America Online 2009 Annual Report Download - page 35
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Table of Contents
Between December 27, 2006 and July 6, 2009, AOL Europe Services S.à r.l. (which we refer to as "AOL Luxembourg"), a wholly-owned subsidiary of
AOL organized under the laws 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 agreement with the French tax authority to resolve this matter. The Company recorded an incremental reserve and
corresponding expense of $14.7 million in the third quarter of 2009 related to this matter. The settlement payment was made in the fourth quarter of 2009.
In addition to the matters listed above, we are a party to a variety of legal proceedings that arise in the normal course of our business. While the results
of such normal course legal proceedings cannot be predicted with certainty, management believes that, based on current knowledge, the final outcome of the
current pending matters will not have a material adverse effect on our financial position, results of operations or cash flows. Regardless of the outcome, legal
proceedings can have an adverse effect on us because of defense costs, diversion of management resources and other factors. See "Item 1A—Risk Factors—
Risks Relating to Our Business—If we cannot continue to enforce and protect our intellectual property rights, our business could be adversely affected" and
"Item 1A—Risk Factors—Risks Relating to Our Business—We have been, and may in the future be, subject to claims of intellectual property infringement
that could adversely affect our business" included elsewhere in this Annual Report.
ITEM 4. RESERVED
31