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AOL Inc. (AOL)
10-K
Annual report pursuant to section 13 and 15(d)
Filed on 03/02/2010
Filed Period 12/31/2009

Table of contents

  • Page 1
    AOL Inc. (AOL) 10-K Annual report pursuant to section 13 and 15(d) Filed on 03/02/2010 Filed Period 12/31/2009

  • Page 2
    ...York, NY (Address of principal executive offices) 10003 (Zip Code) Registrant's telephone number, including area code: 212-652-6400 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, $0.01 par value Name of each exchange on which registered New York Stock...

  • Page 3
    ... Director Independence Principal Accountant Fees and Services 105 105 105 105 105 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations...

  • Page 4
    ... FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page Number Report of Independent Registered Public Accounting Firm Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007 Consolidated Balance Sheets as of December 31, 2009 and 2008 Consolidated Statements of Cash...

  • Page 5
    ... ITEM 1. Introduction We are a leading global web services company with an extensive suite of brands and offerings and a substantial worldwide audience. Our business spans online content, products and services that we offer to consumers, publishers and advertisers. We are focused on attracting and...

  • Page 6
    ..., our common stock began trading "regular way" on the New York Stock Exchange under the symbol "AOL". Our Relationship with Time Warner Following the spin-off, our company and Time Warner operate independently, and neither has any ownership interest in the other. In order to govern certain of the...

  • Page 7
    ... and cash flows. Prior to the spin-off, Time Warner had been evaluating potential transactions involving, and structural alternatives for, AOL, including the possibility of separating the global web services and subscription access services businesses, which share infrastructure such as data centers...

  • Page 8
    ...engaging online content by utilizing open and highly scalable publishing platforms and content management systems, as well as a leading online provider of consumer products and services. AOL Properties include our owned and operated content, products and services in the Content, Local, Paid Services...

  • Page 9
    ... writers and photographers to submit original content for our professional editors to review and possibly publish on AOL Properties or on third party sites. Additionally, our acquisition of StudioNow, Inc. in the first quarter of 2010 provides us with a video content management system and network...

  • Page 10
    ...'s host site and thumbnail-sized images to help consumers refine their search queries for relevant videos. The Relegence news search service acquires information on a real-time basis from public and private information sources, including news wires, websites, regulatory feeds and corporate sources...

  • Page 11
    ...content, products and services that are available to all online consumers, an AOL-brand access subscription provides members with dial-up access to the Internet and, depending on the applicable price plan, various degrees of enhanced safety and security features, technical support and other benefits...

  • Page 12
    ... web search provider for AOL Properties. In connection with these search services, Google provides us with a share of the revenue generated through paid text-based search advertising and contextual advertising on AOL Properties. For the year ended December 31, 2009, advertising revenues associated...

  • Page 13
    ... subscription access service will help us to pursue our strategic initiatives. Third Party Network We also generate advertising revenues through the sale of advertising on the Third Party Network. In order to effectively connect advertisers with online advertising inventory, we purchase advertising...

  • Page 14
    ... to support our products and services, we have been steadily increasing our use of open source technologies and platforms with a view to diversifying our sources of technology, as well as for cost management. Research and development costs related to our software development efforts for 2009, 2008...

  • Page 15
    ... directly to advertisers on AOL Properties, provides us with advertising credits for promotion of AOL Properties on Google's network, provides other promotional opportunities for our content and collaborates with us on a number of other areas. On July 8, 2009, Time Warner completed the purchase...

  • Page 16
    ... and content delivery. In the Third Party Network, cookies or similar technologies help present, target and measure the effectiveness of advertisements. More sophisticated targeting and measurement facilitate enhanced revenue opportunities. The regulation of these "cookies" and other current online...

  • Page 17
    ... currently consulting with employees or employee representatives in accordance with applicable legal requirements. For geographic area data for the years ended December 31, 2009, 2008 and 2007, see "Note 1: Description of Business, Basis of Presentation and Summary of Significant Accounting Policies...

  • Page 18
    ... Street, New York, New York 10005. We also maintain an Internet website at www.corp.aol.com. We use our website as a channel of distribution of material company information. Financial and other information regarding AOL is routinely posted on and accessible at http://www.corp.aol.com. In addition...

  • Page 19
    ... Advertising and Commerce and then in 2007 he was named President, Americas Operations and SVP. Before joining Google, Mr. Armstrong served as Vice President of Sales and Strategic Partnerships for Snowball.com from 1998 to 2000. Prior to that, he served as Director of Integrated Sales and Marketing...

  • Page 20
    ... develop and offer compelling content, products and services, we may not be able to attract new consumers and maintain or increase our existing consumers' engagement. In general, subscribers to our subscription access service are among the most engaged consumers on AOL Properties, including search...

  • Page 21
    ... costs associated with research and product development. The competition faced by our subscription access service, especially from broadband Internet access providers, could cause the number of our subscribers to decline at a faster rate than experienced in the past. Dial-up Internet access services...

  • Page 22
    ...own or control a general text-based web search service. Instead, Google is, except in certain limited circumstances, the exclusive web search provider for AOL Properties. In 2009, search advertising revenues comprised approximately one-third of our total advertising revenues. Changes that Google has...

  • Page 23
    ...cannot effectively make our content, products and services available on these devices, fewer consumers may access and use our content, products and services. In addition, we must develop and offer effective advertising solutions on these devices in order to generate advertising revenues from the use...

  • Page 24
    ... offerings and services to advertisers and publishers, including moving to completely new technology architectures and systems. Such changes may be challenging to implement and manage, may take time to test and deploy, may cause us to incur substantial costs and may cause us to suffer data loss or...

  • Page 25
    ... offerings or develop new advertising offerings or technologies to keep pace with market trends, including new technologies that more effectively or efficiently plan, price or target advertising, our advertising revenues could be adversely affected. Our access service subscriber base could...

  • Page 26
    ... or misuse of AOL data or consumer or other data could adversely affect our business. Our business utilizes significant amounts of data about our business, consumers and our advertising and publishing partners in order to deliver our content, products and services and our advertising solutions. The...

  • Page 27
    ..., use, disclosure and interception and privacy protections of electronic communications. In addition, many states have enacted legislation governing the breach of data security in which sensitive consumer information is released or accessed. If we fail to comply with these applicable laws or...

