Year ended February 28 (29),
                             2007           % of Total           2008           % of Total           2009           % of Total

Net revenues:
Local                      $ 232,509               65.2 %      $ 233,086               65.1 %      $ 210,076               62.9 %
National                      64,943               18.2 %         62,083               17.3 %         57,753               17.3 %
Publication Sales             13,340                3.7 %         14,220                4.0 %         14,006                4.2 %
Non Traditional               22,191                6.2 %         21,591                6.0 %         18,973                5.7 %
Other                         23,780                6.7 %         27,079                7.6 %         33,065                9.9 %


Total net revenues         $ 356,763                           $ 358,059                           $ 333,873

A significant portion of our expenses varies in connection with changes in revenue. These variable expenses primarily relate to costs in our sales department, such as salaries, commissions and bad debt. Our costs that do not vary as much in relation to revenue are mostly in our programming and general and administrative departments, such as talent costs, syndicated programming fees, utilities, office expenses and salaries. Lastly, our costs that are highly discretionary are costs in our marketing and promotions department, which we primarily incur to maintain and/or increase our audience and market share.

KNOWN TRENDS AND UNCERTAINTIES
Although the slowing global economy has negatively impacted advertising revenues for a wide variety of media businesses, domestic radio revenue growth has been challenged for several years. Management believes this is principally the result of four factors unrelated to the slowing economy: (1) the emergence of new media, such as various media content distributed via the Internet and cable interconnects, which are gaining advertising share against radio and other traditional media, (2) the perception of investors and advertisers that satellite radio and portable media players diminish the effectiveness of radio advertising, (3) advertisers' lack of confidence in the ratings of radio stations due to dated ratings-gathering methods, and (4) a lack of inventory and pricing discipline by radio operators.
The radio industry has begun several initiatives to address these issues, most notable of which is the rollout of HD Radio®. HD Radio offers listeners advantages over standard analog broadcasts, including improved sound quality and additional digital channels. To make the rollout of HD Radio more efficient, a consortium of broadcasters representing a majority of the radio stations in nearly all of our markets have agreed to work together to coordinate the programming on secondary channels in each radio market to ensure a more diverse consumer offering and to accelerate the rollout of HD Radio receivers, particularly in automobiles. 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 will use to transmit location-based data to hand-held and in-car navigation devices. We currently utilize HD Radio digital technology on most of our FM stations. It is unclear what impact HD Radio will have on the markets in which we operate.
Arbitron Inc., the supplier of ratings data for United States radio markets, has developed technology to passively collect data for its ratings service. The Portable People MeterTM is a small, pager-sized device that does not require any active manipulation by the end user and is capable of automatically measuring radio, television, Internet, satellite radio and satellite television signals that are encoded for the service by the broadcaster. The PPMTM offers a number of advantages over the traditional diary ratings collection system including ease of use, more reliable ratings data and shorter time periods between when advertising runs and when audience listening or viewing habits can be reported. This service began in the New York, Los Angeles and Chicago markets in October 2008 and is scheduled to begin for most of our other radio markets by September 2010. In each market, there has been a compression in the relative ratings of all stations in the market, enhancing the competitive pressure within the market for advertising dollars. In addition, ratings for certain stations when measured by the PPMTM as opposed to the traditional diary methodology can be materially different. The Company continues to evaluate the impact PPMTM will have on our revenues in these markets.
As discussed below, our reformatted stations in Los Angeles and New York have negatively impacted their radio cluster's performance in their respective markets. Our Los Angeles and New York markets collectively account for approximately 50% of our domestic radio revenues.
Although our radio cluster in Los Angeles (consisting of two stations) exceeded the performance of the overall Los Angeles radio market during the year ended February 28, 2009, reformatted station KMVN-FM tempered our results. For the year ended February 28, 2009, our Los Angeles radio stations' gross revenues were down 14.8% versus the same period in the prior year, whereas the independent accounting firm Miller, Kaplan, Arase & Co., LLP ("Miller Kaplan") reported that Los Angeles radio market total gross revenues were down 15.9%. KMVN-FM lagged the market and its gross revenues were down 22.1% for the year. Subsequent to our fiscal year end, we entered into a Local Programming and Marketing Agreement with a subsidiary of Grupo Radio Centro, S.A.B. de C.V. ("GRC"), under which GRC will pay Emmis $7 million dollars per year (and reimburse certain expenses) in exchange for the right to provide Emmis with programming for KMVN-FM for up to seven years. At any time during the LMA, GRC has the right to purchase the station for $110 million. At the end of the LMA, Emmis has the right to require GRC to purchase the station for the same amount.
Our radio cluster in New York trailed the performance of the overall New York radio market during the year ended February 28, 2009. For the year ended February 28, 2009, our New York radio stations' gross revenues were down 18.9%, whereas the independent accounting firm Miller Kaplan reported that New York radio market total gross revenues were down 11.5% versus the same period of the prior year. The results of our New York radio stations were negatively impacted by our reformatted station, WRXP-FM, whose gross revenues were down 60.4%. A radio station that was a primary competitor to WRXP-FM recently changed its format and no longer competes directly with WRXP. We are hopeful this development will help WRXP grow its audience and revenue share in fiscal 2010. Collectively, our other two stations in the New York radio market exceeded the performance of the overall New York radio market during the year ended February 28, 2009.

