America Online 2010 Annual Report Download - page 88

Table of Contents
AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Based on our annual goodwill impairment analysis performed as of December 1, 2010, we have determined that the estimated fair value of our sole
reporting unit exceeded its carrying value by approximately 42%. In determining the fair value of the Company's sole reporting unit for the annual impairment
analysis, the Company again used a market-based approach, calculating its market capitalization based on its stock price adjusted by a 25% control premium.
As the estimated fair value of the Company's sole reporting unit exceeded its carrying value, the second step of the goodwill impairment test did not need to
be performed and therefore no additional impairment charge was recorded during 2010.
In connection with the annual impairment analysis performed during the fourth quarter of 2009, the results of the Step 1 process indicated that the fair
value of AOL exceeded its carrying value. As a result, the second step of the goodwill impairment test did not need to be performed, and therefore no
impairment charge was recorded for 2009.
In connection with the annual impairment analysis performed during the fourth quarter of 2008, AOL determined that the carrying value of its goodwill
was impaired and, accordingly, recorded a goodwill impairment charge of $2,207.0 million to write goodwill down to its implied fair value.
Intangible Assets
The Company's intangible assets and related accumulated amortization at December 31, 2010 and 2009 consisted of the following (in millions):
December 31, 2010 December 31, 2009
Gross
Accumulated
Amortization (a) Net Gross
Accumulated
Amortization (a) Net
Acquired technology $ 848.8 $ (783.9) $ 64.9 $ 873.5 $ (770.5) $ 103.0
Customer relationships 174.5 (150.2) 24.3 205.4 (139.3) 66.1
Trade names 59.3 (55.1) 4.2 96.4 (65.6) 30.8
Other intangible assets 60.0 (53.8) 6.2 55.8 (45.3) 10.5
Total $ 1,142.6 $ (1,043.0) $ 99.6 $ 1,231.1 $ (1,020.7) $ 210.4
(a) Amortization of intangible assets is provided on a straight-line basis over their respective useful lives, which range from two to seven years. The
Company evaluates the useful lives of its finite-lived intangible assets each reporting period to determine whether events or circumstances warrant
revised estimates of useful lives.
The Company recorded amortization expense of $145.3 million, $137.9 million and $159.0 million for the years ended December 31, 2010, 2009 and
2008, respectively. Based on the amount of intangible assets as of December 31, 2010 , the estimated amortization expense for each of the succeeding five
years ending December 31 is as follows (in millions):
2011 $ 74.8
2012 11.1
2013 6.5
2014 4.1
2015 3.1
Total $ 99.6
The amounts above may vary as acquisitions and dispositions occur in the future.
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