  • Page 28
    ... Third Party Network, cookies or similar technologies help present, target and measure the effectiveness of advertisements. The regulation of these "cookies" and other current online advertising practices could adversely affect our business. Changes to products, technology and services made by third...

  • Page 29
    ...and the current global economic recession; currency exchange rate fluctuations; the requirements of local laws and customs relating to the publication and distribution of content and the display and sale of advertising; uncertain protection and enforcement of our intellectual property rights; import...

  • Page 30
    ... Time Warner. As an independent, publicly-traded company, we believe that our business benefits from, among other things, allowing us to better focus our financial and operational resources on our specific business, allowing our management to design and implement corporate strategies and policies...

  • Page 31
    ... business. See "Note 13: Related Party Transactions" in our accompanying consolidated financial statements for further information on the ongoing relationship with Time Warner. Risks Relating to our Common Stock and the Securities Market Our stock price may fluctuate significantly. Our stock price...

  • Page 32
    ... acquisitions or dispositions; changes in accounting standards, policies, guidance, interpretations or principles; changes in earnings estimates by securities analysts or our ability to meet those estimates; the operating and stock price performance of other comparable companies; overall market...

  • Page 33
    ... needs. We also have an ongoing process to continually review and update our real estate portfolio to meet changing business needs. ITEM 3. LEGAL PROCEEDINGS On May 24, 1999, two former AOL Community Leader volunteers brought a putative class action, Hallissey et al. v. America Online, Inc., in the...

  • Page 34
    ..., AOL Community Leader volunteers filed a class action lawsuit in the U.S. District Court for the Southern District of New York, Hallissey et al. v. AOL Time Warner, Inc., et al., against AOL LLC alleging ERISA violations and an entitlement to pension, welfare and/or other employee benefits subject...

  • Page 35
    ... of Luxembourg, received four assessments from the French tax authority for French value added tax related to AOL Luxembourg's subscription revenues from French subscribers earned during the period from July 1, 2003 through October 31, 2006. During October 2009, the Company entered into a settlement...

  • Page 36
    Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES AOL Inc.'s common stock is listed on the New York Stock Exchange under the symbol "AOL." The following table presents the high and low sales prices for the...

  • Page 37
    ... Stanley High-Technology index. This graph covers the period from November 24, 2009 (the first day our common stock began "when-issued" trading on the NYSE) through December 31, 2009. * $100 invested on 11/24/09 in stock or index, including reinvestment of dividends. Fiscal year ending December...

  • Page 38
    ... Results of Operations," included elsewhere in this Annual Report. Prior to December 9, 2009, the effective date of the spin-off, we were a subsidiary of Time Warner. The financial information included herein may not necessarily reflect our financial position, results of operations and cash flows in...

  • Page 39
    ... 2009, the Company converted from AOL Holdings LLC, a limited liability company wholly owned by Time Warner, to AOL Inc., a corporation wholly owned by Time Warner. On December 9, 2009, the date of our spin-off, 105.8 million shares of $0.01 par value AOL common stock were distributed to Time Warner...

  • Page 40
    ...the open market, with the net proceeds distributed pro rata in the form of cash payments to Time Warner shareholders who would otherwise be entitled to receive a fractional share of AOL common stock. On December 10, 2009, AOL began trading on the NYSE as an independent, public company. In connection...

  • Page 41
    ...a limited liability company to a corporation. See "Item 1A-Business-The Spin-Off" for additional information. Prior to the spin-off, we were a subsidiary of Time Warner. The financial information included herein may not necessarily reflect our financial position, results of operations and cash flows...

  • Page 42
    ...in certain limited circumstances, the exclusive web search provider for AOL Properties. In connection with these search services, Google provides us with a share of the revenue generated through paid text-based search and contextual advertising on AOL Properties. For the year ended December 31, 2009...

  • Page 43
    ... to develop a single, open, consumerfacing platform that will allow us to manage and distribute these additional subscription products as well as our subscription access service. We plan to offer those subscriptions to our access subscribers and to other Internet consumers. For the years ended...

  • Page 44
    ... years, there has been a significant shift in the method of Internet access away from dial-up access. This is due to a number of factors, including the increased availability of high-speed broadband Internet connections and the fact that a significant amount of online content, products and services...

  • Page 45
    ... close date. It is anticipated that a significant portion of the purchase price will be allocated to intangible assets and goodwill. See "Note 4-Business, Acquisitions, Dispositions and Other Significant Transactions" in our accompanying consolidated financial statements for additional information...

  • Page 46
    ... Time Warner until the separation (see "The Spin-Off" for further details). ACQUISITION OF PATCH MEDIA CORPORATION On June 10, 2009, we purchased Patch Media Corporation ("Patch"), a news, information and community platform business dedicated to providing comprehensive local information and services...

  • Page 47
    ... with the accompanying consolidated statements of operations: Years Ended December 31, 2009 2008 2007 Costs and expenses: Costs of revenues Selling, general and administrative Amortization of intangible assets Amounts related to securities litigation and government investigations, net of recoveries...

  • Page 48
    ...-based contracts. Advertising revenues on AOL Properties and the Third Party Network for the years ended December 31, 2009, 2008 and 2007 are as follows (in millions): Years Ended December 31, % Change from 2008 to 2009 % Change from 2007 to 2008 2009 2008 2007 AOL Properties: Display Search and...

  • Page 49
    ...whereby Google provides paid text-based search and contextual advertising on AOL Properties. For all of the periods presented in this Annual Report, revenues under the Google arrangement represented a significant percentage of the advertising revenues generated by AOL Properties. For the years ended...

  • Page 50
    ...our subscription access service contribute to our ability to generate advertising revenues. As previously discussed, the continued decline in domestic AOL-brand access subscribers is the result of several factors, including the increased availability of high-speed broadband Internet connections, the...

  • Page 51
    ...year ended December 31, 2009, the largest component of costs of revenues was TAC. TAC consists of costs incurred through arrangements in which we acquire third-party online advertising inventory for resale and arrangements whereby partners distribute our free products or services or otherwise direct...

  • Page 52
    ... declines in depreciation of capitalized software associated with our subscription access service. We also had declines in customer billing and collection costs of $27.6 million for the year ended December 31, 2009 due to the decline in domestic AOL-brand access subscribers. Partially offsetting the...