As part of our business strategy, we continually evaluate potential acquisitions of international radio stations, publishing properties and other businesses that we believe hold promise for long-term appreciation in value and leverage our strengths. 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 derive materially different results under different assumptions and conditions. We believe that our critical accounting policies are those described below.
Impairment of Goodwill and Indefinite-lived Intangibles The annual impairment tests (and when indicators of impairment are present, the interim impairment tests) for goodwill and indefinite-lived intangibles under Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets (SFAS No. 142), require us to make certain assumptions in determining fair value, including assumptions about the cash flow growth rates of our businesses. Additionally, the fair values are significantly impacted by macro-economic factors, including market multiples at the time the impairment tests are performed. Accordingly, we may incur additional impairment charges in future periods under SFAS No. 142 to the extent we do not achieve our expected cash flow growth rates, or to the extent that market values decrease.
Allocations for Purchased Assets
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 February 28, 2009, we have recorded approximately $526.2 million in FCC licenses and goodwill, which represents 71% of our total assets. In assessing the recoverability of these assets, we conduct impairment testing required by SFAS No. 142 at least annually and charge to operations an impairment expense if the recorded value of these assets is more than their fair value. In fiscal 2009, we recorded a noncash impairment loss of $304.6 million related to radio FCC licenses and $58.3 million related to goodwill ($18.2 million related to domestic radio goodwill, $8.2 million related to international radio goodwill and $31.9 related to publishing division goodwill). We believe our estimate of the value of our radio broadcasting licenses and goodwill assets is a critical accounting estimate as the value is significant in relation to our total assets, and our estimate of the value uses assumptions that incorporate variables based on past experiences and judgments about future performance of our stations. These variables include but are not limited to: (1) the forecasted growth rate of each radio market, including population, household income, retail sales and other expenditures that would influence advertising expenditures; (2) market share and profit margin of an average station within a market; (3) estimated capital start-up costs and losses incurred during the early years;
(4) risk-adjusted discount rate; (5) the likely media competition within the market area; and (6) terminal values. Changes in our estimates of the fair value of these assets could result in material future period write-downs in the carrying value of our broadcasting licenses and goodwill assets.
Deferred Taxes and Effective Tax Rates We estimate the effective tax rates and associated liabilities or assets for each legal entity in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS No. 109). These estimates are based upon our interpretation of United States and local tax laws as they apply to our legal entities and our overall tax structure. Audits by local tax jurisdictions, including the United States Government, could yield different interpretations from our own and cause the Company to owe more taxes than originally recorded. We utilize experts in the various tax jurisdictions to evaluate our position and to assist in our calculation of our tax expense and related liabilities.
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 $1.4 million and $0.9 million accrued for employee healthcare claims as of February 29, 2008 and February 28, 2009, respectively. The Company also maintains large deductible programs (ranging from $250 thousand to $500 thousand per occurrence) for workers compensation, employment liability, automotive liability and media liability claims.

