,793,702	$	1.59
Granted	582,500	0.54
Expired	73,754	11.17
Outstanding, end of period	8,302,448	1.43		6.8	$	98
Exercisable, end of period	4,846,694	1.41		5.3	$	90

Summary of Nonvested Options and Changes

A summary of the Company’s nonvested options at May 31, 2016, and changes during the three months ended May 31, 2016, is presented below:

	Options	Weighted Average Grant Date Fair Value
Nonvested, beginning of period	3,323,253	$	0.93
Granted	582,500	0.26
Vested	449,999	1.25
Nonvested, end of period	3,455,754	0.77

Summary of Restricted Stock Grants Outstanding and Activity

The following table presents a summary of the Company’s restricted stock grants outstanding at May 31, 2016, and restricted stock activity during the three months ended May 31, 2016 (“Price” reflects the weighted average share price at the date of grant):

	Awards	Price
Grants outstanding, beginning of period	852,028	$	1.78
Granted	456,367	0.52
Vested (restriction lapsed)	718,867	1.05
Grants outstanding, end of period	589,528	1.69

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 ended May 31, 2015 and 2016. The company did not recognize any tax benefits related to stock-based compensation during the periods presented below.

	Three Months Ended May 31,
	2015		2016
Station operating expenses	$	724	$	337
Corporate expenses	1,380		519
Stock-based compensation expense included in operating expenses	2,104		856

XML

Goodwill by Segment (Tables)

3 Months Ended

May 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

The following table summarizes the Company's goodwill by segment as of February 29, 2016 and May 31, 2016.

	As of February 29,		As of May 31,
	2016		2016
Radio	$	4,603	$	4,603
Publishing	8,036		8,036
Corporate & Emerging Technologies	2,058		2,058
Total Goodwill	$	14,697	$	14,697

XML

Definite-lived Intangibles (Tables)

3 Months Ended

May 31, 2016

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 29, 2016 and May 31, 2016:

		As of February 29, 2016						As of May 31, 2016
		(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	6.7	$	1,240	$	727	$	513	$	1,240	$	762	$	478
Patents	5.3	1,815		1,141		674		1,815		1,172		643
Customer lists	1.2	1,015		543		472		1,015		629		386
Programming agreement	5.3	2,154		514		1,640		2,154		587		1,567
TOTAL		$	6,224	$	2,925	$	3,299	$	6,224	$	3,150	$	3,074

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

The following table presents the Company's estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangibles:

Year ended February 28 (29),	Expected Amortization Expense
	(in 000's)
2017	896
2018	636
2019	457
2020	457
2021	457

XML

Long-term Debt (Tables)

3 Months Ended

May 31, 2016

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

Long-term debt was comprised of the following at February 29, 2016 and May 31, 2016:

	February 29, 2016			May 31, 2016
2014 Credit Agreement debt :
Revolver	$	3,000		$	9,000
Term Loan	181,762			176,580
Total 2014 Credit Agreement debt	184,762			185,580
98.7FM non-recourse debt	65,411			64,103
Digonex non-recourse debt (1)	4,714			4,900
Less: Current maturities	(17,573		)	(14,832		)
Less: Unamortized original issue discount	(9,287		)	(8,860		)
Total long-term debt	$	228,027		$	230,891

Schedule Of Maximum Leverage Ratio

Our Total Leverage Ratio and Interest Coverage Ratio (each as defined in the 2014 Credit Agreement) requirements and actual amounts as of May 31, 2016 were as follows:

	As of May 31, 2016
	Covenant Requirement	Actual Results
Maximum Total Leverage Ratio	6.50 : 1.00	5.43 : 1.00
Minimum Interest Coverage Ratio	2.00 : 1.00	2.46 : 1.00

Schedule of Maturities of Long-term Debt

Based on amounts outstanding at May 31, 2016, mandatory principal payments of long-term debt for the next five

years and thereafter are summarized below:

Year Ended	2014 Credit Agreement						Digonex		Total
February 28 (29),	Revolver		Term Loan		98.7FM Debt		Notes payable		Payments
2017	$	—	$	6,938	$	4,146	$	—	$	11,084
2018	—		9,250		6,039		6,199		21,488
2019	—		9,250		6,587		—		15,837
2020	9,000		9,250		7,150		—		25,400
2021	—		9,250		7,756		—		17,006
Thereafter	—		132,642		32,425		—		165,067
Total	$	9,000	$	176,580	$	64,103	$	6,199	$	255,882