  • Page 53
    ... ended December 31, 2009 related to the resolution of a French value-added tax matter associated with our historical European access service businesses and an increase in personnel related costs of $15.4 million for the year ended December 31, 2009, resulting from the decision not to pay most annual...

  • Page 54
    ... of expense related to these matters for the years ended December 31, 2009, 2008 and 2007, respectively. Following the spin-off, these costs continue to be incurred by Time Warner to the extent that proceeds from a settlement with insurers are available to pay those costs, and thereafter AOL has an...

  • Page 55
    ... financial statements for more information. Gain on Disposal of Assets and Consolidated Businesses, Net The gain on disposal of assets and consolidated businesses for the year ended December 31, 2007 consisted primarily of the $668.2 million gain on the sale of our German access service business...

  • Page 56
    ...of our strategy, proceeds received from the sale of assets or operating subsidiaries and cash used for capital expenditures. Cash flows from financing activities relate primarily to our distributions of cash to Time Warner as part of our historical cash management and treasury operations, as well as...

  • Page 57
    ... gain on the sale of our German access service business in 2007 (which is related to an investing cash flow), and excluding the $150.6 million increase in operating income related to securities litigation and government investigations (which were non-cash to us as Time Warner paid these amounts...

  • Page 58
    ...): Years Ended December 31, 2009 2008 2007 Investments and acquisitions, net of cash acquired: Bebo buy.at Quigo TACODA ADTECH AG Third Screen Media All other Capital expenditures and product development costs Proceeds from disposal of assets and consolidated businesses, net: German access service...

  • Page 59
    ... of Contents Cash used by financing activities was $749.6 million for the year ended December 31, 2009, compared to $134.9 million of cash provided by financing activities in the year ended December 31, 2008. This change was due to the $709.3 million of net cash distributed to Time Warner in 2009...

  • Page 60
    ... include customers, vendors, lessors, purchasers of assets or operating subsidiaries and other parties related to certain matters, including losses arising out of our breach of agreements or representations and warranties made by us, services to be provided by us, intellectual property infringement...

  • Page 61
    ... for financial loss if a customer is unwilling or unable to meet its agreed-upon contractual payment obligations. Credit risk originates from sales of advertising and subscription access service and is dispersed among many different counterparties. We had gross accounts receivable of approximately...

  • Page 62
    ... on a gross basis. During 2009, we earned and reported gross advertising revenues of $534.6 million and incurred costs of revenues of $389.8 million related to providing advertising services on the Third Party Network. Impairment of Goodwill Goodwill is tested annually for impairment during the...

  • Page 63
    ... GAAP and tax reporting. Deferred income taxes reflect the tax effect of net operating loss, capital loss and general business credit carryforwards and the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement and income tax purposes...

  • Page 64
    ... of Contents From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty. Examples of such transactions include business acquisitions and dispositions, including dispositions designed to be tax-free, issues related to consideration paid or received and...

  • Page 65
    Table of Contents ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 61

  • Page 66
    ... of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders of AOL Inc. We have audited the accompanying consolidated balance sheets of AOL Inc. as of December 31, 2009 and 2008, and the related consolidated statements of operations, equity and cash...

  • Page 67
    ... millions, except per share amounts) Years ended December 31, 2009 2008 2007 Revenues Advertising Subscription Other Total revenues Costs of revenues Selling, general and administrative Amortization of intangible assets Amounts related to securities litigation and government investigations, net of...

  • Page 68
    Table of Contents AOL Inc. Consolidated Balance Sheets (In millions, except per share amounts) December 31, 2009 2008 Assets Current assets: Cash and equivalents Accounts receivable, net of allowances of $31.7 and $39.8, respectively Receivables from Time Warner Inc. ("Time Warner") Prepaid ...

  • Page 69
    ... related to securities litigation and government investigations, net of recoveries Other non-cash adjustments Deferred income taxes Changes in operating assets and liabilities, net of acquisitions: Receivables Accrued expenses Deferred revenue Other balance sheet changes (a) Adjustments relating...

  • Page 70
    .... These amounts were retained by Time Warner following the spin-off. (b) Upon the effective date of the spin-off, AOL's divisional equity was reclassified and allocated between common stock and additional paid-in capital based on the number of shares of AOL common stock issued and outstanding. See...

  • Page 71
    ... of cash payments to Time Warner shareholders who would otherwise be entitled to receive a fractional share of AOL common stock. On December 10, 2009, AOL began trading on the New York Stock Exchange as an independent, public company. Prior to the spin-off, AOL reorganized its corporate structure...

  • Page 72
    ...-traded company or of the costs expected to be incurred in the future. These allocated expenses relate to various services that were provided to AOL by Time Warner, including cash management and other treasury services, administrative services (such as government relations, tax, employee benefit...

  • Page 73
    ... company's advertisement or other user actions such as product/customer registrations, survey participation, sales leads or product purchases. In addition to advertising revenues generated on AOL Properties, the Company also generates revenue from its advertising offerings on its Third Party Network...

  • Page 74
    ... online advertising inventory from publishers for resale to advertisers and arrangements whereby partners distribute AOL's free products or services or otherwise direct traffic to AOL Properties. AOL considers these costs to be traffic acquisition costs or "TAC." TAC arrangements have a number...

  • Page 75
    ...statement of operations on a straight-line basis over the period during which an employee is required to provide service in exchange for the award. This accounting guidance also requires that excess tax benefits, as defined, realized from the exercise of stock options be reported as a financing cash...

  • Page 76
    ... in costs of revenues in the consolidated statement of operations. The impairment charge recorded in 2009 related primarily to an intangible asset write-off in connection with the Company's anticipated disposition of Yedda, Inc., as well as the write-off of certain trade name intangible assets that...

  • Page 77
    ... that management believes are creditworthy. The Company's exposure to customer credit risk relates primarily to advertising customers and individual subscribers to AOL's subscription access service, and is dispersed among many different counterparties, with no single customer having a receivable...

  • Page 78
    ... months. Cash equivalents are carried at cost, which approximates fair value. Allowance for Doubtful Accounts AOL's receivables consist primarily of two components, receivables from individual subscribers to AOL's subscription access service and receivables from advertising customers. Management...

  • Page 79
    ... long-term assets in the consolidated balance sheet. Amortization of capitalized software costs related to the Company's subscription access service was $8.0 million, $22.4 million and $62.2 million for the years ended December 31, 2009, 2008 and 2007, respectively. Research and Development Research...

