The following table summarizes the impairment losses recorded by the Company in 2009, 2010 and 2011 as a result of impairment reviews:

	Impairment losses recorded

	2009			2010		2011
Broadcasting licenses:
Peretz umbrella license	$	—		$	—	$	5,300
Peretz regional licenses		—			—		5,582
CTC regional licenses		17,015			—		7,278
Domashny regional licenses		1,724			—		5,398
Total broadcasting licenses	$	18,739			—	$	23,558

Peretz Network's goodwill		—			—		71,688

DTV trade name		—			—		11,136

Total impairment losses	$	18,739		$	—	$	106,382

Income tax effect		(3,748	)		—		(6,939	)

Total effect on consolidated net income	$	14,991		$	—	$	99,443

As of December 31, 2009, the Company recorded non-cash impairment losses totaling $18,739 related to certain broadcasting licenses in the CTC and Domashny Television Station Groups. The decline in the fair value of these broadcasting licenses below book value was primarily the result of the change in the weight given to panel cities by TNS Russia. Certain cities in which the Company holds licenses were given less weight than in the previous panel survey, reducing the value of these licenses.

As of December 31, 2010, the Company performed its annual impairment review, which did not result in any further impairment losses.

In the 2010 annual impairment review, the Company concluded that the fair values of its reporting units and long-lived assets had increased, when compared to 2009 and 2008, reflecting the improving macroeconomic conditions from the downturn in the economy that started in 2008. Although conditions generally improved 2009-2010, and the advertising market recovered, considerable uncertainty remains concerning economic stability globally in the medium-term (2012-2016). Many of the largest advertisers in the Russian market, including many of the largest advertisers on CTC, Domashny and Peretz, are multinational companies that sell consumer products on a worldwide basis. In the third quarter of 2011, some large advertisers reduced their initially planned advertising expenditures for 2011 as a whole. As the result of an interim impairment review performed as of September 30, 2011, the Company recorded non-cash impairment losses totaling $5,707 related to several regional broadcasting licenses (most of them acquired in 2007-2008), primarily due to a decrease in cash flows projections in response to the more conservative forecast for advertising market growth for 2012 and thereafter. Although the Company decreased its forecast for advertising market in its September 30, 2011 interim impairment tests, there was still an insufficient visibility on the advertising spending for 2012, due to the overall economic uncertainty concerning economic stability globally in the medium-term, including uncertainty over the impact of changes in global economy to Russian television advertising market. The Company used forecasts of Russian television advertising market growth based on available internal and external estimates, including estimates of industry experts and analysts and publicly available information disclosed by other media agencies.

The Peretz Network reporting unit, Peretz umbrella broadcasting license and certain regional broadcasting licenses are the most sensitive to changes in the television advertising growth assumptions. In addition, the Peretz Network reporting unit and Peretz umbrella broadcasting license are sensitive to Peretz's audience share assumptions. During 2011, the audience share of Peretz channel was below the forecasted audience share, as a result of increased competition and underperformance of certain programs. This relative underperformance resulted in a corresponding decrease in forecasted future audience share in valuation model.

As of September 30, 2011, carrying values of the Peretz reporting unit and its broadcasting umbrella license decreased from 33% and 24% to 5% and 15%, respectively, when compared with the fair values estimated during the 2010 annual impairment test. As of December 31, 2011, based on the further impairment review performed at December 31, 2011, carrying values of Peretz goodwill and its broadcasting umbrella license were written down to their fair values, as described below.

In the fourth quarter of 2011, media agencies and analysts revised their estimates on the Russian television advertising market growth downwards which the Company concluded was an additional impairment indicator. In addition, the Company obtained more visibility on the advertising pricing for 2012 internally. Accordingly, the Company has revised estimates of future cash flows in the impairment review performed at December 31, 2011, primarily to reflect the revised expectations of Russian advertising market growth for 2012 and increased uncertainty in the medium-term. Although the Company continued to project future long-term growth in cash flows, such growth is lower than that assumed in the annual impairment test performed during 2010, due to the reasons described above. As of December 31, 2011, the Company recorded additional non-cash impairment losses of $12,550 related to several regional broadcasting licenses, $5,300 related to Peretz umbrella broadcasting license and $71,688 related to Peretz goodwill.

The table below represents the carrying values of the Company's indefinite lived assets, for which a hypothetical further 10% and 15% decrease in the fair value of each indefinite lived asset/or reporting unit would have resulted in additional impairment:

	Carrying amount of assets, as of December 31, 2011, for which hypothetical 10% and 15% decrease in the fair value of each asset/ reporting unit would have resulted in additional impairment:

	10%		15%
Broadcasting licenses:
Peretz umbrella license		48,136		48,136
Peretz regional licenses		22,058		22,058
CTC regional licenses		18,762		18,762
Domashny regional licenses		17,496		17,496
Peretz Network's goodwill		58,453		58,453

Total		164,905		164,905

Other than with respect to the assets/or reporting units identified above, hypothetical 10% and 15% decreases in the fair value of each indefinite lived asset/or reporting unit would not have resulted in additional impairment.

The Company's estimate of the total advertising market for 2012 and thereafter is highly dependent on the changing macroeconomic environment. There is considerable uncertainty concerning economic stability globally in the medium-term, including uncertainty over the impact of changes in the global economy on the Russian television advertising market. The Company used forecasts of Russian television advertising market growth based on all available internal and external estimates, including estimates of industry experts and analysts and publicly available information disclosed by other media agencies. In order to check the reasonableness of the fair values implied by cash flow estimates, the Company also calculates the value of its common stock implied by its cash flow forecasts and compares this to actual traded values. As of December 31, 2011, the Company's consolidated net book value (or shareholders' equity) amounted to $697,208 (after the impairment losses recorded in 2011 as a result of impairment review, as described above). This compares to a market capitalization of the Company of $1,379,697 as of December 31, 2011 ($1,530,724 as of February 23, 2012).

