UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

AMENDMENT NO. 1

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

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)

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 þ No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

Yes þ No o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o No þ

     The number of shares outstanding of each of Emmis Communications Corporation’s classes of common stock, as of January 3, 2006, was:

			32,027,353			Shares of Class A Common Stock, $.01 Par Value
			4,868,206			Shares of Class B Common Stock, $.01 Par Value
			0			Shares of Class C Common Stock, $.01 Par Value

 

 

Explanatory Note

          The sole purpose of this amendment to our quarterly report on Form 10-Q for the fiscal quarter ended November 30, 2005 is to restate our classification of our Series A Cumulative Convertible Preferred Stock as mezzanine, outside of permanent equity, on our balance sheet. The restatement has no impact on the statements of operations, the statements of cash flows, or any balance sheet items except for shareholders’ equity and mezzanine. The restatement also has no impact on the Company’s operations, including the compliance with covenants under its debt instruments, other agreements or regulatory requirements. As previously disclosed, the impact of the reclassification in the balance sheet was a reduction in shareholders’ equity by $143,750,000 and the reflection of that amount in mezzanine between liabilities and shareholders’ equity. For additional information, see our Current Report on Form 8-K, filed on April 19, 2006.

INDEX

		Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements			3
Condensed Consolidated Statements of Operations for the three-month and nine-month periods ended November 30, 2004 and 2005			3
Condensed Consolidated Balance Sheets as of February 28, 2005 and November 30, 2005			5
Condensed Consolidated Statements of Cash Flows for the nine-month periods ended November 30, 2004 and 2005			7
Notes to Condensed Consolidated Financial Statements			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			35
Item 3. Quantitative and Qualitative Disclosures about Market Risk			50
Item 4. Controls and Procedures			50
PART II — OTHER INFORMATION
Item 6. Exhibits			51
Signatures			52
Statement re: Computation of Ratio of Earnings to Fixed Charges
Certification of Principal Executive Officer
Certification of Principal Financial Officer
Certification of Principal Executive Officer
Certification of Principal Financial Officer

PART I — FINANCIAL INFORMATION

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

(Unaudited)

(In thousands, except share data)

		Three Months Ended								Nine Months Ended
		November 30,								November 30,
		2004				2005				2004				2005
NET REVENUES		$	90,196			$	100,517			$	270,944			$	302,896
OPERATING EXPENSES:
Station operating expenses, excluding noncash compensation			54,982				62,282				164,022				188,204
Corporate expenses, excluding noncash compensation			7,318				5,790				23,354				19,391
Noncash compensation			3,068				2,667				8,982				8,216
Depreciation and amortization			3,924				4,274				12,035				12,468
Total operating expenses			69,292				75,013				208,393				228,279
OPERATING INCOME			20,904				25,504				62,551				74,617
OTHER INCOME (EXPENSE):
Interest expense			(8,469	)			(20,487	)			(30,122	)			(49,073	)
Loss on debt extinguishment			—				—				(97,248	)			—
Other income (expense), net			518				(88	)			872				30
Total other expense			(7,951	)			(20,575	)			(126,498	)			(49,043	)
INCOME (LOSS) BEFORE INCOME TAXES, MINORITY INTEREST AND DISCONTINUED OPERATIONS			12,953				4,929				(63,947	)			25,574
PROVISION (BENEFIT) FOR INCOME TAXES			6,078				1,303				(695	)			10,293
MINORITY INTEREST EXPENSE, NET OF TAX			565				1,092				1,947				3,511
NET INCOME (LOSS) FROM CONTINUING OPERATIONS			6,310				2,534				(65,199	)			11,770
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX			13,495				197,487				26,730				207,059
NET INCOME (LOSS)			19,805				200,021				(38,469	)			218,829
PREFERRED STOCK DIVIDENDS			2,246				2,246				6,738				6,738
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS		$	17,559			$	197,775			$	(45,207	)		$	212,091

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

     In the three-month periods ended November 30, 2004 and 2005, $1.8 million and $1.1 million respectively, of our noncash compensation was attributable to our radio and publishing entities, while $1.3 million and $1.6 million was attributable to corporate. In the nine-month periods ended November 30, 2004 and 2005, $5.5 million and $3.7 million respectively, of our noncash compensation was attributable to our radio and publishing entities, while $3.5 million and $4.5 million was attributable to corporate.

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(Unaudited)
(In thousands, except share data)

		Three Months Ended								Nine Months Ended
		November 30,								November 30,
		2004				2005				2004				2005
Basic net income (loss) available to common shareholders:
Continuing operations		$	0.07			$	0.01			$	(1.28	)		$	0.11
Discontinued operations, net of tax			0.24				5.35				0.47				4.63
Net income (loss) available to common shareholders		$	0.31			$	5.36			$	(0.81	)		$	4.74
Basic weighted average common shares outstanding			56,214				36,879				56,042				44,700
Diluted net income (loss) available to common shareholders:
Continuing operations		$	0.07			$	0.01			$	(1.28	)		$	0.11
Discontinued operations, net of tax			0.24				5.29				0.47				4.60
Net income (loss) available to common shareholders		$	0.31			$	5.30			$	(0.81	)		$	4.71
Diluted weighted average common shares outstanding			56,307				37,305				56,042				45,056

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

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

(In thousands, except share data)

						November 30,
						2005
		February 28,				(As Restated)
		2005				(See Note 3)
		(Note 1)				(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	16,054			$	245,155
Restricted cash			—				207,889
Accounts receivable, net of allowance for doubtful accounts of $1,525 and $1,897, respectively			63,353				80,166
Prepaid expenses			14,649				19,301
Other			6,648				3,816
Current assets — discontinued operations			63,754				63,485
Total current assets			164,458				619,812
PROPERTY AND EQUIPMENT, NET			62,520				65,185
INTANGIBLE ASSETS (Note 2):
Indefinite-lived intangibles			880,499				880,499
Goodwill			106,808				109,581
Other intangibles, net			12,970				21,565
Total intangible assets			1,000,277				1,011,645
DEFERRED TAX ASSETS			81,210				—
OTHER ASSETS, NET			27,973				36,437
NONCURRENT ASSETS — DISCONTINUED OPERATIONS			486,597				376,949
Total assets		$	1,823,035			$	2,110,028

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

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(In thousands, except share data)