  • Page 80
    ... Contents Advertising Costs The Company expenses advertising costs as they are incurred. Advertising expense to third parties was $59.3 million, $117.0 million and $301.1 million for the years ended December 31, 2009, 2008 and 2007, respectively. Loss Contingencies In the normal course of business...

  • Page 81
    ... asset be recorded at the lower of historical cost or fair value. Business Combinations On January 1, 2009, the Company adopted the guidance related to the accounting for business combinations, and is applying such provisions prospectively to business combinations that have an acquisition date...

  • Page 82
    ... 2009, the Company converted from AOL Holdings LLC, a limited liability company wholly owned by Time Warner, to AOL Inc., a corporation wholly owned by Time Warner. On the distribution date of December 9, 2009, 105.8 million shares of $0.01 par value AOL common stock were distributed to Time Warner...

  • Page 83
    ... the estimated fair value of its reporting unit, the Company used a combination of an income approach by preparing a discounted cash flow analysis and a market-based approach based on AOL's market capitalization. Given that AOL's common stock started trading on December 10, 2009, there was...

  • Page 84
    ...("Bebo"), a global social media network, for $859.8 million, net of cash acquired, of which $852.0 million was paid in cash in May 2008, and $7.8 million of which was paid by the Company in the first quarter of 2009. AOL recognized $765.8 million of goodwill (which is not deductible for tax purposes...

  • Page 85
    ...Screen Media LLC), a mobile advertising company and mobile ad serving management platform provider, for $105.4 million in cash, net of cash acquired. AOL recognized $76.2 million of goodwill (which is not deductible for tax purposes) and $29.0 million of intangible assets related to this acquisition...

  • Page 86
    Table of Contents provide advertising services to customers, which, along with market conditions at the time of acquisition, contributed to purchase prices that resulted in the allocation of a significant portion of the purchase price to goodwill. The intangible assets consist primarily of acquired...

  • Page 87
    ... of Time Warner. Google continues to provide paid text-based search advertising and contextual advertising on AOL Properties. Acquisition of StudioNow, Inc. On January 22, 2010, the Company completed the acquisition of StudioNow, Inc. ("StudioNow"), a provider of a proprietary digital platform that...

  • Page 88
    ...the Revolving Credit Facility, pursuant to a Guarantee, dated as of December 9, 2009, in favor of the Administrative Agent (the "Time Warner Guarantee"). As consideration for Time Warner providing such guarantee, the Company will pay Time Warner an annual fee (payable quarterly) equal to 1.0% of the...

  • Page 89
    ... rate on capital lease obligations due within one year was 5.66% at December 31, 2009. NOTE 6-INCOME TAXES AOL was included in Time Warner's consolidated U.S. federal income tax return filings for each of the years presented through December 9, 2009, the date of the spin-off. AOL will file its own...

  • Page 90
    ... date of the spin-off, the Company reversed its equity-based compensation deferred tax asset totaling $436.1 million with a corresponding decrease to additional paid-in capital, as this amount was retained by Time Warner under the terms of the Second Tax Matters Agreement between Time Warner and AOL...

  • Page 91
    ... at various dates between 2010 and 2029. The increase in state net operating losses from 2008 to 2009 is primarily attributable to Time Warner's allocation of consolidated Virginia net operating losses to AOL in connection with the spin-off. U.S. federal income taxes are provided on that portion...

  • Page 92
    ... Accounting Policies" on December 9, 2009, in accordance with the Separation Agreement, Time Warner shareholders of record as of 5 p.m. on November 27, 2009, the record date for the distribution, received one share of AOL common stock for every eleven shares of Time Warner common stock held...

  • Page 93
    ...the Company's 2010 Stock Incentive Plan, or "2010 SIP", options are generally granted to employees and non-employee directors of AOL with exercise prices equal to the quoted fair market value of the common stock at the date of grant. Generally, the stock options vest ratably over a four year vesting...

  • Page 94
    ... of AOL employees that held similar options to acquire Time Warner common stock. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. As the Company does not currently intend to pay dividends...

  • Page 95
    ...year ended December 31, 2009 was $9.94. No stock options were exercised during the year ended December 31, 2009. AOL Restricted Stock Units The following table summarizes information about unvested AOL RSUs at December 31, 2009: Number of Shares/Units (millions) WeightedAverage Grant Date Fair Value...

  • Page 96
    .... The total intrinsic value of Time Warner options exercised by AOL employees was $3.3 million, $38.6 million and $141.8 million for the years ended December 31, 2009, 2008 and 2007, respectively. Time Warner received cash from the exercise of Time Warner stock options by AOL employees totaling $13...

  • Page 97
    Table of Contents A summary of AOL's restructuring activity for the years ended December 31, 2009, 2008 and 2007 is as follows (in millions): Employee Terminations Other Exit Costs Total Liability at December 31, 2006 Net accruals (including adjustments to previous estimates) Cash paid Liability ...

  • Page 98
    ... were not material to AOL. Time Warner managed the foreign currency transactions directly and entered into foreign currency purchase and sale transactions directly with counterparties and allocated costs to AOL related to these transactions. For the years ended December 31, 2009, 2008 and 2007...

  • Page 99
    ... insurers are available to pay those costs, and thereafter AOL has an obligation to indemnify Time Warner for such costs to the extent they are associated with present or former officers and employees of AOL. As of December 31, 2009, the Company did not have any liability recorded related to these...

  • Page 100
    ... 6, 2009, AOL Europe Services S.Ã r.l. ("AOL Luxembourg"), a wholly-owned subsidiary of AOL organized under the laws of Luxembourg, received four assessments from the French tax authorities for French value added tax ("VAT") related to AOL Luxembourg's subscription revenues from French subscribers...

  • Page 101
    ... liabilities Taxes Costs of revenues (excluding TAC) Network and related costs Advertising and marketing Rent and facilities expense Member support services Other accrued expenses Total accrued expenses and other liabilities NOTE 13-RELATED PARTY TRANSACTIONS Acquisition of Patch Media Corporation...

  • Page 102
    ... that receiving these services from Time Warner created cost efficiencies. These services and transactions included the following cash management and other treasury services; administrative services such as government relations, tax, employee benefit administration, internal audit, accounting and...