XML

Fair Value Measurements (Tables)

3 Months Ended

May 31, 2016

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 May 31, 2016
	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 29, 2016
	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

The following table shows a reconciliation of the beginning and ending balances for fair value measurements using significant unobservable inputs:

	For the Three Months Ended May 31,
	2015		2016
	Available For Sale Securities		Available For Sale Securities
Beginning Balance	$	500	$	800
Purchases	—		—
Ending Balance	$	500	$	800

XML

Segment Information (Tables)

3 Months Ended

May 31, 2016

Segment Reporting [Abstract]

Results of Operations of Business Segments

Three Months Ended May 31, 2016	Radio		Publishing			Corporate & Emerging Technologies			Consolidated
Net revenues	42,699		13,092			211			$	56,002
Station operating expenses excluding depreciation and amortization expense	27,275		13,478			2,236			42,989
Corporate expenses excluding depreciation and amortization expense	—		—			3,044			3,044
Depreciation and amortization	907		73			352			1,332
Operating income (loss)	$	14,517	$	(459	)	$	(5,421	)	$	8,637

Three Months Ended May 31, 2015	Radio		Publishing		Corporate & Emerging Technologies			Consolidated
Net revenues	42,593		15,525		335			$	58,453
Station operating expenses excluding depreciation and amortization expense	28,693		15,209		1,641			45,543
Corporate expenses excluding depreciation and amortization expense	—		—		3,819			3,819
Depreciation and amortization	798		61		591			1,450
Operating income (loss)	$	13,102	$	255	$	(5,716	)	$	7,641

Total Assets	Radio		Publishing		Corporate & Emerging Technologies		Consolidated
As of February 29, 2016	$	271,336	$	22,060	$	23,210	$	316,606
As of May 31, 2016	$	275,300	$	20,241	$	23,108	$	318,649

XML

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
	May 31, 2016	May 31, 2015
Basic net income per common share:
Net income available to common shareholders	$ 2,686	$ 1,525
Impact of conversion of preferred stock into common stock	$ 0
Basic shares:
Basic weighted average common shares outstanding (in shares)	47,070	43,217
Impact of equity awards (in shares)	225	1,890
Impact of conversion of preferred stock into common stock (in shares)	0	2,266
Diluted shares:
Diluted weighted average common shares outstanding (in shares)	47,295	47,373
Basic net income per common share:
Net income available to common shareholders from continuing operations, per basic shares (in dollars per share)	$ 0.06	$ 0.04
Diluted net income per common share:
Net income available to common shareholders from continuing operations, per dilutive shares (in dollars per share)	$ 0.06	$ 0.03

XML

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
	May 31, 2016	May 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common share equivalents	8,208	3,592
Equity awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common share equivalents	8,208	3,592

XML

Summary of Significant Accounting Policies Shares Excluded from Calculation as Effect of Conversion into Shares of Common Stock (Parenthetical) (Details)	3 Months Ended
	May 31, 2016	May 31, 2015
Series A Preferred Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Series A convertible preferred stock, dividend rate	6.25%	6.25%

XML

Summary of Significant Accounting Policies Summary of Restricted Cash (Details) - USD ($) $ in Thousands	May 31, 2016	Feb. 29, 2016
Cash and Cash Equivalents [Line Items]
Restricted cash	$ 1,747	$ 1,464
Nonrecourse Notes
Cash and Cash Equivalents [Line Items]
Restricted cash	1,000	$ 1,500
Sprint/NextRadio Agreement
Cash and Cash Equivalents [Line Items]
Restricted cash	$ 700

XML

Summary of Significant Accounting Policies Operating Results of Local Programming and Marketing Agreement Fees (Details) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	May 31, 2015
Segment Reporting Information [Line Items]
Net revenues	$ 56,002	$ 58,453
Station operating expenses excluding LMA fees and depreciation and amortization expense	42,989	45,543
Interest expense	4,690	4,546
98.7 FM
Segment Reporting Information [Line Items]
Net revenues	2,583	2,583
Station operating expenses excluding LMA fees and depreciation and amortization expense	251	257
Interest expense	$ 728	$ 780

