America Online 2010 Annual Report Download - page 95

Table of Contents
AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Senior Secured Revolving Credit Facility
On December 9, 2009, in connection with the spin-off, the Company entered into a secured credit agreement (the "Credit Agreement") for a 364-day
$250.0 million senior secured revolving credit facility (the "Revolving Credit Facility"), for use, as necessary, for general corporate purposes. On
September 30, 2010 (the "Termination Date"), the Company terminated its Revolving Credit Facility based on an analysis of the Company's cash balance at
that date and projected cash flows from operations. From December 9, 2009 through the Termination Date, the Company did not borrow under the terms of
the Revolving Credit Facility. The Revolving Credit Facility was set to expire on December 8, 2010 and the Company did not pay any penalties as a result of
the early termination.
Time Warner guaranteed all of the Company's 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. The
Company continues to engage in certain lease guarantees and other transactions with Time Warner. See "Note 13" for additional information on these
transactions.
In relation to the Revolving Credit Facility, the Company and each of the Company's material, wholly owned domestic subsidiaries entered into a
security agreement in favor of Bank of America, N.A., as collateral agent (the "Security Agreement"), for the benefit of the secured parties thereunder. In
connection with the termination of the Revolving Credit Facility, the Security Agreement also terminated.
Interest Expense
Interest expense amounted to $11.2 million, $5.2 million and $8.0 million for the years ended December 31, 2010, 2009 and 2008, respectively, and is
included in "Other income (loss), net" on the consolidated statements of operations. Interest expense for 2010 consists of $4.3 million related to interest on
capital leases and $6.9 million related to credit facility fees paid to Time Warner. The weighted-average interest rate on AOL's capital lease obligations was
5.81% and 5.67% at December 31, 2010 and 2009, respectively. The rate on capital lease obligations due within one year was 5.78% at December 31, 2010.
NOTE 6—INCOME TAXES
The components of income (loss) from continuing operations before income taxes were as follows (in millions):
Years Ended December 31,
2010 2009 2008
(recast) (recast)
Domestic $ (805.8) $ 583.6 $ (1,123.0)
Foreign (163.4) (123.5) (44.6)
Total $ (969.2) $ 460.1 $ (1,167.6)
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