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AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
StudioNow and about.me
During the first quarter of 2013, the Company disposed of controlling interests in both StudioNow and
about.me in two separate transactions. In aggregate, the Company recorded a gain of $2.2 million on these
transactions which is included in gain on disposal of assets on the Company’s statement of comprehensive
income. The retained interests held by the Company in StudioNow and about.me are accounted for under the cost
method as the Company does not exercise significant influence over either business. Due to the Company’s
significant continuing involvement with each of the disposed entities, these dispositions did not meet the criteria
to be classified as discontinued operations in the Company’s financial statements.
Patent Portfolio Sale and License
On June 15, 2012, the Company sold approximately 800 patents and their related patent applications (the
“Sold Patents”) to Microsoft Corporation (“Microsoft”), and granted Microsoft a non-exclusive license to the
Company’s retained patent portfolio, for aggregate proceeds of $1,056 million in cash (excluding transaction
costs). The transaction was structured as a sale of all of the outstanding shares of a wholly owned non-operating
subsidiary and the direct sale of certain other patents not held by the subsidiary.
The disposed assets had a carrying value of $3.2 million on the Company’s balance sheet and accordingly,
the Company recorded a gain on the disposition of the Sold Patents of $946.5 million (which represents the
consideration allocated to the sale less the carrying value of the disposed assets and transaction costs that were
contingent on closing). With respect to the licensing portion of the transaction, the Company recognized income
from licensing its retained patent portfolio of $96.0 million during the year ended December 31, 2012.
NOTE 5—LONG-TERM DEBT AND OTHER FINANCING ARRANGEMENTS
Capital Leases
Capital lease obligations consist of ($ in millions):
Weighted Average
Interest Rate at
December 31, 2014 Maturities
Outstanding Amount
December 31,
2014
December 31,
2013
Capital lease obligations ....................... 4.56% 2015-2019 $ 145.1 $ 111.7
Amount due within one year .................... (54.0) (55.5)
Total long-term capital lease obligations .......... $ 91.1 $ 56.2
Assets recorded under capital lease obligations totaled $286.0 million and $233.0 million at December 31,
2014 and 2013, respectively. Related accumulated amortization totaled $143.9 million and $124.6 million at
December 31, 2014 and 2013, respectively.
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