						November 30,
						2005
		February 28,				(As Restated)
		2005				(See Note 3)
		(Note 1)				(Unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts Payable		$	19,848			$	23,703
Current maturities of long-term debt			7,688				215,461
Accrued salaries and commissions			10,244				7,588
Accrued interest			9,582				10,515
Deferred revenue			13,409				12,753
Other			5,696				5,799
Current liabilities — discontinued operations			49,474				51,741
Total current liabilities			115,941				327,560
LONG-TERM DEBT, NET OF CURRENT MATURITIES			1,173,808				1,350,475
OTHER LONG-TERM DEBT, NET OF CURRENT MATURITIES			5,422				4,541
OTHER NONCURRENT LIABILITIES			1,804				2,097
MINORITY INTEREST			48,021				49,738
DEFERRED TAX LIABILITIES			—				70,866
NONCURRENT LIABILITIES — DISCONTINUED OPERATIONS			25,447				24,525
Total liabilities			1,370,443				1,829,802
COMMITMENTS AND CONTINGENCIES
Series A Cumulative convertible preferred stock, $0.01 par value; $50.00 liquidation value; authorized 10,000,000 shares; issued and outstanding 2,875,000 shares at November 30, 2005			—				143,750
SHAREHOLDERS’ EQUITY:
Series A cumulative convertible preferred stock, $0.01 par value; $50.00 liquidation value; authorized 10,000,000 shares; issued and outstanding 2,875,000 shares at February 28, 2005			29				—
Class A common stock, $.01 par value; authorized 170,000,000 shares; issued and outstanding 51,621,958 shares at February 28, 2005 and 32,046,845 shares at November 30, 2005			516				320
Class B common stock, $.01 par value; authorized 30,000,000 shares; issued and outstanding 4,850,762 shares at February 28, 2005 and 4,879,784 shares at November 30, 2005			48				49
Additional paid-in capital			1,041,128				515,493
Accumulated deficit			(589,354	)			(377,263	)
Accumulated other comprehensive income (loss)			225				(2,123	)
Total shareholders’ equity			452,592				136,476
Total liabilities and shareholders’ equity		$	1,823,035			$	2,110,028

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

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

(Unaudited)

(Dollars in thousands)

		Nine Months Ended November 30,
		2004				2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	(38,469	)		$	218,829
Adjustments to reconcile net income (loss) to net cash provided by operating activities -
Discontinued operations			(26,730	)			(207,059	)
Depreciation and amortization			13,680				14,336
Accretion of interest on senior discount notes and amortization of related debt costs			5,669				122
Minority interest expense, net of tax			1,947				3,511
Provision for bad debts			1,688				1,605
Provision (benefit) for deferred income taxes			(966	)			10,254
Noncash compensation			8,982				8,216
Loss on debt extinguishment			97,248				—
Other			(2,240	)			(1,641	)
Changes in assets and liabilities -
Accounts receivable			(14,698	)			(16,178	)
Prepaid expenses and other current assets			2,650				122
Other assets			(6,036	)			2,502
Accounts payable and accrued liabilities			(10,848	)			394
Deferred revenue			(1,191	)			(656	)
Other liabilities			55				(5,343	)
Net cash provided by operating activities — discontinued operations			58,798				26,099
Net cash provided by operating activities			89,539				55,113
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment			(6,294	)			(8,679	)
Cash paid for acquisitions			—				(15,786	)
Proceeds from sale of assets, net			7,300				—
Deposits and other			(48	)			(63	)
Net cash provided by (used in) investing activities — discontinued operations			(11,928	)			435,131
Net cash provided by (used in) investing activities			(10,970	)			410,603

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

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
(Dollars in thousands)

		Nine Months Ended November 30,
		2004				2005
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt			(1,363,030	)			(114,563	)
Proceeds from long-term debt			1,376,500				499,000
Restricted cash pledged for debt repayment			—				(207,889	)
Premiums paid to redeem outstanding debt obligations			(72,810	)			—
Purchases of the Company’s Class A Common Stock			—				(398,343	)
Proceeds from exercise of stock options			2,095				3,763
Preferred stock dividends paid			(6,738	)			(6,738	)
Settlement of tax withholding obligations on stock issued to employees			(740	)			(1,289	)
Debt related costs			(12,052	)			(10,556	)
Net cash used in financing activities			(76,775	)			(236,615	)
INCREASE IN CASH AND CASH EQUIVALENTS			1,794				229,101
CASH AND CASH EQUIVALENTS:
Beginning of period			19,970				16,054
End of period		$	21,764			$	245,155
SUPPLEMENTAL DISCLOSURES:
Cash paid for -
Interest		$	50,716			$	67,239
Income taxes			271				39
Noncash financing transactions -
Value of stock issued to employees under stock compensation program and to satisfy accrued incentives			13,789				13,955
ACQUISITION OF D.EXPRES (SLOVAKIA):
Fair value of assets acquired						$	18,508
Cash paid							12,563
Liabilities recorded						$	5,945
ACQUISITION OF RADIO FM PLUS AD (BULGARIA):
Fair value of assets acquired						$	4,841
Cash paid							3,223
Liabilities recorded						$	1,618

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

EMMIS COMMUNICATIONS CORPORATION AND SUBSIDIARIES

(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, the condensed consolidated interim financial statements included herein have been prepared, without audit, by Emmis Communications Corporation (“ECC”) and its subsidiaries (collectively, “our,” “us,” “Emmis” or the “Company”). As permitted under the applicable rules and regulations of the Securities and Exchange Commission, certain information and footnote disclosures normally included in financial statements prepared in conformity with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations; however, Emmis believes that the disclosures are adequate to make the information presented not misleading. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in the Annual Report for Emmis filed on Form 10-K for the year ended February 28, 2005. 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) necessary to present fairly the consolidated financial position of Emmis at November 30, 2005 and the results of its operations for the three-month and nine-month periods ended November 30, 2004 and 2005 and its cash flows for the nine-month periods ended November 30, 2004 and 2005.

Accounting Pronouncement

     On December 16, 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share Based Payments” (“Statement No. 123R”) . Statement No. 123R requires companies to measure all employee stock-based compensation awards, including employee stock options, using a fair-value method and record such expense in their financial statements. In addition, the adoption of Statement No. 123R requires additional accounting and disclosure related to the income tax and cash flow effects resulting from share-based payment arrangements.