Valuation of Stock Options
The Company determines the fair value of its employee stock options at the date of grant using a Black-Scholes option-pricing model. The Black-Scholes option pricing model was developed for use in estimating the value of exchange-traded options that have no vesting restrictions and are fully transferable. The Company's employee stock options have characteristics significantly different than these traded options. In addition, option pricing models require the input of highly subjective assumptions, including the expected stock price volatility and expected term of the options granted. The Company relies heavily upon historical data for its stock price when determining expected volatility, but each year the Company reassesses whether or not historical data is representative of expected results.
ACQUISITIONS, DISPOSITIONS AND INVESTMENTS During the three-year period ended February 28, 2009, we acquired Orange Coast and two Bulgarian radio networks for an aggregate cash purchase price of $16.7 million. We also disposed of five television stations and two domestic radio stations, collectively receiving gross cash proceeds of $409.0 million. A recap of the material transactions completed during the three years ended February 28, 2009 is summarized hereafter. These transactions impact the comparability of operating results year over year.
On July 18, 2008, Emmis completed the sale of its sole remaining television station, WVUE-TV in New Orleans, LA, to Louisiana Media Company LLC for $41.0 million in cash. The Company recognized a loss on the sale of WVUE-TV of $0.6 million, net of tax benefits of $0.4 million, which is included in income from discontinued operations in the accompanying statements of operations. In connection with the sale, the Company paid discretionary bonuses to the employees of WVUE totaling $0.8 million, which is included in the calculation of the loss on sale. The sale of WVUE-TV completes the sale of our television division which began on May 10, 2005, when Emmis announced that it had engaged advisors to assist in evaluating strategic alternatives for its television assets.
On December 17, 2007, Emmis completed its acquisition of 100% of the shares of Infopress & Company OOD for $8.8 million in cash. Infopress & Company OOD operates Inforadio, a national radio network broadcasting to 13 Bulgarian cities. Inforadio joins Emmis' majority owned Bulgarian radio networks Radio FM+ and Radio Fresh. Emmis believes the acquisition of Inforadio further strengthens its footprint in Bulgaria. Consistent with our other foreign subsidiaries, Inforadio reports on a fiscal year ending December 31, which Emmis consolidates into its fiscal year ending February 28 (29). The operating results of Inforadio from December 17, 2007 through December 31, 2007 are included in the accompanying consolidated statements of operations.
On July 25, 2007, Emmis completed its acquisition of Orange Coast Kommunications, Inc., publisher of Orange Coast, for $6.9 million in cash including acquisition costs of $0.2 million. Approximately $0.3 million of the purchase price was withheld at the original closing, but was subsequently paid in April 2008. Orange Coast fits Emmis' niche of publishing quality city and regional magazines. Orange Coast serves the affluent area of Orange County, CA, and may also provide synergies with our other magazine in southern California, Los Angeles. The operating results of Orange Coast from July 25, 2007 are included in the accompanying consolidated statements of operations.
On June 4, 2007, Emmis closed on its sale of KGMB-TV in Honolulu to HITV Operating Co, Inc. for $40.0 million in cash. Emmis recorded a gain on sale of $10.1 million, net of tax, which is included in discontinued operations in the accompanying consolidated statement of operations.
On March 27, 2007, Emmis closed on its sale of KMTV-TV in Omaha, NE to Journal Communications, Inc. (Journal) and received $10.0 million in cash. Journal had been operating KMTV-TV under a Local Programming and Marketing Agreement since December 5, 2005.
On October 31, 2006, Emmis sold land and the associated building formerly occupied by WKCF-TV to Goodlife Broadcasting, Inc. for $3.0 million in cash. Emmis recorded a gain on sale of $0.3 million, net of tax, which is included in discontinued operations in the accompanying consolidated statements of operations.
On August 31, 2006, Emmis closed on its sale of WKCF-TV in Orlando, FL to Hearst-Argyle Television Inc. for $217.5 million in cash. Emmis recorded a gain on sale of $93.4 million, net of tax, which is included in discontinued operations in the accompanying consolidated statements of operations.

On July 11, 2006, Emmis closed on its sale of KKFR-FM in Phoenix, AZ to Bonneville International Corporation for $77.5 million in cash and also sold certain tangible assets to Riviera Broadcast Group LLC for $0.1 million in cash. Emmis recorded a gain on sale of $11.3 million, net of tax, which is included in discontinued operations in the accompanying consolidated statements of operations.
On July 7, 2006, Emmis closed on its sale of WBPG-TV in Mobile, AL / Pensacola, FL to LIN Television Corporation for $3.0 million in cash. LIN Television Corporation had been operating WBPG-TV under a Local Programming and Marketing Agreement since November 30, 2005. Emmis recorded a gain on sale of $1.1 million, net of tax, which is included in discontinued operations in the accompanying consolidated statements of operations.
On May 5, 2006, Emmis closed on its sale of WRDA-FM in St. Louis, MO to Radio One, Inc. for $20.0 million in cash. Emmis recorded a gain on sale of $4.2 million, net of tax, which is included in discontinued operations in the accompanying consolidated statements of operations.
RESULTS OF OPERATIONS

YEAR ENDED FEBRUARY 29, 2008 COMPARED TO YEAR ENDED FEBRUARY 28, 2009
Net revenue pro forma reconciliation:
   Since March 1, 2007, we have acquired Orange Coast and a national radio
network in Bulgaria. The results of our television division, Tu Ciudad Los
Angeles publication and Emmis Books have been included in discontinued
operations and are not included in reported results below. The following table
reconciles actual results to pro forma results.