XML

Summary of Significant Accounting Policies Assets and Liabilities of Local Programming and Marketing Agreement Fees (Details) - USD ($) $ in Thousands	May 31, 2016	Feb. 29, 2016
Segment Reporting Information [Line Items]
Prepaid expenses	$ 9,309	$ 7,413
Total current assets	54,431	51,691
Property and equipment, net	33,136	33,843
Indefinite-lived intangibles	205,129	205,129
Total assets	318,649	316,606
Other current liabilities	5,679	5,775
Total current liabilities	47,392	51,285
Long-term debt, net of current portion	230,891	228,027
Other noncurrent liabilities	7,367	7,728
Total liabilities	329,999	330,755
98.7 FM
Segment Reporting Information [Line Items]
Restricted cash	1,022	1,464
Prepaid expenses	530	545
Total current assets	1,552	2,009
Property and equipment, net	244	253
Indefinite-lived intangibles	49,297	49,297
Deposits and other	5,678	5,460
Total noncurrent assets	55,219	55,010
Total assets	56,771	57,019
Accounts payable and accrued expenses	17	14
Current maturities of long-term debt	5,582	5,453
Deferred revenue	807	779
Other current liabilities	219	223
Total current liabilities	6,625	6,469
Long-term debt, net of current portion	56,359	57,728
Total noncurrent liabilities	56,359	57,728
Total liabilities	$ 62,984	$ 64,197

XML

Summary of Significant Accounting Policies Noncontrolling Interests (Details) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	May 31, 2015
Noncontrolling Interest [Line Items]
Beginning balance	$ 38,397	$ 46,661
Net income (loss)	(629)	(633)
Distributions to noncontrolling interests	(1,187)	(1,636)
Ending balance	37,839	45,658
Austin Radio Partnership [Member]
Noncontrolling Interest [Line Items]
Beginning balance	47,556	47,883
Net income (loss)	(1,527)	1,614
Distributions to noncontrolling interests	(1,187)	(1,636)
Ending balance	47,896	47,861
Digonex [Member]
Noncontrolling Interest [Line Items]
Beginning balance	(9,159)	(1,222)
Net income (loss)	898	981
Distributions to noncontrolling interests		0
Ending balance	$ (10,057)	$ (2,203)

XML

Share Based Payments Assumptions used to Calculate Fair Value of Options on Date of Grant (Details)	3 Months Ended
	May 31, 2016	May 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected Dividend Yield:	0.00%	0.00%
Expected Life (Years):	4 years 3 months 12 days	4 years 3 months 12 days
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate:	1.20%	1.30%
Expected Volatility:	58.60%	63.60%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate:	1.20%	1.40%
Expected Volatility:	59.60%	64.60%

XML

Share Based Payments - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions	3 Months Ended		12 Months Ended
	May 31, 2016	May 31, 2015	Feb. 29, 2016	Jan. 28, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Proceeds from Stock Options Exercised		$ 100,000
Employee Service Share-based Compensation, Tax Benefit Realized from Exercise of Stock Options	$ 0
Stock options granted, term	10 years
Stock options vesting period	3 years
Annual percentage over three years	33.33%
Stock options weighted average grant date fair value	$ 0.26	$ 1.05
Shares available for future grants	1.9
Restricted stock awards requisite service period	3 years
Grant date fair value of shares vested	$ 800,000	$ 1,000,000
Compensation expenses	856,000	$ 2,104,000
Unrecognized compensation cost	$ 1,900,000
Compensation cost of weighted average period	1 year 7 months
2015 Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grants	0.6
Other Compensation Plans
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grants	1.3
Two Thousand Sixteen Equity Compensation Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				6.0
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate:	1.20%	1.30%
Percentage Of Controlling Interest			50.00%
Vesting dates of outstanding options	2016-07
Expiration dates of options	2017-03
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate:	1.20%	1.40%
Vesting dates of outstanding options	2019-03
Expiration dates of options	2026-04

XML

Share Based Payments Summary of Stock Options Outstanding and Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	May 31, 2016 USD ($) $ / shares shares
Options
Outstanding, beginning of period | shares	7,793,702
Granted | shares	582,500
Expired | shares	73,754
Outstanding, end of period | shares	8,302,448
Exercisable, end of period | shares	4,846,694
Price
Outstanding, beginning of period | $ / shares	$ 1.59
Granted | $ / shares	0.54
Expired or exchanged | $ / shares	11.17
Outstanding, end of period | $ / shares	1.43
Exercisable, end of period | $ / shares	$ 1.41
Outstanding	6 years 9 months 20 days
Exercisable, end of period	5 years 3 months 7 days
Outstanding, end of period | $	$ 98
Exercisable, end of period | $	$ 90

