America Online 2010 Annual Report Download - page 93

Table of Contents
AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
developments is $13.6 million to $28 million. Given that no amount within the range of loss appears to be a better estimate as of the date of issuing these
financial statements, the Company accrued a loss of $13.6 million, the low end of the range of estimated loss, in the fourth quarter of 2010 and reflected such
loss as a reduction to the previously recorded $119.6 million gain. The estimated loss includes the Company's best estimate of the fair value of the future
services anticipated to be provided without remuneration as well as the write-off of certain amounts due from Mail.ru. The Company will continue to evaluate
the estimate of the loss as the matter progresses toward resolution. The $5.4 million of sales proceeds allocated to a performance obligation of AOL continues
to be deferred at December 31, 2010 and will be recognized when the obligation is fulfilled at the end of the extended service period.
During the second and third quarters of 2010, the Company concluded that ICQ met the requirements for presentation as discontinued operations.
However, given the probable extension and modification of the services the Company is providing to ICQ, the Company subsequently concluded that the ICQ
operations, for the period prior to the sale, no longer meets the criteria for presentation as discontinued operations. As a result, the Company has recast the
assets and liabilities of ICQ as of December 31, 2009 from assets and liabilities of discontinued operations to their natural classifications within the
accompanying 2009 consolidated balance sheet. Results of discontinued operations and cash flows for the years ended December 31, 2009 and 2008 were not
impacted by the recast, as ICQ was never presented as a part of discontinued operations for those historical annual periods.
Other Dispositions
During 2010, the Company sold its investments in Kayak Software Corporation and Brightcove, Inc. for $35.9 million in net cash proceeds. The
Company recorded a pre-tax gain of $25.5 million on these sales within "Other income, net" in the consolidated financial statements.
During 2010, the Company sold a portion of its campus in Dulles, Virginia referred to as "Pacific Corporate Park" for a sales price of $144.5 million in
cash, exclusive of customary closing costs. In accordance with the accounting guidance for property, plant and equipment, assets held for sale are measured at
the lower of the carrying value or fair value less costs to sell. Upon meeting the assets held for sale criteria during the third quarter of 2010, the Company
determined the carrying value of the Pacific Corporate Park assets exceeded their fair value, determined by the selling price, less costs to sell. As a result, an
impairment charge of $6.2 million was recorded within costs of revenues during 2010. The Company did not record a significant gain or loss upon completion
of this sale.
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