  • Page 103
    ... in Time Warner's equity-based compensation plans, prior to the date of spin-off AOL was obligated to make cash payments to Time Warner for the intrinsic value of Time Warner RSUs and PSUs held by AOL employees upon vesting and for the intrinsic value of stock options held by AOL employees upon...

  • Page 104
    ... Time Warner stock options and a portion of the intrinsic value of unvested RSUs and PSUs held by AOL employees. As of December 31, 2008, the liability related to vested unexercised stock options, unvested RSUs and PSUs was $11.6 million. For the years ended December 31, 2009, 2008 and 2007, AOL...

  • Page 105
    ... that the Company has one segment. NOTE 15-SELECTED QUARTERLY FINANCIAL DATA (Unaudited) Quarter Ended March 31, June 30, September 30, December 31, (in millions, except per share amounts) 2009 Revenues Advertising Subscription Other Total revenues Costs of revenues (a) Operating income (loss...

  • Page 106
    Table of Contents AOL Inc. SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 2007, 2008 and 2009 (In millions) Balance at Beginning of Year Additions Charged to Costs and Expenses Allowance for Doubtful Accounts Deductions Balance at End of Year 2007 2008 2009 $ $ $ 44.3 ...

  • Page 107
    ... the Board of Directors, management and other personnel to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial...

  • Page 108
    ... of AOL; (2) approved the AOL Inc. 2010 Stock Incentive Plan; and (3) approved the AOL Inc. Annual Incentive Plan for Executive Officers. The Amended and Restated Certificate of Incorporation of AOL was filed and effective on December 9, 2009. On December 8, 2009, the sole stockholder of AOL, by...

  • Page 109
    ... to our Proxy Statement to be filed in connection with the 2010 Annual Meeting of Stockholders. We have adopted a Code of Ethics for Our Senior Executive and Senior Financial Officers. A copy of the Code is publicly available on our website at http://corp.aol.com/corporate-policy. Amendments to the...

  • Page 110
    ... to Consolidated Financial Statements and Supplementary Data, filed as part of this Annual Report on Form 10-K. (a)(3) Exhibits See Item 15(b) below. (b) Exhibits The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure...

  • Page 111
    ...15(d) the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 2, 2010. AOL INC. By Name: Title: /s/ ARTHUR MINSON Arthur Minson Executive Vice President and Chief Financial Officer POWER OF...

  • Page 112
    Table of Contents Signature Title Date /s/ /s/ /s/ /s/ MICHAEL K. POWELL Michael K. Powell FREDRIC G. REYNOLDS Fredric G. Reynolds JAMES R. STENGEL James R. Stengel JAMES A. WIATT James A. Wiatt Director Director Director Director March 2, 2010 March 2, 2010 March 2, 2010 March 2, 2010 108

  • Page 113
    ...among AOL Inc., AOL LLC and Time Warner Inc., dated December 4, 2009. Employee Matters Assignment and Assumption Agreement by and among AOL Inc., AOL LLC and Time Warner Inc., dated December 3, 2009. Master Services Agreement for ATDN and Hosting Services between AOL Inc. and Time Warner Inc., dated...

  • Page 114
    Table of Contents Exhibit Number Description 10.13 10.14 10.15 10.16 10.17 10.18* 10.19* 10.20* 10.21* 10.22* 10.23* 10.24* 10.25* 10.26* 10.27* 10.28* Search Services Agreement between AOL LLC and Time Inc., dated August 23, 2007 (the "SSA") (incorporated herein by reference to Exhibit...

  • Page 115
    ...'s Current Report on Form 8-K dated December 22, 2009). AOL Inc. 2010 Stock Incentive Plan, adopted by the Registrant on November 20, 2009 (incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated November 23, 2009). AOL Inc. Annual Incentive Plan for...

  • Page 116
    ... 10.60 10.61 10.62 AOL LLC 2009 Global Bonus Plan (incorporated herein by reference to Exhibit 10.20 to Amendment No. 1 to Form 10 dated September 16, 2009). Amended and Restated Interactive Marketing Agreement between AOL LLC and Google Inc., dated October 1, 2003 (the "IMA") (incorporated herein...

  • Page 117
    ...to the IMA, dated December 4 2009.**** Consent Letter related to the IMA, dated August 19, 2008 (incorporated herein by reference to Exhibit 10.46 to the Registrant's Amendment No. 3 to Form 10 dated November 6, 2009).** Network Services Agreement between AOL LLC and MCI Communications Services, Inc...

  • Page 118
    ... dated October 26, 2009). Side Letter Agreement related to the Patch Merger Agreement, dated August 11, 2009 (incorporated herein by reference to Exhibit 10.70 to the Registrant's Amendment No. 2 to Form 10 dated October 26, 2009). Credit Support Agreement between AOL Inc. and Time Warner Inc. dated...

  • Page 119
    ...2002, with respect to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2009.†Management contract or compensatory plan or arrangement. Exhibit omits certain information that has been filed separately with the Securities and Exchange Commission and has been granted...

  • Page 120
    ... COPY ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), dated as of December 4, 2009 (the "Asset Distribution Date"), by and among TIME WARNER INC., a Delaware corporation ("TWX"), AOL INC., a Delaware corporation ("AOL") and AOL LLC, a Delaware limited liability company ("AOL LLC"). RECITALS...

  • Page 121
    ...Assignment and Assumption Agreement shall exclusively govern the assignment and assumption of all AOL LLC employment-related assets and liabilities. 7. Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of...

  • Page 122
    ... written above. TIME WARNER INC., by /s/ John K. Martin, Jr. Name: Title: AOL INC., by /s/ Ira H. Parker Name: Title: AOL LLC, by /s/ Ira H. Parker Name: Title: John K. Martin, Jr. Executive Vice President and Chief Financial Officer Ira H. Parker Executive Vice President, Corporate Secretary and...

  • Page 123
    ... EMPLOYEE MATTERS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement"), dated as of December 3, 2009 (the "Employee Asset Distribution Date"), by and among TIME WARNER INC., a Delaware corporation ("TWX"), AOL INC., a Delaware corporation ("AOL"), and AOL LLC, a Delaware limited liability company ("AOL...

  • Page 124
    ... of the Separation and Distribution Agreement, Employee Matters Agreement or other Ancillary Agreement, as applicable, shall govern. 6. Governing Law; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, regardless of the laws that...