     Statement No. 123R provides two alternatives for adoption: (1) a “modified prospective” method in which compensation cost is recognized for all awards granted subsequent to the effective date of this statement as well as for the unvested portion of awards outstanding as of the effective date; or (2) a “modified retrospective” method which follows the approach in the “modified prospective” method, but also permits entities to restate prior periods to record compensation cost calculated under Statement No. 123 for the pro forma disclosure. The Company plans to follow the “modified prospective” method upon adoption of this pronouncement. Although the Company has not yet determined whether the adoption of Statement No. 123R will result in amounts that are similar to the current pro forma disclosures under Statement No. 123, it is evaluating the requirements under Statement No. 123R and expects the adoption to have a significant adverse impact on the Company’s consolidated statements of operations and per share results.

     On April 14, 2005, the Securities and Exchange Commission announced that it would delay the required implementation of Statement No. 123R, allowing companies that are not small business issuers to adopt the Statement no later than the beginning of the first fiscal year beginning after June 15, 2005. As a result of the delay, the Company plans to adopt Statement No. 123R as of March 1, 2006.

Stock-Based Compensation

     Until its adoption of Statement No. 123R, the Company will continue to account for its stock-based award plans in accordance with Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, under which compensation expense is recorded to the extent that the market price on the grant date of the underlying stock exceeds the exercise price. The required unaudited pro forma net income and pro forma earnings per share as if the stock-based awards had been accounted for using the provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” are as follows:

		Three Months Ended November 30,								Nine Months Ended November 30,
		2004				2005				2004				2005
		(Unaudited)								(Unaudited)
Net Income (Loss) Available to Common Shareholders:
As Reported		$	17,559			$	197,775			$	(45,207	)		$	212,091
Plus: Reported stock-based employee compensation costs, net of tax			1,810				1,574				5,300				4,847
Less: Stock-based employee compensation costs, net of tax, if fair value method had been applied to all awards			3,980				2,906				11,811				8,844
Pro Forma		$	15,389			$	196,443			$	(51,718	)		$	208,094
Basic EPS:
As Reported		$	0.31			$	5.36			$	(0.81	)		$	4.74
Pro Forma		$	0.27			$	5.33			$	(0.92	)		$	4.66
Diluted EPS:
As Reported		$	0.31			$	5.30			$	(0.81	)		$	4.71
Pro Forma		$	0.27			$	5.27			$	(0.92	)		$	4.62

     In addition to reclassifications for discontinued operations, the amounts disclosed as “stock-based compensation costs, net of tax, if fair value method had been applied to all awards” in the three and nine months ended November 30, 2004 reflect an immaterial adjustment to include certain options previously excluded from the calculation.

Advertising Costs

     The Company defers the costs of major advertising campaigns for which future benefits are demonstrated. These costs are amortized over the shorter of the estimated period benefited (generally six months) or the remainder of the fiscal year. The Company had deferred $0.9 million and $1.1 million of these costs as of November 30, 2004 and 2005, respectively.

Basic and Diluted Net Income Per Common Share

     Basic net income per common share is computed by dividing net income available 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 November 30, 2004 and 2005 consisted of stock options and the 6.25% Series A cumulative convertible preferred stock. Neither the

6.25% Series A cumulative convertible preferred stock nor the stock options are included in the calculation of diluted net income per common share for the nine-month period ended November 30, 2004 as the effect of their conversion to common stock would be antidilutive. Weighted average shares excluded from the calculation of diluted net income per share that would result from the conversion of the 6.25% Series A cumulative convertible preferred stock and the conversion of stock options amounted to approximately 3.9 million shares for the nine-month period ended November 30, 2004. The 6.25% Series A cumulative convertible preferred stock was excluded from the calculation of diluted net income per common share for the three-month period ended November 30, 2004 and the three-month and nine-month periods ended November 30, 2005 as the effect of its conversion to 3.7 million shares, 4.8 million shares and 4.8 million shares, respectively, would be antidilutive.

Discontinued Operations

Summary of Discontinued Operations Activity:

		Three Months Ended November 30,								Nine Months Ended November 30,
		2004				2005				2004				2005
Income (loss) from operations:
Television		$	20,249			$	11,083			$	40,049			$	27,401
WRDA-FM			(250	)			(157	)			(1,162	)			(693	)
Phoenix radio stations			2,857				—				7,203				440
Votionis			—				—				(490	)			—
Total			22,856				10,926				45,600				27,148
Less: Provision for income taxes			9,361				2,895				18,870				9,545
Income from operations, net of tax			13,495				8,031				26,730				17,603
Gain on sale of discontinued operations:
Television			—				321,154				—				321,154
Less: Provision for income taxes			—				131,698				—				131,698
Gain on sale of discontinued operations, net of tax			—				189,456				—				189,456
Income from discontinued operations, net of tax		$	13,495			$	197,487			$	26,730			$	207,059

A discussion of each component of discontinued operations follows.

Television Division

     On May 10, 2005, Emmis announced that it had engaged advisors to assist in evaluating strategic alternatives for its television assets. The decision to explore strategic alternatives for the Company’s television assets stemmed from the Company’s desire to lower its debt, coupled with the Company’s view that its television stations needed to be aligned with a company that was larger and more singularly focused on the challenges of American television, including digital video recorders and the industry’s relationship with cable and satellite providers. As of November 30, 2005 the Company has sold six of its sixteen television stations (See Note 3). On December 5, 2005, the Company sold an additional three television stations (See Note 3). Furthermore, the Company has entered into a definitive agreement to sell an additional four stations and expects to enter into agreements to sell the remaining three stations in the next three to twelve months. The Company concluded its television assets were held for sale in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“Statement No. 144”) and the results of operations of the television division have been classified as discontinued operations in the accompanying condensed consolidated financial statements. The television division had historically been presented as a separate reporting segment of Emmis. The following table

summarizes certain operating results for the television division for all periods presented:

		Three Months Ended November 30,								Nine Months Ended November 30,
		2004				2005				2004				2005
Net revenues		$	78,411			$	63,518			$	208,248			$	190,343
Station operating expenses, excluding noncash compensation			41,748				43,727				119,591				124,777
Noncash compensation			1,381				917				4,381				2,625
Depreciation and amortization			7,461				—				22,753				12,321
Interest expense			7,159				7,699				20,288				21,954
Income before taxes			20,249				11,083				40,049				27,401
Provision for income taxes			8,292				2,984				16,393				9,674
Gain on sale of stations, net of tax			—				189,456				—				189,456