                                                   Year ended February 28 (29),
                                                    2008                   2009             $ Change          % Change
                                                                        (amounts in thousands)
Reported net revenues
Radio                                          $      266,120         $      250,883        $ (15,237 )            -5.7 %
Publishing                                             91,939                 82,990           (8,949 )            -9.7 %

Total                                                 358,059                333,873          (24,186 )            -6.8 %

Plus: Net revenues from stations acquired
Radio                                                     604                      -
Publishing                                              2,774                      -

Total                                                   3,378                      -

Pro forma net revenues
Radio                                                 266,724                250,883          (15,841 )            -5.9 %
Publishing                                             94,713                 82,990          (11,723 )           -12.4 %

Total                                          $      361,437         $      333,873        $ (27,564 )            -7.6 %

For further disclosure of segment results, see Note 16 to the accompanying consolidated financial statements. For additional pro forma results, see Note 11 to the accompanying consolidated financial statements. Consistent with management's review of the Company, the pro forma results above include the impact of all material consummated acquisitions and dispositions through February 28, 2009.

Net revenues discussion:
Radio net revenues decreased principally as a result of weak advertising demand in all of our domestic radio markets. On a pro forma basis (assuming the purchase of the radio network in Bulgaria had occurred on the first day of the pro forma periods presented above), radio net revenues for the year ended February 28, 2009 decreased $15.8 million, or 5.9%. We typically monitor the performance of our domestic radio stations against the aggregate performance of the markets in which we operate based on reports for the periods prepared by the independent accounting firm Miller Kaplan. Miller Kaplan reports are generally prepared on a gross revenue basis and exclude revenues from barter arrangements. For the year ended February 28, 2009, revenues of our domestic radio stations were down 14.4%, whereas Miller Kaplan reported that revenues of our domestic radio markets were down 11.6%. We underperformed the markets in which we operate principally due to the continuing challenge of our reformatted stations in our Los Angeles and New York markets. Excluding WRXP-FM in New York and KMVN-FM in Los Angeles, revenues for our domestic radio markets would have been down 11.2%. Our New York and Los Angeles stations account for approximately 50% of our domestic radio revenues.
Market weakness and our stations' weakness has led us to discount our rates charged to advertisers. In fiscal 2009, our average unit rate was down 14.7% and our number of units sold was down 0.5%. The Company's national representation firm guaranteed a minimum amount of national sales for the year ended February 28, 2009. Actual national sales, as defined by the representation agreement, were approximately $10.2 million lower than the guaranteed minimum amount of national sales and the national representation firm has paid the shortfall to Emmis. As such, Emmis recognized $10.2 million of additional net revenues for the year ended February 28, 2009. Emmis recognized $3.7 million of additional net revenues related to the national representation firm's shortfall during the year ended February 29, 2008. Our agreement with our national representation firm does not contain guarantees for any period after the year ended February 28, 2009.
Revenue growth of our international radio stations has helped to partially offset weakness domestically. On a pro forma basis for the year ended February 28, 2009, international net revenues were up $6.2 million or 14.9%. The revenue growth internationally was mostly concentrated at our Hungary and Slovakia radio stations.
Publishing net revenues decreased principally due to the slowing economy during the latter half of calendar 2008 and the first two months of calendar 2009 that diminished demand for advertising inventory at all of our city/regional publications.
On a consolidated basis, pro forma net revenues for the year ended February 28, 2009 decreased $27.6 million, or 7.6%, due to the effect of the items described above.
Station operating expenses excluding depreciation and amortization expense pro forma reconciliation:
Since March 1, 2007, we have acquired Orange Coast and a national radio network in Bulgaria. The results of our television division, Tu Ciudad Los Angeles publication and Emmis Books have been included in discontinued operations and are not included in reported results below. The following table reconciles actual results to pro forma results.

                                                  Year ended February 28 (29),
                                                   2008                   2009             $ Change          % Change
                                                                       (amounts in thousands)
Reported station operating expenses
excluding depreciation and amortization
expense
Radio                                         $      188,440         $      180,749        $  (7,691 )            -4.1 %
Publishing                                            78,258                 76,322           (1,936 )            -2.5 %

Total                                                266,698                257,071           (9,627 )            -3.6 %

Plus: Station operating expenses
excluding depreciation and amortization
expense from stations acquired:
Radio                                                    567                      -
Publishing                                             2,894                      -

Total                                                  3,461                      -

Pro forma station operating expenses
excluding depreciation and amortization
expense
Radio                                                189,007                180,749           (8,258 )            -4.4 %
Publishing                                            81,152                 76,322           (4,830 )            -6.0 %

Total                                         $      270,159         $      257,071        $ (13,088 )            -4.8 %

For further disclosure of segment results, see Note 16 to the accompanying consolidated financial statements. For additional pro forma results, see Note 11 to the accompanying consolidated financial statements. Consistent with management's review of the Company, the pro forma results above include the . . .