  • Page 125
    11. Amendments. No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any party hereto, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of each party. Any waiver of any term or condition shall ...

  • Page 126
    IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. TIME WARNER INC., by /s/ John K. Martin, Jr. Name: Title: AOL INC., by /s/ Ira H. Parker Name: Title: Ira H. Parker Executive Vice President, Corporate Secretary and General Counsel John K. Martin, Jr. ...

  • Page 127
    ..., New York, NY 10003 ("AOL"), and Time Inc. ("TI"), a Delaware corporation with offices at 1271 Avenue of the Americas, New York, New York 10020, effective as of December 17, 2009 (the "Second Amendment Effective Date"). INTRODUCTION The Parties hereto wish to amend the Search Services Agreement...

  • Page 128
    ... maintaining the transmission of the Brand Website information to the Internet (collectively, "Hosting and Streaming"). Beginning on the Spin Date, instead of the foregoing, AOL shall provide Hosting and Streaming to the Brand Website in accordance with the terms of the Master Services Agreement 2.

  • Page 129
    between AOL and Time Warner Inc., dated November 16, 2009 (the "Hosting Agreement"). - - • d. Hosting and Streaming provided by AOL will be maintained at the same level and quality as the Hosting and Streaming services provided by AOL to the Branded Website as of the Spin Date. TP will pay AOL for...

  • Page 130
    ... Advertising Revenues" means gross advertising (including but not limited to display, video, text, and search advertising) revenues actually received from advertisements placed on the Brand Website and the TMZ Mobile Site (collectively, the "AOL Ad Revenue Share"). The AOL Ad Revenue Share shall...

  • Page 131
    ... by adding the following to the end of the bullet: JV Property. • "JV Property" shall also include the Brand, the name "TMZ", the domain name www.tmz.com, the Brand Website, Additional Brand Services (including the TMZ television show and TMZ wireless services), the Service, JV Produced Content...

  • Page 132
    ... TP acknowledges that timing of such arrangements is not completely in AOL's control and is subject to ComScore's approval and implementation. Miscellaneous. 4.1 Governing Law. The MOU and this Amendment shall be interpreted and construed in accordance with the laws of the State of New York, without...

  • Page 133
    ...supersedes all prior and/or contemporaneous agreements and understandings, written or oral between the Parties with respect to the subject matter hereof. 4.3 Press Releases and Public Statements. No Party will issue any press releases or make public statements relating to the MOU, this Amendment, or...

  • Page 134
    ... has been duly executed by the Parties hereto effective as of the date first set above. TELEPICTURES PRODUCTIONS INC. /s/ David Decker By: David Decker Name: EVP Business & Legal Affairs Title: 12/8/09 Date: 7 AOL LLC By: Name: Title: Date: /s/ Bill Wilson Bill Wilson President, AOL Media 12.08.09

  • Page 135
    ... the landing page linked to on the Brand Website from an AOL promotion provided hereunder, for the duration of such promotion, does not promote or market the following direct competitors of AOL: Google, Yahoo! or MSN (and any other Microsoft web properties). In addition, TP shall in good faith avoid...

  • Page 136
    ... third party claims, actions, costs and/or damages arising from or relating to the Licensed Content and AOL use of the Licensed Content in accordance with this MOU. As used herein, "Licensed Content" shall mean any Content on the Brand Website that is displayed on the AOL Network at the request of...

  • Page 137
    ...President, Platforms, reporting to the Chief Operating Officer or his or her functional equivalent. This letter sets forth the economics and key employment conditions in your new position. Location: Your primary work location will be Dulles, Virginia, but you shall make yourself available for travel...

  • Page 138
    ... Board of Director approval and administrative processing. The exercise price for your Stock Option grant will be the Fair Market Value on your grant date which is determined by the average of the high and low sales prices of Time Warner common stock on the NYSE on that day. (Note that AOL and Time...

  • Page 139
    ... to your manager all the Company property in your possession, including, but not limited to, keys, access cards, computers, pagers, telephones and the original and all copies of any written, recorded, or computer readable information about Company practices, procedures, trade secrets, customer lists...

  • Page 140
    ...investigation involving the Company. Orientation: Each Monday AOL holds an Orientation session for new employees. This event is intended to give you an introduction to the company, its online services and employee benefits. On your first day, please report to the Dulles Headquarters building at 8:15...

  • Page 141
    ...the Company will prove to be exciting and beneficial for both you and us and we look forward to having you aboard. If you have any questions, please do not hesitate to contact me. Sincerely, Glenn M. Fox VP Executive Recruitment & Talent Acquisition AOL LLC ACCEPTED: /s/ Theodore R. Cahall, Jr. DATE...

  • Page 142
    ... 15, a Bonus payment for the calendar year ending prior to your termination ("Prior Year"), payable at the same rate that continuing employees receive their Bonus payment, less applicable taxes, but in no event to exceed 100% of your target payout; provided that (i) the Company pays a Bonus to •

  • Page 143
    ... or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to you) until the date that is six months following your...

  • Page 144
    ... of the provisions of this section; provided that neither the Company nor any of its employees or representatives shall have any liability to you with respect thereto. All other terms and conditions of your offer letter remain in full force and effect. Please sign and date one copy of this memo and...

  • Page 145
    ...the close of business on October 1, 2009 (your "Separation Date"). During the period from September 16, 2009 through your Separation Date, you acknowledge that you did not have day-to-day responsibilities and were not expected to work from the office; however, you provided transition services to AOL...

  • Page 146
    ...terms and provisions of the equity plans and agreements under which any grants of stock options or awards of restricted stock units were granted, based on an October 1, 2009 Separation Date. If you accept other employment with AOL or with any Time Warner company within thirty days of your Separation...

  • Page 147
    ... in the United States or any country in which the Company is now operating, directly or indirectly participate in the ownership, control or management of, or be employed by, Yahoo!, Inc., Google Inc., Microsoft Corporation, IAC/InterActive Corp., News Corp., Viacom Inc. or Disney, or any of their...

  • Page 148
    ... and parent entities, and their respective officers, directors, stockholders, employees, benefit plan administrators and trustees, agents, attorneys, insurers, representatives, affiliates, successors and assigns, from any and all claims, actions, causes of action, demands, obligations or damages of...

  • Page 149
    ... Agreement. Notwithstanding the foregoing, in the event any of the Company's successors, subsidiaries, affiliates, related entities, predecessors, merged entities and parent entities, or their respective officers, directors, stockholders, employees, benefit plan administrators and trustees, agents...