     Net assets related to our television division are classified as discontinued operations in the accompanying consolidated balance sheets as follows:

		February 28, 2005				November 30, 2005
Current assets:
Accounts receivable, net		$	43,634			$	44,070
Current portion of TV program rights			16,562				16,803
Prepaid expenses			1,849				1,067
Other			1,617				1,471
Total current assets			63,662				63,411
Noncurrent assets:
Property and equipment, net			130,016				90,127
Intangibles, net			335,341				259,580
Other noncurrent assets			7,466				14,250
Total noncurrent assets			472,823				363,957
Total assets		$	536,485			$	427,368
Current liabilities:
Accounts payable and accrued expenses		$	8,686			$	8,278
Current portion of TV program rights			30,910				28,862
Accrued salaries and commissions			6,141				4,914
Deferred revenue			882				7,778
Other			2,697				1,878
Total current liabilities			49,316				51,710
Noncurrent liabilities:
TV program rights payable, net of current portion			18,634				12,488
Other noncurrent liabilities			6,806				12,014
Total noncurrent liabilities			25,440				24,502
Total liabilities		$	74,756			$	76,212

     Certain debt would be required to be repaid as a result of the disposition of the Company’s television assets. The Company has allocated interest expense associated with this portion of debt to the television operations in accordance with Emerging Issues Task Force Issue 87-24 “Allocation of Interest to Discontinued Operations,” as modified.

     Our television station in New Orleans, Louisiana, WVUE, was significantly affected by Hurricane Katrina and the subsequent flooding. The flooding of New Orleans caused extensive property damage at WVUE. Although the extent of the property damage is estimated to be approximately $13 million, Emmis believes that it is insured (subject to applicable deductibles) for substantially all property losses resulting from Katrina and subsequent flooding as it maintained Federal flood insurance and private flood insurance. Since Emmis believes recovery of insurance proceeds under its relevant policies is probable, no adjustments to the carrying values of WVUE property were made as of November 30, 2005. Additionally, the Company recorded a $1.3 million reserve against WVUE accounts receivable due to the impact of the flooding on the local economy. The charge is reflected in the nine-month period ending November 30, 2005 in the preceding table. WVUE did not broadcast its signal for an extended period of time as a result of Katrina and the general disruption of the local economy will negatively affect ongoing advertising revenue. The Company maintains business interruption insurance and expects to be reimbursed for lost net income as a result of Katrina. However, unlike property and casualty, Emmis has not accrued for business interruption insurance proceeds. Business interruption insurance proceeds will only be recognized upon receipt. The Company estimates that the negative revenue impact of the hurricane was approximately $4 million for its quarter ended November 30, 2005 and estimates an additional $3 million impact for its quarter ending February 28, 2006.

WRDA-FM:

     On September 23, 2005, Emmis signed a definitive agreement to sell radio station WRDA-FM in St. Louis, MO to Radio One, Inc. for $20 million. Radio One, Inc. began operating this station pursuant to a Local Programming and Marketing Agreement (LMA) effective October 1, 2005. Radio One, Inc. makes no monthly payments to Emmis, but reimburses Emmis for substantially all of Emmis’ costs to operate the station. Emmis had tried various formats with the station over the past several years, but did not achieve an acceptable operating performance with any of the formats. After the most recent format change failed to meet expectations, Emmis elected to divest of the station. The assets and liabilities of WRDA-FM have been classified as held for sale as of February 28, 2005 and November 30, 2005 and its results of operations for the three-month and nine-month periods ended November 30, 2004 and 2005 have been reflected as discontinued operations in the accompanying condensed consolidated financial statements. WRDA-FM had historically been included in the radio segment.

     The following table summarizes certain operating results for WRDA-FM for all periods presented:

		Three Months Ended November 30,								Nine Months Ended November 30,
		2004				2005				2004				2005
Net revenues		$	442			$	136			$	1,418			$	851
Station operating expenses, excluding noncash compensation			628				225				2,370				1,413
Noncash compensation			19				1				67				19
Depreciation and amortization			45				6				143				51
Loss before taxes			(250	)			(157	)			(1,162	)			(693	)
Benefit for income taxes			(102	)			(89	)			(476	)			(309	)

     Net assets related to WRDA-FM is classified as discontinued operations in the accompanying consolidated balance sheets as follows:

		February 28, 2005				November 30, 2005
Current assets:
Prepaid expenses		$	64			$	13
Other			28				61
Total current assets			92				74
Noncurrent assets:
Property and equipment, net			782				—
Intangibles, net			12,992				12,992
Total noncurrent assets			13,774				12,992
Total assets		$	13,866			$	13,066
Current liabilities:
Accounts payable and accrued expenses		$	61			$	20
Accrued salaries and commissions			49				—
Deferred revenue			44				—
Other			4				11
Total current liabilities			158				31
Noncurrent liabilities:
Other noncurrent liabilities			7				23
Total noncurrent liabilities			7				23
Total liabilities		$	165			$	54

Phoenix

     On January 14, 2005, Emmis completed its exchange with Bonneville International Corporation (“Bonneville”) whereby Emmis swapped three of its radio stations in Phoenix (KTAR-AM, KMVP-AM and KKLT-FM) for Bonneville’s WLUP-FM located in Chicago and $74.8 million in cash, including payments for working capital items. The results of operations of the three radio stations in Phoenix have been classified as discontinued operations in the accompanying condensed consolidated financial statements. These three radio stations had historically been included in the radio reporting segment. The following table summarizes certain operating results for the three Phoenix stations for all periods presented:

		Three Months Ended November 30,								Nine Months Ended November 30,
		2004				2005				2004				2005
Net revenues		$	7,338			$	—			$	23,591			$	—
Station operating expenses, excluding noncash compensation			4,155				—				15,358				(440	)
Noncash compensation			132				—				445				—
Depreciation and amortization			201				—				592				—
Income before taxes			2,857				—				7,203				440
Provision for income taxes			1,171				—				2,953				180

