America Online 2010 Annual Report Download - page 51

Table of Contents
AOL INC.
PART II—ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Geographical Concentration of Revenues
For the periods presented herein, a significant majority of our revenues have been generated in the United States. Substantially all of the non-United
States revenues for these periods were generated by our European operations (primarily in the United Kingdom, France and Germany). We expect the
significant majority of our revenues to continue to be generated in the United States for the foreseeable future. See "Note 1" in our accompanying
consolidated financial statements for further discussion of our geographical concentrations.
Operating Costs and Expenses
The following table presents our operating costs and expenses for the periods presented (in millions):
Years Ended December 31,
2010 2009
% Change
from 2009
to 2010 2008
% Change
from 2008
to 2009
Costs of revenues $ 1,420.6 $ 1,893.2 (25)% $ 2,273.1 (17)%
Selling, general and administrative 491.2 535.0 (8)% 640.0 (16)%
Amortization of intangible assets 145.3 137.9 5% 159.0 (13)%
Amounts related to securities litigation and government investigations, net of recoveries — 27.9 (100)% 20.8 34%
Restructuring costs 33.8 189.2 (82)% 16.6 NM
Goodwill impairment charge 1,414.4 — NM 2,207.0 (100)%
(Gain) loss on disposal of assets and consolidated businesses, net (106.0) — NM (0.3) (100)%
NM = not meaningful
The following table represents our operating costs and expenses as a percentage of revenues for the periods presented:
Years Ended December 31,
2010 2009 2008
Operating costs and expenses:
Costs of revenues 59% 58% 55%
Selling, general and administrative 20 17 15
Amortization of intangible assets 6 4 4
Amounts related to securities litigation and government investigations, net of recoveries — 1 1
Restructuring costs 1 6 —
Subtotal of operating costs and expenses before goodwill impairment charge 86% 86% 75%
Goodwill impairment charge 59 — 53
Gain on disposal of assets and consolidated businesses, net (4) — —
Total operating costs and expenses 141% 86% 128%
Costs of Revenues
The following categories of costs are generally included in costs of revenues: network-related costs, TAC, product development costs and other costs of
revenues. The largest component of our costs of revenues is
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