America Online 2010 Annual Report Download - page 62

Table of Contents
AOL INC.
PART II—ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Principal Debt Obligations
On December 9, 2009, in connection with the spin-off, we entered into a Revolving Credit Facility, for use, as necessary, for general corporate
purposes. On the Termination Date, we terminated our Revolving Credit Facility given our cash balance at that date and projected cash flows from operations.
From December 9, 2009 through the Termination Date, we did not borrow under the terms of the Revolving Credit Facility. The Revolving Credit Facility
was set to expire on December 8, 2010, and we did not pay any penalties as a result of the early termination.
Time Warner guaranteed all of our obligations under the Revolving Credit Facility, pursuant to a guarantee dated as of December 9, 2009 (the "Time
Warner Guarantee"). In connection with the termination of the Revolving Credit Facility, the Time Warner Guarantee also terminated. We continue to engage
in certain lease guarantees and other transactions with Time Warner. See "Note 13" in our accompanying consolidated financial statements.
See "Note 5" in our accompanying consolidated financial statements and "Part I. Item 1A—Risk Factors—We may need to raise additional capital, and
we cannot be sure that additional financing will be available" herein for additional information.
Contractual Obligations and Commitments
We have obligations under certain contractual arrangements to make future payments for goods and services. These contractual obligations secure the
future rights to various assets and services to be used in the normal course of operations. For example, we are contractually committed to make certain
minimum lease payments for the use of property under operating lease agreements. In accordance with applicable accounting rules, the future rights and
obligations pertaining to firm commitments, such as operating lease obligations and certain purchase obligations under contracts, are not reflected as assets or
liabilities in the accompanying consolidated balance sheets.
The following table presents certain payments due under contractual obligations with minimum firm commitments as of December 31, 2010 (in
millions):
Total 2011 2012-2013 2014-2015 Thereafter
Capital lease obligations $ 93.5 $ 39.2 $ 46.3 $ 8.0 $ —
Net operating lease obligations 325.6 41.5 72.5 65.3 146.3
Purchase obligations 103.0 63.8 35.2 3.3 0.7
Total contractual obligations $ 522.1 $ 144.5 $ 154.0 $ 76.6 $ 147.0
The following is a description of our material contractual obligations at December 31, 2010:
• Capital lease obligations represent the minimum lease payments under non-cancelable capital leases, primarily for network equipment financed
under capital leases. See "Note 5" in our accompanying consolidated financial statements for more information.
• Net operating lease obligations represent the minimum lease payments under non-cancelable operating leases, net of contractually committed
sublease income, primarily for our real estate and operating equipment in various locations around the world. Included in the above table are
approximately
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