Votionis

     On May 12, 2004, Emmis sold to its minority partners for $7.3 million in cash its entire 75% interest in Votionis, S.A. (“Votionis”), which owns and operates two radio stations in Buenos Aires, Argentina. The results of operations of Votionis have been classified as discontinued operations in the accompanying

condensed consolidated financial statements. Votionis was historically included in the radio reporting segment. The following table summarizes certain operating results for Votionis for the three–month and nine-month periods ended November 30, 2004:

		Three Months Ended				Nine Months Ended
		November 30, 2004				November 30, 2004
Net revenues		$	—			$	1,693
Station operating expenses, excluding noncash compensation			—				2,019
Depreciation and amortization			—				164
Pre-tax income (loss)			—				(490	)
Provision (benefit) for income taxes			—				—

     Votionis’ operating results were reported on a calendar year and consolidated into the Company’s fiscal year for reporting purposes. Accordingly, the results for its calendar quarter ended March 31, 2004 were consolidated into Emmis’ fiscal quarter ended May 31, 2004. However, the quarter ended May 31, 2004, includes the results of Votionis from January 1, 2004 to May 12, 2004, as the results of operations of Votionis for the period April 1, 2004 through May 12, 2004 were immaterial.

Note 2. Intangible Assets and Goodwill

     Indefinite-lived Intangibles

     Under the guidance in Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“Statement No. 142”), the Company’s 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 of February 28, 2005 and November 30, 2005, the carrying amounts of the Company’s FCC licenses were $880.5 million. This amount is entirely attributable to our radio division.

     Since its adoption of EITF Topic D-108 on December 1, 2004, the Company has used a direct-method valuation approach known as the greenfield income valuation method when it performs its annual impairment tests. Under this method, the Company projects the cash flows that would be generated by each of its reporting units if the reporting unit were commencing operations in each of its markets 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 reporting unit was just beginning operations. 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, reporting unit audience share, reporting unit revenue share and discount rate. For its radio stations, the Company has determined the reporting unit to be all of its stations in a local market. The required annual impairment tests may result in future periodic write-downs.

     Goodwill

     Statement No. 142 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 conducted the two-step impairment test as of December 1, 2002, 2003 and 2004, each of which resulted in no impairment charge. 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. The multiple applied to each reporting unit is then adjusted up or down from this benchmark based upon characteristics of the reporting unit’s specific market, such as market size, market growth rate, and recently completed or announced transactions within the market. There are no publicly traded publishing companies that are focused predominantly on city and regional magazines as is our publishing segment. 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.

     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 in the statement of operations.

     As of February 28, 2005 and November 30, 2005, the carrying amount of the Company’s goodwill was $106.8 million and $109.6 million, respectively. As of February 28, 2005 approximately $48.6 million and $58.2 million of our goodwill was attributable to our radio and publishing divisions, respectively. As of November 30, 2005 approximately $51.4 million and $58.2 million of our goodwill was attributable to our radio and publishing divisions, respectively. The required annual impairment tests may result in future periodic write-downs.

     Definite-lived intangibles

     The Company’s definite-lived intangible assets consist primarily of foreign broadcasting licenses, favorable office leases, customer lists and non-compete agreements, 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 asset at February 28, 2005 and November 30, 2005:

						February 28, 2005												November 30, 2005
		Weighted Average				Gross								Net				Gross								Net
		Useful Life				Carrying				Accumulated				Carrying				Carrying				Accumulated				Carrying
		(in years)				Amount				Amortization				Amount				Amount				Amortization				Amount
Foreign Broadcasting Licenses			6.7			$	24,443			$	13,486			$	10,957			$	35,645			$	15,396			$	20,249
Favorable Office Leases			6.4				689				179				510				689				259				430
Customer Lists			1.0				3,610				3,054				556				3,610				3,531				79
Non-Compete Agreements			1.3				5,738				5,681				57				5,738				5,708				30
Other			24.6				1,515				625				890				1,521				744				777
TOTAL						$	35,995			$	23,025			$	12,970			$	47,203			$	25,638			$	21,565

     Total amortization expense from definite-lived intangibles for the three–month periods ended November 30, 2004 and 2005 was $0.8 million and $1.0 million, respectively. Total amortization expense from definite-lived intangibles for the nine–month periods ended November 30, 2004 and 2005 was $2.9 million and $2.6 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),
2006		$	3,637
2007			3,665
2008			3,560
2009			3,523
2010			3,162

Note 3. Significant Events

Dutch Auction Tender Offer and Related Financing Activities

     On May 16, 2005, Emmis launched a “Dutch Auction” tender offer (the “Tender Offer”) to purchase up to 20.25 million shares of its Class A common stock for a price not greater than $19.75 per share nor less than $17.25 per share. The Tender Offer expired on June 13, 2005, and on June 20, 2005 Emmis purchased 20.25 million shares of its Class A common stock at a price of $19.50 per share, for an aggregate purchase price of $394.9 million, and incurred related fees and expenses of approximately $3.4 million.

     In connection with the Tender Offer, on June 6, 2005, Emmis Operating Company amended its credit facility to (i) permit the Tender Offer and related transactions, (ii) reset financial covenants, and (iii) allow for payments on Emmis Communications Corporation’s floating rate senior notes discussed below. In order to finance the aggregate purchase price of the Tender Offer and to pay related fees and expenses, totaling $398.3 million, on June 13, 2005 Emmis Operating Company borrowed $100 million under the revolving portion of its amended credit facility and Emmis issued $300 million of its floating rate senior notes in a private placement (the “Interim Notes”). On June 21, 2005, Emmis issued $350 million of its floating rate senior notes (the “Notes”) in exchange for (i) the $300 million aggregate principal amount of Interim Notes issued on June 13, 2005, and (ii) $50 million in cash. The Interim Notes were retired on June 21, 2005. Emmis used approximately $40 million of the cash proceeds from the notes transactions to repay borrowings it had incurred under its revolving credit facility on June 13, 2005, approximately $10.6 million of cash proceeds from the notes transactions to pay debt issuance fees and approximately $1.1 million for interest and other.

     The Notes will mature on June 15, 2012. Interest on the Notes accrues at a floating rate per annum, reset quarterly, equal to LIBOR plus 5.875% (approximately 9.7% at November 30, 2005). The applicable margin to LIBOR increases by 0.5% on each of June 15, 2006, December 15, 2006, and June 15, 2007. Interest payment dates are March 15, June 15, September 15 and December 15.