  • Page 150
    ...to your immediate family or for purposes of securing professional financial, tax or legal services, and for the Company on a strictly need to know basis, provided further that, prior to making any such disclosure, the parties will inform any such persons that this confidentiality clause is in effect...

  • Page 151
    ... contemplated hereby. To accept the Separation Agreement, you must sign below on or after your Separation Date and return one entire copy to AOL LLC, Attn: Michaela Oliver, 22110 Pacific Blvd., Dulles, VA 20166. (An extra copy for your files is enclosed.) Sincerely, /s/ David Harmon David...

  • Page 152
    ... I have had the opportunity to review this Separation Agreement carefully with legal or other personal advisors of my own choice; I understand that by signing this Separation Agreement I am releasing the Company of all claims against it; I have read this Separation Agreement and understand its terms...

  • Page 153
    ... meeting the following conditions: a. Employment. You must be a full-time, active employee of the Company throughout the entire Bonus Period, subject to the following conditions: (i) Prior to the end of the Bonus Period, if AOL terminates your employment without cause, as defined below, in exchange...

  • Page 154
    ...Program, an "AOL Change in Control Transaction" means a transaction that results in (i) a transfer by the Company or any Affiliate of the Company of your employment to a corporation, company or other entity whose financial results are not consolidated with those of the Company or Time Warner, or (ii...

  • Page 155
    ..."CNPR Agreement") which is incorporated herein by reference. In addition, you agree not to make any disparaging or untruthful remarks or statements about the Company, its officers, directors, employees or agents, and to comply with the Standards of Business Conduct and all other relevant policies of...

  • Page 156
    ... formerly an officer and employee of AOL, LLC ("AOL LLC"), a Delaware limited liability company and subsidiary of Time Warner Inc., a Delaware corporation ("TWX"), was granted a non-qualified stock option to purchase shares of TWX common stock on April 15, 2009 pursuant to a stock incentive plan of...

  • Page 157
    ... such term in the Company's long-term disability plan or policy, as in effect from time to time. (c) "Employment Agreement" means the employment agreement originally made March 12, 2009 among AOL LLC, Time Warner Inc. and the Participant, as amended. (d) "Expiration Date" means the date set forth on...

  • Page 158
    purchase price of the Shares subject to the Option (the "Option Price") shall be as set forth on the Notice. The Option is intended to be a non-qualified stock option, and as such is not intended to be treated as an option that complies with Section 422 of the Internal Revenue Code of 1986, as ...

  • Page 159
    ...is not a trading day on the New York Stock Exchange (the "NYSE") or, if the Company's Shares are not then listed on the NYSE, such other stock exchange or trading system that is the primary exchange on which the Company's Shares are then traded, then the last day on which the Option may be exercised...

  • Page 160
    ... transferring Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased to the Company and satisfying such other requirements as may be imposed by the Committee; provided that such Shares have been held by the Participant for no less than six (6) months (or...

  • Page 161
    ... Market Value of a Share on the date of exercise over the exercise price and (B) is the Fair Market Value of a Share on the date of exercise. The holding requirement related to Shares that is established in this Section 4(b)(v) shall terminate with respect to the Options evidenced by this Agreement...

  • Page 162
    ... above named purposes: his/her name, home address and telephone number, office address (including department and employing entity) and telephone number, e-mail address, date of birth, citizenship, country of residence at the time of grant, work location country, system employee ID, employee local ID...

  • Page 163
    ... understands that he/she may contact the Company's Stock Plan Administration to obtain more information on the consequences of such objection. 12. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of...

  • Page 164
    ... the Company's annual report to stockholders and proxy statement related to its annual meeting of stockholders (which become available each year approximately three months after the end of the calendar year), and the Participant consents to receive such documents electronically through the Internet...

  • Page 165
    ...an employee and officer of the Company and formerly an officer and employee of AOL, LLC, ("AOL LLC") a Delaware limited liability company and subsidiary of Time Warner Inc., a Delaware corporation ("TWX"), was granted restricted stock units of TWX on April 15, 2009 pursuant to a stock incentive plan...

  • Page 166
    ... plan or policy, as in effect from time to time, to the extent that such definition also constitutes such Participant being considered "disabled" under Section 409A(a)(2)(C) of the Code. "Employment Agreement" means the employment agreement originally made March 12, 2009 among AOL LLC, Time Warner...

  • Page 167
    ... the AOL Inc. 2010 Stock Incentive Plan, as the same may be amended, supplemented or modified from time to time. "Retirement" means a voluntary termination of employment by the Participant (i) following the attainment of age 55 with ten (10) or more years of service as an employee or a director with...

  • Page 168
    ... provided, however, that if the Retained Distribution relates to a dividend paid in Shares, the Participant shall receive an additional amount of RSUs equal to the product of (I) the aggregate number of RSUs held by the Participant pursuant to this Agreement through the related dividend record date...

  • Page 169
    ...such portion of the Award and all Retained Distributions relating thereto shall be completely forfeited on the date of any such termination, unless otherwise provided in an employment agreement between the Participant and the Company or an Affiliate. If the Participant's Employment terminates (i) as...

  • Page 170
    ...issuance of Shares shall be made at the times otherwise provided hereunder as if no Change of Control had occurred. In the event of any such vesting as described in clauses (i) and (iii) of the preceding sentence, the date described in such clauses shall be treated as the Vesting Date. Limitation on...

  • Page 171
    ..., including whether any portion of such reduction shall be applied against any cash or any shares of stock of the Company or any other securities or property to which the Participant would otherwise have been entitled under this Agreement or under any such other Payments, and whether to waive the...

  • Page 172
    ... with Shares to be received upon vesting. Unless the Company shall permit another valuation method to be elected by the Participant, Shares used to pay any required withholding taxes shall be valued at the closing price of a Share as reported on the New York Stock Exchange Composite Tape on the date...

  • Page 173
    ... the Company's annual report to stockholders and proxy statement related to its annual meeting of stockholders (which become available each year approximately three months after the end of the calendar year), and the Participant consents to receive such documents electronically through the Internet...

  • Page 174
    ... above named purposes: his/her name, home address and telephone number, office address (including department and employing entity) and telephone number, e-mail address, date of birth, citizenship, country of residence at the time of grant, work location country, system employee ID, employee local ID...

