America Online 2010 Annual Report Download - page 82

Table of Contents
AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
settlements with, the various taxing authorities, as well as changes in tax laws, regulations and interpretations. The consolidated tax provision for any given
year includes adjustments to prior year income tax accruals that are considered appropriate and any related estimated interest. The Company's policy is to
recognize, when applicable, interest and penalties on uncertain tax positions as part of income tax expense. Effective with the spin-off, the Company and Time
Warner entered into the Second Tax Matters Agreement, which generally provides that Time Warner shall indemnify AOL for consolidated income taxes
relating to any period prior to the spin-off. Accordingly, $368.1 million of liabilities for uncertain tax positions were reversed on the separation date, with an
offsetting increase to equity. Liabilities for uncertain tax positions are included in other long-term liabilities in the consolidated balance sheet. For further
information, see "Note 6" and "Note 13".
Certain Risks and Concentrations
The Company's financial instruments include primarily cash and equivalents, accounts receivable, accounts payable, accrued expenses and other current
liabilities. Due to the short-term nature of these assets and liabilities, their carrying amounts approximate their fair value. Financial instruments that
potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable.
The Company maintains its cash balances in the form of money market accounts and overnight deposits. The Company maintains cash deposits with
banks that at times exceed applicable insurance limits. The Company reduces its exposure to credit risk by maintaining such deposits with high quality
financial institutions that management believes are creditworthy.
The Company's exposure to customer credit risk relates primarily to advertising customers and individual subscribers to AOL's subscription access
service, and is dispersed among many different counterparties, with no single customer having a receivable balance in excess of 10% of total net receivables
at December 31, 2010 or 2009.
For each of the periods presented herein, the Company has had a contractual relationship with Google whereby Google provides paid text-based search
advertising and contextual advertising on AOL Properties. For the years ended December 31, 2010, 2009 and 2008, the revenues associated with the Google
relationship (substantially all of which were search and contextual revenues generated on AOL Properties), were $398.4 million, $556.7 million and
$677.9 million, respectively.
Property and equipment, net located outside the United States, which represent less than 1% of total assets, are not material. Revenues in different
geographical areas are as follows (in millions):
Years Ended December 31, (a)
2010 2009 2008
United States $ 2,193.3 $ 2,863.6 $ 3,623.6
United Kingdom 102.4 157.9 244.5
Germany 43.3 59.2 82.2
France 17.3 70.3 82.0
Canada 36.5 35.7 48.0
Other international 23.9 59.1 72.4
Total international 223.4 382.2 529.1
Total $ 2,416.7 $ 3,245.8 $ 4,152.7
(a) Revenues are attributed to countries based on the location of customers.
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