     Emmis may redeem all or a portion of the Notes at the redemption prices set forth below plus accrued and unpaid interest beginning on December 15 of the years indicated below:

Year		Percentage
2005			100.0	%
2006			102.0	%
2007			101.0	%
2008 and thereafter			100.0	%

     The Notes are unsecured obligations of Emmis and will rank pari passu with all future senior indebtedness (as defined) and senior in right of payment to future subordinated indebtedness (as defined). The Notes are subordinated to all indebtedness and liabilities (as defined) of ECC’s subsidiaries, including bank debt and subordinated debt of Emmis Operating Company.

     The indenture governing the Notes contains covenants limiting Emmis’ ability to, among other things, (1) incur additional indebtedness, (2) pay dividends or make other distributions to stockholders, (3) purchase or redeem capital stock or subordinated indebtedness, (4) make certain investments, (5) engage in certain transactions with affiliates, and (6) sell all or substantially all of the assets of Emmis and its subsidiaries, or consolidate or merge with or into other companies.

     On August 9, 2005, Emmis exchanged the $350.0 million aggregate principal amount of the Notes for a new series of notes registered under the Securities Act. The terms of the new series of notes are identical to the terms of the Notes.

     On December 23, 2005, Emmis called for redemption $230 million aggregate outstanding principle amount of the Notes. See Note 9 for further discussion.

     In connection with the Tender Offer, on May 16, 2005, Emmis filed Articles of Correction with the Indiana Secretary of State to correct the anti-dilution adjustment provisions of its outstanding convertible preferred stock. The same day, Emmis also filed a related lawsuit in Indiana state court. On June 1, 2005, Emmis entered into settlement agreements with certain holders of its outstanding convertible preferred stock. The settlement resulted in the amendment of Emmis’ Second Amended and Restated Articles of Incorporation to change the terms of the Company’s outstanding convertible preferred stock so that (a) a special anti-dilution formula applied to the Company’s tender offer (completed on June 13, 2005) that reduced the conversion price of the convertible preferred stock proportionately based on the aggregate consideration paid in the tender offer; (b) a new customary anti-dilution adjustment provision would apply to all other tender and exchange offers triggering an adjustment based on the aggregate consideration paid in such tender or exchange offer, the Company’s overall market capitalization and the market value of the Company’s Class A common stock determined over a 10-day trading period ending on the date immediately preceding the first public announcement of Emmis’ intention to effect a tender or exchange offer and (c) the holders of Emmis’ convertible preferred stock were granted the right to require Emmis to redeem their shares on the first anniversary of a going private transaction in which Jeffrey H. Smulyan and his affiliates participate that is not otherwise a change of control under the terms of the convertible preferred stock. All other anti-dilution provisions remained unchanged. Each share of preferred stock is convertible into a number of shares of common stock, which is determined by dividing the liquidation preference of the share of preferred stock ($50.00 per share) by the conversion price. At February 28, 2005, the conversion price was $39.06, which resulted in a conversion ratio of 1.28 shares of common stock per share of preferred stock. As a result of the application of the special anti-dilution adjustment in the June 2005 tender offer, the conversion price was adjusted from $39.06 to $30.10. Consequently, each share of preferred stock is convertible now into 1.66 shares of common stock.

     As a result of the redemption right given to the holders of the preferred stock, the Company has reclassified in the restated November 30, 2005 condensed consolidated balance sheet the liquidation preference of the preferred stock from equity to mezzanine. The restatement has no impact on the statements of operations, the statements of cash flows, or any balance sheet items except for shareholders’ equity and mezzanine. The restatement also has no impact on the Company’s operations, including the compliance with covenants under tis debt instruments, other agreements or regulatory requirements. The impact of the restatement, on the accompanying condensed consolidated balance sheet as of November 30, 2005 is to reduce shareholders’ equity by $143.8 million and to reflect that amount in mezzanine between liabilities and shareholders’ equity.

Sale of television stations to Gray Television and LIN Television Corporation

     On November 30, 2005, Emmis sold substantially all of the assets of television station WSAZ in Huntington/Charleston, WV to Gray Television for $186.0 million. Also on November 30, 2005, Emmis sold substantially all of the assets of four television stations (plus regional satellite stations) to LIN Television Corporation (“LIN”) (WALA in Mobile, AL/Pensacola, FL, WTHI in Terre Haute, IN, WLUK in Green Bay, WI, and KRQE in Albuquerque, NM) for $249.0 million and entered into a Local Programming and Marketing Agreement (LMA) with LIN for WBPG in Mobile, AL/Pensacola, FL. Emmis transferred to LIN

all of the assets of WBPG except the FCC license, the WB affiliation agreement and a tower lease. LIN paid $9.0 million of the agreed-upon $12.0 million value of WBPG on November 30, 2005, with the remaining $3.0 million due upon the transfer of the remaining assets, which will terminate the LMA. Pursuant to the LMA, LIN began programming the station on November 30, 2005 and records all of the revenues and expenses of the station.

     Net proceeds of these transactions were approximately $441.6 million. The Company pledged $207.9 million for repayment of amounts outstanding under its senior credit facility and this cash has been reflected as restricted cash in the accompanying condensed consolidated balance sheet. The Company repaid the $207.9 million of senior credit facility debt in early December 2005. The remaining $233.7 million of cash has been invested in short-term, highly-liquid investments and is reflected as cash and cash equivalents in the accompanying condensed consolidated balance sheet. The Company has used the cash to repay outstanding debt obligations. See Note 9.

     On November 30, 2005, upon the closing of the sale of these television stations to Gray Television and LIN Television Corporation, Emmis accrued approximately $2.4 million of completion and performance bonuses due to the employees of these stations. This amount was included in the operating results of the stations in the quarter ended November 30, 2005 and was paid in December 2005.

