America Online 2010 Annual Report Download - page 107

Table of Contents
AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
California and included in the above table are approximately $46.8 million of payments associated with this property. AOL has leased this space for a
non-cancelable initial lease term that ends in June 2017 with no renewal options. Rent is abated for the first nine months of the lease term, with partial
rent abatement for an additional three months. Only operating expenses are to be paid during the rent abatement period. Also included in the above
table are payments for ongoing leases associated with AOL's restructuring activities. AOL has recorded a liability on the balance sheet of $18.0 million
related to these payments.
AOL has commitments under certain network licensing, royalty and other agreements aggregating approximately $103.0 million at December 31, 2010,
which are payable principally over a three-year period, as follows (in millions):
2011 $ 63.8
2012-2013 35.2
2014-2015 3.3
Thereafter 0.7
Total $ 103.0
The Company also has certain contractual arrangements that would require it to make payments or provide funding if certain circumstances occur
("contingent commitments"). At December 31, 2010, these arrangements related primarily to letters of credit and totaled $4.1 million. The Company does not
expect that these contingent commitments will result in any material amounts being paid by the Company in the foreseeable future.
Included in the commitment amounts discussed above are certain commitments to Time Warner, see "Note 13" for additional information.
Contingencies
On September 22, 2006, Salvadore Ramkissoon and two unnamed plaintiffs filed a putative class action against AOL LLC in the U.S. District Court for
the Northern District of California asserting claims under the Electronic Communications Privacy Act, the California Consumer Records Act, the California
Consumer Legal Remedies Act, the California False Advertising Law and the California Unfair Competition Law, as well as common law claims for unjust
enrichment and public disclosure of private facts. The claims arise out of AOL's public posting of AOL member search queries in late July 2006.
The Court has dismissed without prejudice the named Plaintiff (Salvadore Ramkisoon) and all but the California False Advertising Law and California
Unfair Competition Law claims, under which the unnamed plaintiffs seek only declaratory and injunctive relief regarding AOL's search query retention
practices. No claims for monetary relief remain in the case. On February 11, 2011, the parties filed briefs in response to the Court's order to address the issue
of whether the Court lacks jurisdiction over the subject matter of the remaining claims. Based on facts and circumstances available, the Company does not
believe it is probable or reasonably possible a loss has been incurred related to this matter.
In addition to the matter listed above, AOL is a party to a variety of legal proceedings that arise in the normal course of 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 the Company's business, financial position, results of operations or cash flows. Regardless
of the outcome, legal proceedings can have an adverse effect on the Company because of defense costs, diversion of management resources and other factors.
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