America Online 2009 Annual Report Download - page 47

Table of Contents
In connection with its analysis, the financial advisory firm assumed and relied upon the accuracy and completeness of the financial and other
information that was available to it from public sources, that was provided to it by Time Warner or its representatives, or that was otherwise available to it,
without independent verification of such information. With respect to the financial forecasts, the financial advisory firm assumed no responsibility for such
forecasts or the assumptions on which they were based and assumed that such forecasts had been reasonably prepared on a basis reflecting the best currently
available estimates and judgments of the management of Time Warner as to the future financial performance of Patch, and that such financial information was
materially complete.
Based on the analyses undertaken, and subject to the above assumptions and qualifications, the financial advisory firm confirmed that the $7.0 million
value ascribed by us was within the range of estimated fair market values for Patch as of the transaction date.
The Patch acquisition did not significantly affect our consolidated financial results for the year ended December 31, 2009. As part of our plan to expand
our local strategic initiatives, we currently anticipate investing up to $50.0 million in Patch during the remainder of 2010.
Results of Operations
Recent Accounting Standards
See "Note 1: Description of Business, Basis of Presentation and Summary of Significant Accounting Policies" in our accompanying consolidated
financial statements for a discussion of recent accounting standards.
Consolidated Results
The following table presents our historical operating results as a percentage of revenues for the periods presented and should be read in conjunction
with the accompanying consolidated statements of operations:
Years Ended December 31,
2009 2008 2007
Costs and expenses:
Costs of revenues 58% 55% 51%
Selling, general and administrative 17 16 19
Amortization of intangible assets 4 4 2
Amounts related to securities litigation and government investigations, net of recoveries 1 — 3
Restructuring costs 6 — 2
Goodwill impairment charge — 53 —
Gain on disposal of assets and consolidated businesses, net — — (13)
Total costs and expenses 86% 128% 64%
Operating income (loss) 14% (28)% 36%
The following table presents our revenues, by revenue type, for the periods presented (in millions):
Years Ended December 31,
2009 2008
% Change
from 2008
to 2009 2007
% Change
from 2007
to 2008
Revenues:
Advertising $ 1,748.3 $ 2,096.4 (17)% $ 2,230.6 (6)%
Subscription 1,388.8 1,929.3 (28)% 2,787.9 (31)%
Other 120.3 140.1 (14)% 162.2 (14)%
Total revenues $ 3,257.4 $ 4,165.8 (22)% $ 5,180.7 (20)%
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