XML

Share Based Payments Summary of Nonvested Options and Changes (Details)	3 Months Ended
	May 31, 2016 $ / shares shares
Options
Nonvested, beginning of period | shares	3,323,253
Granted | shares	582,500
Vested | shares	449,999
Nonvested, end of period | shares	3,455,754
Weighted Average Grant Date Fair Value
Nonvested, beginning of period | $ / shares	$ 0.93
Granted | $ / shares	0.26
Vested | $ / shares	1.25
Nonvested, end of period | $ / shares	$ 0.77

XML

Share Based Payments Summary of Restricted Stock Grants Outstanding and Activity (Details) - Restricted Stock	3 Months Ended
	May 31, 2016 $ / shares shares
Awards
Grants outstanding, beginning of period | shares	852,028
Granted | shares	456,367
Vested (restriction lapsed) | shares	718,867
Grants outstanding, end of period | shares	589,528
Price
Grants outstanding, beginning of period | $ / shares	$ 1.78
Granted | $ / shares	0.52
Vested (restriction lapsed) | $ / shares	1.05
Grants outstanding, end of period | $ / shares	$ 1.69

XML

Share Based Payments Stock-Based Compensation Expense and Related Tax Benefits Recognized (Details) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	May 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 856	$ 2,104
Station operating expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	337	724
Corporate expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense	$ 519	$ 1,380

XML

Intangible Assets and Goodwill - Additional Information (Details) - USD ($) $ in Thousands	May 31, 2016	Feb. 29, 2016
Intangible Assets And Goodwill [Line Items]
Carrying amount of indefinite-lived intangibles	$ 205,129	$ 205,129
Goodwill	14,697	14,697
Radio
Intangible Assets And Goodwill [Line Items]
Goodwill	4,603	4,603
Publishing
Intangible Assets And Goodwill [Line Items]
Goodwill	$ 8,036	$ 8,036

XML

Intangible Assets and Goodwill Goodwill by Segment (Details) - USD ($) $ in Thousands	May 31, 2016	Feb. 29, 2016
Goodwill	$ 14,697	$ 14,697
Radio
Goodwill	4,603	4,603
Publishing
Goodwill	8,036	8,036
Corporate and Emerging Technologies [Member]
Goodwill	$ 2,058	$ 2,058

XML

Intangible Assets and Goodwill Definite-lived Intangibles (Details) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	Feb. 29, 2016
Definite-Lived Intangible Assets [Line Items]
Definite-Lived Trademarks, Gross	$ 6,224	$ 6,224
Definite-Lived Intangible Assets, Accumulated Amortization	3,150	2,925
Other intangibles, net	$ 3,074	3,299
Trademarks
Definite-Lived Intangible Assets [Line Items]
Weighted average remaining useful life	6 years 253 days
Definite-Lived Trademarks, Gross	$ 1,240	1,240
Definite-Lived Intangible Assets, Accumulated Amortization	762	727
Other intangibles, net	$ 478	513
Patents
Definite-Lived Intangible Assets [Line Items]
Weighted average remaining useful life	5 years 103 days
Definite-Lived Trademarks, Gross	$ 1,815	1,815
Definite-Lived Intangible Assets, Accumulated Amortization	1,172	1,141
Other intangibles, net	$ 643	674
Customer-Related Intangible Assets
Definite-Lived Intangible Assets [Line Items]
Weighted average remaining useful life	1 year 55 days
Definite-Lived Trademarks, Gross	$ 1,015	1,015
Definite-Lived Intangible Assets, Accumulated Amortization	629	543
Other intangibles, net	$ 386	472
Contract-Based Intangible Assets
Definite-Lived Intangible Assets [Line Items]
Weighted average remaining useful life	5 years 122 days
Definite-Lived Trademarks, Gross	$ 2,154	2,154
Definite-Lived Intangible Assets, Accumulated Amortization	587	514
Other intangibles, net	$ 1,567	$ 1,640

XML

Intangible Assets and Goodwill Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	May 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of Intangible Assets	$ 200	$ 400
Estimate of amortization expense related to intangible assets:
2016	896
2017	636
2018	457
2019	457
2020	$ 457