Sale of television stations to Journal Communications

     On December 5, 2005, Emmis sold substantially all of the assets of television stations WFTX in Ft. Myers, FL and KGUN in Tucson, AZ, and the tangible assets and many of the intangible assets (excluding, principally, the FCC license) of KMTV in Omaha, NE to Journal Communications for $224.9 million of net proceeds. Emmis expects to record a gain on sale of approximately $86 million, net of tax, which will be reflected in discontinued operations in the quarter ending February 28, 2006. Emmis plans to use the proceeds to repay outstanding debt obligations, fund acquisitions, or other general corporate purposes. The FCC did not consent to the transfer of the FCC license for KMTV due to Journal’s existing radio station ownership in the Omaha market. Journal must divest of some of its radio holdings before the FCC will approve the transfer of KMTV’s FCC license from Emmis to Journal. On December 5, 2005, Emmis entered into a Local Programming and Marketing Agreement (LMA) with Journal for KMTV. Pursuant to the LMA, Journal began programming the station on December 5, 2005 and records all of the revenues and expenses of the station. Journal makes no monthly payments to Emmis under the LMA, but reimburses Emmis for substantially all of Emmis’ costs to operate the station. Journal paid a portion of the purchase price of KMTV on December 5, 2005 and will pay an additional $5 million on October 15, 2007 and an additional $5 million on October 15, 2008 if closing on KMTV has not occurred.

Other Television Division Dispositions

     On September 28, 2005, Emmis signed definitive agreements to sell four television stations (plus regional satellite stations) to SJL Broadcast Group and affiliates of The Blackstone Group (KOIN in Portland, OR; KHON in Honolulu, HI; KSNW in Wichita, KS and KSNT in Topeka, KS) for $259 million. Closing of the sales is subject to customary conditions, including approval from the Federal Communications Commission and other regulatory agencies. Emmis expects the sales to close by January 31, 2006 and plans to use the proceeds to repay outstanding debt obligations, to fund acquisitions, or for other general corporate purposes. Emmis expects to record a gain on sale of approximately $62 million, net of tax, which will be reflected in discontinued operations in the quarter ending February 28, 2006. After closing of the sale of these four stations, Emmis plans to make a special payment to television employees of approximately $15.1 million and to corporate employees (other than executive officers) of approximately $0.9 million. These charges are anticipated to be recorded in the quarter ending February 28, 2006, commensurate with the

closing of the SJL/Blackstone transaction, as the special payments are conditioned on the closing (or commencement of an LMA) on thirteen of the original sixteen television stations and the closing of the SJL/Blackstone transaction satisfies that requirement. Emmis continues to explore the sale of the remaining three television stations and expects to effect such sales in the spring and summer of 2006.

WRDA-FM Disposition

     On September 23, 2005, Emmis signed a definitive agreement to sell radio station WRDA-FM in St. Louis, MO to Radio One, Inc. for $20 million. Radio One, Inc. began operating this station pursuant to a Local Programming and Marketing Agreement (LMA) effective October 1, 2005. Radio One, Inc. makes no monthly payments to Emmis, but reimburses Emmis for substantially all of Emmis’ costs to operate the station. Closing of this sale is subject to customary conditions, including approval from the Federal Communications Commission and other regulatory agencies. Emmis hopes to close this sale by February 28, 2006, the end of its current fiscal year, and plans to use the proceeds to repay outstanding debt obligations, to fund acquisitions, or for other general corporate purposes. Emmis expects to record a gain on sale of approximately $4 million, net of tax, which will be reflected in discontinued operations in the quarter in which the sale occurs.

Acquisition of Radio Network in Slovakia

     On March 10, 2005, Emmis completed its acquisition of D.EXPRES, a.s., a Slovakian company that owns and operates Radio Expres, a national radio network in Slovakia, for a cash purchase price of approximately $12.6 million. This acquisition allowed Emmis to expand its international portfolio on the European continent and enter one of the world’s fastest growing economies. The acquisition was financed through borrowings under the credit facility. The Company has recorded $2.3 million of goodwill, none of which is deductible for income tax purposes. The operating results from March 10, 2005 through September 30, 2005 are included in the accompanying condensed consolidated financial statements. Consistent with the Company’s other foreign subsidiaries, Radio Expres reports on a fiscal year ending December 31, which Emmis consolidates into its fiscal year ending February 28 (29). The preliminary purchase price allocation is as follows:

Asset Description		Amount				Asset Lives
Accounts receivable		$	2,126			Less than one year
Other current assets			1,486			Less than one year
Broadcasting equipment			2,649			5 years
International broadcast license			9,787			94 months
Goodwill			2,300			Non-amortizing
Investment and other long-term assets			160			14 months
Less: current liabilities			(3,645	)
Less: deferred tax liabilities			(2,300	)
Total purchase price		$	12,563

Acquisition of Radio Network in Bulgaria

     On November 14, 2005, Emmis acquired a 66.5% (economic and voting) majority ownership in Radio FM Plus AD, a national network of radio stations in Bulgaria for a cash purchase price of approximately $3.2 million. This acquisition allowed Emmis to expand its international radio portfolio within

Emmis’ Euro-centric international acquisition strategy. The acquisition was financed with cash on hand. The Company has recorded $0.6 million of goodwill, none of which is deductible for income tax purposes. Consistent with the Company’s other foreign subsidiaries, Radio FM Plus reports on a fiscal year ending December 31, which Emmis consolidates into its fiscal year ending February 28 (29). Thus, the first results that Emmis will consolidate into its financial statements will be the period from November 14 to December 31, 2005, which Emmis will consolidate into its quarter ending February 28, 2006. The preliminary purchase price allocation, which is included in Emmis’ condensed consolidated balance sheet as of November 30, 2005, is as follows:

Asset Description		Amount				Asset Lives
Accounts receivable		$	205			Less than one year
Other current assets			16			Less than one year
Broadcasting equipment			571			5 years
International broadcast license			3,434			87 months
Goodwill			600			Non-amortizing
Investment and other long-term assets			15
Less: current liabilities			(370	)
Less: deferred tax liabilities			(600	)
Less: minority interest			(648	)
Total purchase price		$	3,223

Note 4. Pro Forma Financial Information

     Unaudited pro forma summary information is presented below for the three-month and nine-month periods ended November 30, 2004 and 2005, assuming the acquisition (and related net debt repayments associated with the Phoenix disposition) of (i) WLUP-FM in January 2005, (ii) D.EXPRES in Slovakia in March 2005, and (iii) Radio FM Plus in Bulgaria in November 2005 had occurred on the first day of the pro forma periods presented below.

     Preparation of the pro forma summary information was based upon assumptions deemed appropriate by the Company’s management. The pro forma summary information presented below is not necessarily indicative of the results that actually would have occurred if the transactions indicated above had been consummated at the beginning of the periods presented, and is not intended to be a projection of future results.

