Acquisition

6 Months Ended

Jun. 30, 2011

Acquisition

Acquisition

5. ACQUISITION

On January 3, 2011, the Company completed the acquisition of Lotus/Entravision Reps LLC ("LER"), a representation firm that sells national spots and digital advertising to advertising agencies on behalf of the Company and other clients. The Company previously owned 50 percent of LER which was accounted for under the equity method. The Company decided to acquire the 50 percent of LER that it did not own in order to integrate LER's sales force with the Company's radio operations. The Company paid $1.1 million for the remaining 50 percent of LER, subject to adjustment, as follows: $0.7 million at closing and an additional amount of approximately $0.4 million to be paid based on LER's working capital. Any adjustment relating to working capital must be finalized by October 30, 2011.

As a result of the Company obtaining control over LER, the Company's previously held 50 percent interest was remeasured to its fair value of $1.1 million. The resulting gain of $0.7 million is included in the line item 'Other income (loss)' on the consolidated statement of operations.

The following is a summary of the initial purchase price allocation for the Company's acquisition of LER (unaudited; in millions):

Cash and cash equivalents	$	0.5
Trade accounts receivable		2.1
Prepaids and other assets		0.1
Property and equipment		0.1
Intangible assets subject to amortization		0.5
Goodwill		0.7
Current liabilities		(1.8	)
	$	2.2

The goodwill, which is expected to be deductible for tax purposes, is assigned to the radio broadcasting segment and is attributable to expected synergies from combining LER's operations with the Company's. The changes in the carrying amount of goodwill for each of the Company's operating segments for the six-month period ended June 30, 2011 are as follows (in thousands):

	December 31, 2010		Acquisition		June 30, 2011
Television	$	35,912	$	—	$	35,912
Radio		—		735		735
Total	$	35,912	$	735	$	36,647

The acquired receivables approximate their fair value inclusive of collection risk, which was not significant. Acquisition-related costs were not significant and LER's revenue and net income were not significant to the Company's results for any of the periods presented.