XML

Long-term Debt - Additional Information (Detail)			3 Months Ended
	Apr. 30, 2015 USD ($)	Jun. 10, 2014 USD ($)	May 31, 2016 USD ($)	Feb. 29, 2016 USD ($)	Jun. 16, 2014 USD ($)	May 30, 2012 USD ($)
Debt Instrument
Unamortized discount on issuance of debt			$ 8,860,000	$ 9,287,000
98.7FM Non-recourse debt
Debt Instrument
Face amount of debt						$ 82,200,000
Interest rate during period						4.10%
Non-recourse debt			64,103,000	65,411,000
Digonex Non-recourse debt
Debt Instrument
Face amount of debt					$ 6,200,000
Interest rate during period					5.00%
Non-recourse debt			4,900,000	4,714,000	$ 3,600,000
Digonex Non-recourse debt | Non-recourse debt
Debt Instrument
Face amount of debt			6,200,000.0
Two Thousand Fourteen Credit Agreement
Debt Instrument
Total Credit Agreement debt			$ 185,580,000	184,762,000
Provision for credit facility increase		$ 20,000,000
Borrowings on revolving credit facility		13,000,000
Percentage of principal due in quarterly installments			1.00%
Commitment fee			5000.00%
Unamortized discount on issuance of debt		9,300,000	$ 8,900,000
Two Thousand Fourteen Credit Agreement | Term Loan
Debt Instrument
Total Credit Agreement debt			176,580,000	181,762,000
Maximum borrowing capacity		185,000,000.0
Face amount of debt		185,000,000
Proceeds from issuance of debt		109,000,000
Long-term debt held in escrow		76,000,000
Two Thousand Fourteen Credit Agreement | Revolver
Debt Instrument
Total Credit Agreement debt			9,000,000	$ 3,000,000
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
Amortization of financing costs			$ 1,000,000
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
Second Amendment to Two Thousand Fourteen Credit Agreement [Member]
Debt Instrument
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%
Amortization of financing costs	$ 1,100,000
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%
Base Rate | Two Thousand Fourteen Credit Agreement
Debt Instrument
Minimum interest rate as a percentage			2.00%
Basis spread on interest rate			3.75%
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
Minimum interest rate as a percentage			1.00%
Basis spread on interest rate			4.75%
London Interbank Offered Rate (LIBOR) | Second Amendment to Two Thousand Fourteen Credit Agreement [Member]
Debt Instrument
Basis spread on interest rate	6.00%
WBLS-FM and WLIB-AM
Debt Instrument
Cash paid at first closing		55,000,000
Cash payable at second closing		$ 76,000,000

XML

Long-term Debt - Schedule of Long-term Debt Instruments (Details) - USD ($) $ in Thousands	May 31, 2016	Feb. 29, 2016	Jun. 16, 2014	Jun. 10, 2014
Debt Instrument
Less: Current maturities	$ 14,832	$ 17,573
Less: Unamortized original issue discount	8,860	9,287
Total long-term debt	230,891	228,027
98.7FM Non-recourse debt
Debt Instrument
Non-recourse debt	64,103	65,411
Digonex Non-recourse debt
Debt Instrument
Non-recourse debt	4,900	4,714	$ 3,600
Two Thousand Fourteen Credit Agreement
Debt Instrument
Total Credit Agreement debt	185,580	184,762
Less: Unamortized original issue discount	8,900			$ 9,300
Revolver | Two Thousand Fourteen Credit Agreement
Debt Instrument
Total Credit Agreement debt	9,000	3,000
Term Loan | Two Thousand Fourteen Credit Agreement
Debt Instrument
Total Credit Agreement debt	$ 176,580	$ 181,762

XML

Long-term Debt - Schedule of Maximum Leverage Ratio (Details) - Two Thousand Fourteen Credit Agreement	May 31, 2016
Covenant Requirement
Line of Credit Facility
Maximum Total Leverage Ratio	6.50
Minimum Interest Coverage Ratio	2.0
Actual Results
Line of Credit Facility
Maximum Total Leverage Ratio	5.43
Minimum Interest Coverage Ratio	2.46

