America Online 2010 Annual Report Download - page 108

Table of Contents
AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
See "Note 4" for information on a contingency related to ICQ.
NOTE 12—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of (in millions):
December 31,
2010 2009
TAC $ 55.4 $ 137.6
Restructuring liabilities 29.2 108.1
Taxes 24.7 29.7
Costs of revenues (excluding TAC) 42.1 24.9
Network and related costs 6.9 10.4
Advertising and marketing 9.6 10.0
Rent and facilities expense 5.5 4.5
Member support services 4.8 4.0
Other accrued expenses 58.1 71.2
Total accrued expenses and other liabilities $ 236.3 $ 400.4
NOTE 13—RELATED PARTY TRANSACTIONS
Acquisition of Patch Media Corporation
On June 10, 2009, AOL purchased Patch Media Corporation ("Patch"), a news, information and community platform business dedicated to providing
comprehensive local information and services for individual towns and communities, for approximately $7.0 million in cash. Approximately $700,000 of the
consideration was held in an indemnity escrow account until the first anniversary of the closing.
At the time of closing, Timothy M. Armstrong, AOL's Chairman and Chief Executive Officer, held, indirectly, through Polar Capital Group, LLC
("Polar Capital") (a private investment company which he founded), economic interests in Patch that entitled him to receive approximately 75% of the
transaction consideration. Mr. Armstrong's original investment in Patch, made in December 2007 through Polar Capital, was approximately $4.5 million. In
connection with the transaction, Mr. Armstrong, through Polar Capital, waived his right to receive any transaction consideration in excess of his original $4.5
million investment, opting to accept only the return of his initial investment in AOL common stock. In addition, Mr. Armstrong elected to return the $4.5
million (approximately $450,000 of which is being held in the indemnity escrow account for a year) that he was entitled to receive in connection with the
transaction to AOL, to be held by AOL until after the Company's separation from Time Warner in exchange for the subsequent issuance of AOL common
stock. In exchange for the $4.5 million he was entitled to receive, during 2010, AOL issued to Polar Capital 194,857 shares of AOL common stock.
The results of operations of Patch have been included in the Company's consolidated financial statements from the date of acquisition, and were not
material to the Company's consolidated results for the years ended December 31, 2010 and 2009.
Transactions with Time Warner
Through the date of the spin-off, AOL had certain related party relationships with Time Warner and its subsidiaries. In connection with the separation,
AOL entered into the Separation Agreement and several other
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