		Three Months Ended November 30,								Nine Months Ended November 30,
		2004				2005				2004				2005
		(Pro Forma)								(Pro Forma)
Net revenues		$	94,332			$	100,918			$	285,682			$	305,049
Net income (loss) from continuing operations		$	6,759			$	2,494			$	(62,041	)		$	11,119
Net income (loss) available to common shareholders from continuing operations		$	4,513			$	248			$	(68,779	)		$	4,381
Net income (loss) per share available to common shareholders from continuing operations:
Basic		$	0.08			$	0.01			$	(1.23	)		$	0.10
Diluted		$	0.08			$	0.01			$	(1.23	)		$	0.10
Weighted average shares outstanding:
Basic			56,214				36,879				56,042				44,700
Diluted			56,307				37,305				56,042				45,056

Nine-month period ended November 30, 2004 includes a $97.3 million loss on debt extinguishment related to debt refinancing activity.

Note 5. Comprehensive Income (Loss)

     Comprehensive income (loss) was comprised of the following for the three-month and nine-month periods ended November 30, 2004 and 2005:

		Three Months Ended								Nine Months Ended
		November 30,								November 30,
		2004				2005				2004				2005
Net income (loss)		$	19,805			$	200,021			$	(38,469	)		$	218,829
Translation adjustment			163				98				264				(2,348	)
Total comprehensive income (loss)		$	19,968			$	200,119			$	(38,205	)		$	216,481

Note 6. Segment Information

     Subsequent to the reclassification of television to discontinued operations, the Company’s operations are aligned into two business segments: Radio and Publishing and Other. These business segments are consistent with the Company’s management of these businesses and its financial reporting structure. Corporate represents expense not allocated to reportable segments.

     The Company’s segments operate primarily in the United States with one radio station located in Hungary, nine radio stations located in Belgium and a radio network in Slovakia and Bulgaria. The following table summarizes the net revenues and long-lived assets of our international properties included in our condensed consolidated financial statements.

		Net Revenues								Net Revenues								Long-lived Assets
		Three Months Ended November 30,								Nine Months Ended November 30,								As of November 30,
		2004				2005				2004				2005				2004				2005
Hungary		$	3,988			$	3,900			$	11,703			$	13,402			$	8,121			$	6,023
Belgium			46				184				46				605				4,158				3,417
Slovakia			N/A				1,835				N/A				4,768				N/A				13,910
Bulgaria			N/A				N/A				N/A				N/A				N/A				4,621

     We sold our controlling interest in two radio stations in Argentina in May 2004. Results from operations for these two stations have been classified as discontinued operations in the nine-month period ended November 30, 2004.

     In the quarter ended August 31, 2005, Emmis concluded its television assets were held for sale in accordance with Statement No. 144. Accordingly, the results of operations of the television division have been classified as discontinued operations in the accompanying condensed consolidated financial statements (see Note 1) and excluded from the segment disclosures below.

     The accounting policies as described in the summary of significant accounting policies included in the Company’s Annual Report filed on Form 10-K for the year ended February 28, 2005 and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments.

Three Months Ended						Publishing
November 30, 2005		Radio				and Other				Corporate				Consolidated
						(Unaudited)
Net revenues		$	76,017			$	24,500			$	—			$	100,517
Station operating expenses, excluding noncash compensation			42,433				19,849				—				62,282
Corporate expenses, excluding noncash compensation			—				—				5,790				5,790
Noncash compensation			869				228				1,570				2,667
Depreciation and amortization			2,448				180				1,646				4,274
Operating income (loss)		$	30,267			$	4,243			$	(9,006	)		$	25,504
Assets — continuing operations		$	1,094,189			$	87,341			$	488,064			$	1,669,594
Assets — discontinued operations			13,066				—				427,368				440,434
Total Assets		$	1,107,255			$	87,341			$	915,432			$	2,110,028

Three Months Ended						Publishing
November 30, 2004		Radio				and Other				Corporate				Consolidated
						(Unaudited)
Net revenues		$	69,380			$	20,816			$	—			$	90,196
Station operating expenses, excluding noncash compensation			38,027				16,955				—				54,982
Corporate expenses, excluding noncash compensation			—				—				7,318				7,318
Noncash compensation			1,226				534				1,308				3,068
Depreciation and amortization			2,067				216				1,641				3,924
Operating income (loss)		$	28,060			$	3,111			$	(10,267	)		$	20,904
Assets — continuing operations		$	954,442			$	83,816			$	73,034			$	1,111,292
Assets — discontinued operations			160,232				—				1,023,666				1,183,898
Total Assets		$	1,114,674			$	83,816			$	1,096,700			$	2,295,190

Nine Months Ended						Publishing
November 30, 2005		Radio				and Other				Corporate			Consolidated
						(Unaudited)
Net revenues		$	237,500			$	65,396			$	—			$	302,896
Station operating expenses, excluding noncash compensation			130,343				57,861				—				188,204
Corporate expenes, excluding noncash compensation			—				—				19,391				19,391
Noncash compensation			2,831				855				4,530				8,216
Depreciation and amortization			7,043				535				4,890				12,468
Operating income (loss)		$	97,283			$	6,145			$	(28,811	)		$	74,617
Assets — continuing operations		$	1,094,189			$	87,341			$	488,064			$	1,669,594
Assets — discontinued operations			13,066				—				427,368				440,434
Total Assets		$	1,107,255			$	87,341			$	915,432			$	2,110,028

Nine Months Ended						Publishing
November 30, 2004		Radio				and Other				Corporate				Consolidated
						(Unaudited)
Net revenues		$	213,290			$	57,654			$	—			$	270,944
Station operating expenses, excluding noncash compensation			113,835				50,187				—				164,022
Corporate expenses, excluding noncash compensation			—				—				23,354				23,354
Noncash compensation			3,815				1,679				3,488				8,982
Depreciation and amortization			6,623				643				4,769				12,035
Operating income (loss)		$	89,017			$	5,145			$	(31,611	)		$	62,551
Assets — continuing operations		$	954,442			$	83,816			$	73,034			$	1,111,292
Assets — discontinued operations			160,232				—				1,023,666				1,183,898
Total Assets		$	1,114,674			$	83,816			$	1,096,700			$	2,295,190