3. Acquisitions

On October 3, 2011, we reached a definitive agreement to acquire McGraw-Hill Broadcasting Company, Inc. (“McGraw-Hill”) for $212 million in cash, plus a working capital adjustment estimated at $4.4 million. On December 30, 2011, we closed our acquisition of McGraw-Hill. We financed the transaction pursuant to a credit agreement entered into December 9, 2011. The businesses acquired include four ABC affiliated television stations and five Azteca affiliated stations. Since the closing date was December 30, 2011, revenue and expenses for 2011 are not significant.

Pending the finalization of third-party valuation and other items, the following table summarizes the preliminary fair values of the assets acquired and the liabilities assumed:


(in thousands)	2011

Assets:
Accounts receivable	$	19,485
Other current assets		816
Investments		4,558
Property, plant and equipment		37,837
Intangible assets		130,100
Goodwill		28,591

Total assets acquired		221,387
Current liabilities		5,244

Net purchase price	$	216,143

Of the $130 million allocated to intangible assets, $44 million was for FCC licenses, which we have determined to have an indefinite life and therefore will not be amortized. Of the remaining balance $74 million was allocated to television network affiliation relationships with an estimated amortization period of 20 of 25 years. The remaining balance was allocated to advertiser relationships with an estimated amortization period of 7 to 10 years.

The goodwill of $29 million arising from the transaction consists largely of the synergies and economies of scale expected from the acquisition. We allocated all of the goodwill to our television segment. We will treat the transaction as a purchase of assets for income tax purposes, resulting in a step-up in the assets acquired. The goodwill is deductible for income tax purposes.

Pro forma results of operations, assuming the transaction had taken place at the beginning of 2010 is included in the following table. The pro forma information includes the historical results of operations of Scripps and McGraw-Hill and adjustments for interest expense that would have been incurred to finance the acquisition, additional depreciation and amortization of the assets acquired and excludes the pre-acquisition transaction related expenses incurred by the acquired companies. The pro forma information does not include efficiencies, costs reductions and synergies expected to result from the acquisition. The unaudited pro forma financial information is not necessarily indicative of the results that actually would have occurred had the acquisition been completed at the beginning of the period.


	For the years ended December 31,
(in thousands, except per share data) (unaudited)	2011			2010

Operating revenues	$	822,516		$	873,590
Income (loss) from contributing operations attributable to the shareholders of The E.W. Scripps Company		(24,310	)		22,407

Income (loss) per share from continuing operations attributable to the shareholders of The E.W. Scripps Company:
Basic	$	(0.42	)	$	0.35
Diluted	$	(0.42	)	$	0.35