  • Page 175
    ... and manage the Participant's participation in the Plan. Participant understands that Data may also be made available to public authorities as required by law, e.g., to the U.S. government. Participant understands that the Participant may, at any time, review Data and may provide updated Data or...

  • Page 176
    ...Restated Interactive Marketing Agreement ("Twenty-Third Amendment") is entered into by and between AOL INC., a Delaware corporation (successor in interest to AOL LLC), with its principal place of business at 770 Broadway, New York, NY 10003 ("AOL"), and GOOGLE INC., a Delaware corporation (successor...

  • Page 177
    ....com. B. Assignment of the Agreement to AOL Inc. AOL LLC, a Delaware limited liability company (formerly known as America Online, Inc.), with its principal place of business at 770 Broadway, New York, NY 10003 ("AOL LLC"), was the contracting party to the Existing Agreement. In connection...

  • Page 178
    ... Content Targeted Advertising Service to the extent such service is provided on Interim Properties under the Agreement, if any, shall terminate as of the Spin-Off Date. 2. Notice of Spin-Off. AOL shall notify Google (including notification via email to the partner manager at Google) of the Spin-Off...

  • Page 179
    ...10.3 (Indemnity) of Exhibit E of the Existing Agreement, AOL shall defend, indemnify, save and hold harmless Google and its Affiliates, direct or indirect parent companies of Google or such Affiliates, and their respective officers, directors, agents and employees from any and all third party claims...

  • Page 180
    ... the Existing Agreement. AOL INC. By: Name: Title: /s/ Steven Quan Steven Quan VP, Business Development GOOGLE INC. /s/ Nikesh Arora By: Nikesh Arora Name: President, Global Sales and Title: Business Development Google Inc. 2009.12.09 Date: 20:18:29 -08'00' Date: 12/9/09 GOOGLE & AOL CONFIDENTIAL...

  • Page 181
    ..., filed with the Securities and Exchange Commission on July 27, 2009, as amended from time to time; WHEREAS in furtherance of the Spin-Off, AOL has requested that Time Warner provide, and Time Warner has agreed to provide, (a) credit support in respect of certain of AOL's lease and trade obligations...

  • Page 182
    ... Saturday, Sunday or a holiday on which banks in New York City are authorized or required by law to close. "Cash Collateral Account" has the meaning set forth in Section 3(d). "Cash Collateralization Event" means the occurrence of any of the following: (i) AOL shall fail to make any payment when and...

  • Page 183
    ...AOL or for a substantial part of its assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors or (F) take any action for the purpose of effecting any of the foregoing. "Closing Date...

  • Page 184
    ... are released and terminated. "Spin-Off" has the meaning set forth in the recitals. "Time Warner" has the meaning set forth in the preamble. "TW Credit Fee Letter" means the TW Credit Fee Letter dated as of the date hereof between Time Warner and AOL. "TW Credit Support Certificate" has the meaning...

  • Page 185
    ... Upon the occurrence and during the continuation of a Cash Collateralization Event, AOL shall provide cash collateral securing AOL's obligations under this Agreement in respect of all then outstanding TW Support Obligations for the benefit of Time Warner and its subsidiaries pursuant to the terms of...

  • Page 186
    ... Time Warner pursuant to this Agreement or the TW Credit Fee Letter. Amounts in the Cash Collateral Account shall be returned to AOL within five Business Days following (i) in the case of cash collateralization pursuant to paragraph (c) of this Section, the full Release of all outstanding TW Support...

  • Page 187
    ... AOL shall pay all reasonable and actual out-of-pocket expenses incurred by Time Warner and its subsidiaries (including the reasonable and actual fees, charges and disbursements of counsel for Time Warner) after the Distribution Date in connection with (i) this Agreement, the TW Support Obligations...

  • Page 188
    ... to pay any such expenses incurred in connection with the voluntary replacement by Time Warner of a TW Support Obligation pursuant to clause (ii) of Section 2 hereof. (c) AOL shall indemnify Time Warner and its subsidiaries and their respective affiliates, directors, officers, employees, agents and...

  • Page 189
    ... or demands to or upon Time Warner shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile to it at One Time Warner Center, New York, NY 10019, Attention of Chief Financial Officer (Facsimile No. (212) 484-7175...

  • Page 190
    ... 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. SECTION 15. Jurisdiction; Consent to Service of Process.(a) Each party hereto hereby irrevocably and unconditionally submits, for itself and its property, to...

  • Page 191
    ... WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf and in their respective corporate names by their duly authorized officers as of the date first above written. TIME WARNER INC., by /s/ Edward B. Ruggiero Name: Title: Edward B. Ruggiero Senior Vice President...

  • Page 192
    AOL INC., by /s/ Arthur Minson Name: Title: Arthur Minson Executive Vice President and Chief Financial Officer 12

  • Page 193
    ... over 100 subsidiaries. Set forth below are the names of certain controlled subsidiaries, at least 50% owned, directly or indirectly, of AOL as of December 31, 2009 that carry on a substantial portion of AOL's lines of business. The names of various consolidated wholly-owned subsidiaries have been...

  • Page 194
    ... Services, Inc. Cyber Fin S.Ã r.l. Digital Marketing Services, Inc. EJV Reorganization, Inc. AOL Finance Services Inc. Going, Inc. Goowy Media Inc. InfoInterActive Corp. AOL Canada Inc. MapQuest, Inc. MapQuest PA, Inc. Netscape Communications Corporation AOL Global Operations Limited AOL Online...

  • Page 195
    ... pertaining to the AOL Inc. 2010 Stock Incentive Plan of our report dated March 2, 2010, with respect to the consolidated financial statements and schedule of AOL Inc. included in this Annual Report (Form 10K) for the year ended December 31, 2009. /s/ Ernst & Young LLP McLean, Virginia March 2, 2010

  • Page 196
    ... ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: Name: Title: Date: March 2, 2010 /s/ TIMOTHY...

  • Page 197
    ...'s ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. By: Name: Title: Date: March 2, 2010 /s/ ARTHUR...

  • Page 198
    ...-OXLEY ACT OF 2002 In connection with the Annual Report on Form 10-K for the year ended December 31, 2009 of AOL Inc. (the "Company"), as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned officers of the Company certifies, pursuant to 18...