America Online 2010 Annual Report Download - page 59

Table of Contents
AOL INC.
PART II—ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating Activities
The following table presents cash provided by continuing operations for the periods presented (in millions):
Years Ended December 31,
2010 2009 2008
Net income (loss) $ (782.5) $ 248.5 $ (1,526.6)
Less: Discontinued operations, net of tax 8.2 (2.9) (6.0)
Net income (loss) from continuing operations (790.7) 251.4 (1,520.6)
Adjustments for non-cash and non-operating items:
Depreciation and amortization 341.6 399.0 469.6
Non-cash asset impairments 1,426.5 23.1 2,240.0
(Gain) loss on sale of investments and consolidated businesses, net (132.5) 0.2 (0.3)
Non-cash equity-based compensation 36.1 12.5 19.6
Amounts related to securities litigation and government investigations, net of recoveries — 27.9 20.8
Deferred income taxes (183.9) (4.7) (51.0)
All other, net, including working capital changes (103.6) 197.3 (241.0)
Cash provided by continuing operations $ 593.5 $ 906.7 $ 937.1
Cash provided by continuing operations decreased $313.2 million for the year ended December 31, 2010, as compared to the year ended December 31,
2009. Our operating loss was $982.6 million for the year ended December 31, 2010, a decrease of $1,445.2 million as compared to the year ended
December 31, 2009. Excluding the decline in operating income related to the $1,414.4 million non-cash goodwill impairment charge in 2010, operating
income decreased by $30.8 million. This decrease in operating income along with the decrease in cash provided by changes in working capital drove the
decline in cash provided by continuing operations. The decrease in cash provided by working capital was due primarily to restructuring costs incurred in 2009
and paid in 2010.
Cash provided by continuing operations decreased $30.4 million for the year ended December 31, 2009, as compared to the year ended December 31,
2008. Our operating income was $462.6 million for the year ended December 31, 2009, an increase of $1,626.1 million as compared to the year ended
December 31, 2008. Excluding the decline in operating income for the year ended December 31, 2008 related to the $2,207.0 million non-cash goodwill
impairment charge, operating income decreased by $580.9 million driving the decrease in cash provided by operations. The decrease in operating income was
partially offset by an increase in cash provided by working capital, driven mainly by lower employee bonus payments in 2009 and the restructuring charge
incurred in 2009, the majority of which was paid in 2010.
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