The potential negative trends in the macroeconomic environment may further adversely affect the total Russian television advertising market and, in turn, the fair values of the respective assets or reporting units. Any further decrease in advertising market forecast could result in decreases in these assets' fair values and the Company to record additional impairment losses. In order to evaluate the sensitivity of the fair value calculations in its impairment analysis, the Company applied hypothetical 5 and 10 percentage points decreases to the 2012 television advertising market growth forecast:

	Additional impairment loss that could be recorded if 2012 advertising market growth forecast is lower by:

	5 pp		10 pp
*Broadcasting licenses:**
Peretz umbrella license	$	6,575	$	13,100
CTC regional licenses		1,453		2,628
Domashny regional licenses		998		1,909
Peretz regional licenses		1,087		2,605
Peretz Network's goodwill		9,533		17,067

Total	$	19,646	$	37,309

This sensitivity analysis assumes a hypothetical change in advertising market growth with all other variables constant, i.e. it does not consider the effect of changes on other key assumptions; in practice, changes in other key assumptions could magnify or counteract the sensitivities. In addition, the sensitivity analysis does not consider any corrective action that the Company may take to mitigate the impact of any adverse changes in the advertising market growth.

The fair value estimates are also highly sensitive to the cost of capital used by the Company in the discounting of expected cash flows attributable to indefinite-lived assets and reporting units. The potential negative trends in the macroeconomic environment could increase the risk to investors investing in Russian markets, which could increase the cost of capital, which in turn will decrease the fair value of the respective assets or reporting units. Additionally, changes in the financial markets, such as an increase in interest rates or an increase in the expected required return on equity by market participants within the industry, could increase the discount rate, thus decreasing the fair value of assets. The cost of capital used by the Company in its analysis ranged from 13.5% to 18.4% in 2010 and 13.4% to 17.7% in 2011, based on the level of risk related to each particular asset or reporting unit.

In order to evaluate the sensitivity of the fair value calculations in its impairment analysis, the Company applied a hypothetical 3 percentage point increase to the cost of capital used:

	Additional impairment loss that could be recorded if cost of capital is higher by 3 pp

*Broadcasting licenses:**
Peretz umbrella license	$	16,065
CTC regional licenses		4,768
Domashny regional licenses		3,613
Peretz regional licenses		4,706
Peretz Network's goodwill:		23,281

Total	$	52,433

The sensitivity analysis assumes a hypothetical change in the cost of capital with all other variables constant, i.e. it does not consider the effect of changes in other key assumptions; in practice, changes in other key assumptions could magnify or counteract the sensitivities.

In addition, the level of advertising revenues that the Company earns is directly tied to its audience shares and ratings. The Peretz Network reporting unit and Peretz broadcasting umbrella license are the most sensitive to changes in the assumptions of the audience share. During 2011, the audience share of Peretz channel was below the forecasted audience share, as a result of increased competition and underperformance of certain programs. If Peretz's audience shares were to decrease further and/or fall behind the currently forecasted growth of audience share as a result, for example, of additional competitive pressures or the underperformance of key programs, this could result in a further decrease in the fair value of the Peretz reporting unit and/or its broadcasting license. In order to evaluate the sensitivity of the fair value calculations on its impairment analysis, the Company applied a hypothetical 10% decrease to the forecasted audience share of the Peretz channel. If the Peretz forecasted audience share were lower by 10%, the Company would have recognized an additional impairment losses in respect of the Peretz Network reporting unit's goodwill and broadcasting umbrella license, respectively, of approximately $21,176 and $11,667. The sensitivity analysis assumes a hypothetical change in audience share forecast, and it does not consider the effect of changes on other key assumptions; in practice, changes in other key assumptions could magnify or counteract the sensitivities. In addition, the sensitivity analysis does not consider any corrective action that the Company may take to mitigate the impact of any adverse changes in the audience share.

Also, the fair value of Production reporting unit is highly sensitive to the volume of programming that the Company produces in-house. Although at December 31, 2011 the Company concluded that, based on management's projections of internally-produced volumes, the fair value of Production reporting unit exceeds its carrying value by more than 15%, significant decline in planned production could result in decreases in the fair value of the Production reporting unit, and the Company may be then required to record impairment of goodwill of this segment.

Although management considered all current information in the impairment reviews, any future changes in events or circumstances, such as adverse changes in the economy and television advertising market (discussed above), the planned transition to digital broadcasting, further decreases in audience shares or ratings, increased competition from cable providers, or changes in the audience measurement system, could result in decreases in the fair value of the Company's intangible assets and goodwill and may require the Company to record additional impairment losses in future periods. If Peretz's audience shares were to decrease further and/or fall behind the currently forecasted growth of audience share as a result, for example, of additional competitive pressures or the underperformance of key programs, this could result in a further decrease in the fair value of the Peretz reporting unit and/or its broadcasting license.

As a result of ongoing strategic review of the positioning of the DTV channel, the Company's management implemented changes to the channel's brand identity. As a result of this rebranding initiative, the Company recorded a trade name impairment loss in respect of the carrying value of the DTV trade name in the amount of $11,136.