XML

Long-term Debt - Schedule of Maturities of Long-term Debt (Details) $ in Thousands	May 31, 2016 USD ($)
Debt Instrument
2015	$ 11,084
2016	21,488
2017	15,837
2018	25,400
2019	17,006
Thereafter	165,067
Total long-term debt	255,882
98.7FM Non-recourse debt | Two Thousand Fourteen Credit Agreement
Debt Instrument
2015	4,146
2016	6,039
2017	6,587
2018	7,150
2019	7,756
Thereafter	32,425
Total long-term debt	64,103
Digonex Non-recourse debt
Debt Instrument
2015	0
2016	6,199
2017	0
2018	0
2019	0
Thereafter	0
Total long-term debt	6,199
Revolver | Two Thousand Fourteen Credit Agreement
Debt Instrument
2015	0
2016	0
2017	0
2018	9,000
2019	0
Thereafter	0
Total long-term debt	9,000
Term Loan | Two Thousand Fourteen Credit Agreement
Debt Instrument
2015	6,938
2016	9,250
2017	9,250
2018	9,250
2019	9,250
Thereafter	132,642
Total long-term debt	$ 176,580

XML

Fair Value Measurements Assets and Liabilities Accounted for at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	May 31, 2016	Feb. 29, 2016
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

XML

Fair Value Measurements Reconciliation of Beginning and Ending Balances for Fair Value Measurements using Significant Unobservable Inputs (Details) - Available For Sale Securities - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	May 31, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 800	$ 500
Purchases	0	0
Ending Balance	$ 800	$ 500

XML

Fair Value Measurements Additional Information (Details) $ in Millions	May 31, 2016 USD ($)
Fair Value Measurements Additional Detail [Abstract]
Long-term Debt, Fair Value	$ 160.5

XML

Segment Information Results of Operations of Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	May 31, 2016	May 31, 2015	Feb. 29, 2016
Segment Reporting Information [Line Items]
Net revenues	$ 56,002	$ 58,453
Station operating expenses excluding LMA fees and depreciation and amortization expense	42,989	45,543
Corporate expenses excluding depreciation and amortization expense	3,044	3,819
Depreciation and amortization	1,332	1,450
Operating income (loss)	8,637	7,641
Total Assets	318,649		$ 316,606
Radio
Segment Reporting Information [Line Items]
Net revenues	42,699	42,593
Station operating expenses excluding LMA fees and depreciation and amortization expense	27,275	28,693
Corporate expenses excluding depreciation and amortization expense	0	0
Depreciation and amortization	907	798
Operating income (loss)	14,517	13,102
Total Assets	275,300		271,336
Publishing
Segment Reporting Information [Line Items]
Net revenues	13,092	15,525
Station operating expenses excluding LMA fees and depreciation and amortization expense	13,478	15,209
Corporate expenses excluding depreciation and amortization expense	0	0
Depreciation and amortization	73	61
Operating income (loss)	(459)	255
Total Assets	20,241		22,060
Corporate
Segment Reporting Information [Line Items]
Net revenues	211	335
Station operating expenses excluding LMA fees and depreciation and amortization expense	2,236	1,641
Corporate expenses excluding depreciation and amortization expense	3,044	3,819
Depreciation and amortization	352	591
Operating income (loss)	(5,421)	$ (5,716)
Total Assets	$ 23,108		$ 23,210

XML

Income Taxes Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	May 31, 2016	May 31, 2015	Feb. 28, 2017
Deferred Tax Provision [Line Items]
Provision for deferred income taxes	$ 634	$ 841
Effective Income Tax Rate	17.00%
Scenario, Forecast [Member]
Deferred Tax Provision [Line Items]
Provision for deferred income taxes			$ 2,500

XML

Significant Events Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	May 31, 2016	Jun. 07, 2016	Apr. 04, 2016	Mar. 01, 2016
Business Acquisition [Line Items]
Number Of Preferred Stock Converted Into Common Stock			2.80
Digonex [Member]
Business Acquisition [Line Items]
Business Combination, Additional Convertible Rights Acquired, Total Equity Interest in Acquiree, Percentage	78.00%
Convertible Debt	$ 5.0			$ 0.5
Subsequent Event [Member] | Digonex [Member]
Business Acquisition [Line Items]
Convertible Debt		$ 0.5

XML

Subsequent Events (Details) - Class A Common Stock - Subsequent Event [Member]	Jul. 07, 2016	Jun. 07, 2016 $ / shares
Subsequent Event [Line Items]
Stockholders' Equity Note, Stock Split, Conversion Ratio	0.25
Stock Exchange Minimum Bid Price Per Share		$ 1.00