America Online 2010 Annual Report Download - page 39

Table of Contents
AOL INC.
PART II—ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion of our results of operations and financial condition together with our audited consolidated financial
statements and the notes thereto included elsewhere in this Annual Report as well as the discussion in the "Item 1—Business" section. This discussion
contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on
current expectations, estimates, assumptions and projections about our industry, business and future financial results. Our actual results could differ
materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed in "Item 1A—Risk
Factors" and "Cautionary Statement Concerning Forward-Looking Statements."
Introduction
Management's discussion and analysis of financial condition and results of operations ("MD&A") is a supplement to the accompanying consolidated
financial statements and provides additional information on our business, recent developments, results of operations, liquidity and capital resources and
critical accounting policies. MD&A is organized as follows:
• Overview. This section provides a general description of our business and outlook into 2011, as well as recent developments we believe are
important in understanding our results of operations and financial condition or in understanding anticipated future trends.
• Results of operations. This section provides an analysis of our results of operations for the three years in the period ended December 31, 2010.
• Liquidity and capital resources. This section provides a discussion of our current financial condition and an analysis of our cash flows for the
three years in the period ended December 31, 2010. This section also provides a discussion of our principal debt obligations, contractual
obligations and commitments, off-balance sheet arrangements, indemnification obligations and customer credit risk that existed at December 31,
2010. This section also includes a discussion of the amount of financial capacity available to fund our future commitments and ongoing operating
activities.
• Critical accounting policies. This section identifies and summarizes those accounting policies that are considered important to our results of
operations and financial condition and require significant judgment and estimates on the part of management.
Overview
The Spin-Off
On December 9, 2009, we completed our legal and structural separation from Time Warner Inc. ("Time Warner") via a spin-off (the "spin-off"). Prior to
the spin-off, we were a subsidiary of Time Warner. The financial information prior to the spin-off may not necessarily reflect our financial position, results of
operations and cash flows in the future or what our financial position, results of operations and cash flows would have been had we been an independent,
publicly-traded company during all of the periods presented. We are incurring additional costs to be able to function as an independent, publicly-traded
company, including incremental costs related to corporate finance, governance and public reporting.
In connection with the spin-off, we entered into transactions with Time Warner that either have not existed historically or that are on terms different
from the terms of arrangements or agreements that existed prior to the
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