4. Equity and Other Investments

The Company’s equity and other investments consisted of the following (in thousands):


	December 31, 2012		December 31, 2011
Equity investment	$	12,501	$	13,210
Cost investment		—		1,703

Equity and other investments	$	12,501	$	14,913

Equity investment. The Company’s 49.5% investment in Scarborough Research (“Scarborough”), a Delaware general partnership, is accounted for using the equity method of accounting. Under the Scarborough partnership agreement, the Company has the exclusive right to license Scarborough’s services to radio broadcasters, cable companies, out-of-home media, and advertisers and advertising agencies. The Company pays a royalty fee to Scarborough based on a percentage of revenues. Royalties of $29.2 million, $26.2 million, and $26.2 million for 2012, 2011, and 2010, respectively, are included in cost of revenue in the Company’s consolidated statements of income. Accrued royalties due to Scarborough as of December 31, 2012, and 2011, of $5.3 million and $5.1 million, respectively, are recorded in accrued expenses and other current liabilities in the consolidated balance sheets.

Scarborough’s revenue was $67.5 million, $65.7 million, and $64.3 million in 2012, 2011 and 2010, respectively. Scarborough’s net income was $15.2 million, $14.5 million, and $14.2 million, respectively in the same periods. Scarborough’s total assets and liabilities as of December 31, 2012, were $26.0 million and $4.6 million, respectively, and $25.0 million and $2.9 million, as of December 31, 2011, respectively.

Cost investment. During the month ended July 31, 2012, the Company sold its $1.7 million preferred stock investment in TRA Global, Inc. (“TRA”). Prior to the sale, the TRA investment was accounted for using the cost method of accounting. The proceeds from the sale were approximately equal to the investment’s carrying value. Cash proceeds received from the sale amounted to approximately $1.5 million as of December 31, 2012, with an additional $0.2 million deposited in escrow. The escrow funds will be released to the Company in January 2014, less any claims pending against the escrow account. The escrow fund deposit is recorded on the Company’s balance sheet as a portion of the Company’s non-current assets. During the fourth quarter ended December 31, 2011, the Company determined that the fair value of its investment in TRA fell below its carrying value and the Company recorded a $3.5 million impairment charge. The following table shows the investment activity for each of the Company’s affiliates during 2012, 2011, and 2010.

Summary of Investment Activity in Affiliates (in thousands)


	Year Ended December 31, 2012									Year Ended December 31, 2011									Year Ended December 31, 2010
	Scarborough			TRA			Total			Scarborough			TRA			Total			Scarborough			TRA		Total
Beginning balance	$	13,210		$	1,703		$	14,913		$	13,205		$	5,180		$	18,385		$	13,538		$	3,400	$	16,938
Equity in net income		7,216			—			7,216			7,255			—			7,255			7,092			—		7,092
Impairment loss		—			—			—			—			(3,477	)		(3,477	)		—			—		—
Distributions from investee		(7,925	)		—			(7,925	)		(7,250	)		—			(7,250	)		(7,425	)		—		(7,425	)
Proceeds from sale of investment		—			(1,466	)		(1,466	)		—			—			—			—			—		—
Receivable from sale of investment		—			(214	)		(214	)		—			—			—			—			—		—
Loss on sale of investment		—			(23	)		(23	)		—			—			—			—			—		—
Cash investments		—			—			—			—			—			—			—			1,780		1,780

Ending balance	$	12,501		$	—		$	12,501		$	13,210		$	1,703		$	14,913		$	13,205		$	5,180	$	18,385