America Online 2014 Annual Report Download - page 122

Download and view the complete annual report

Please find page 122 of the 2014 America Online annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 156

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156

AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
well as activities and costs not directly attributable to a particular segment such as restructuring costs, tax
settlements and other general business costs. The corporate and other category also includes the elimination of
revenues resulting from transactions between the Brand Group, Membership Group and AOL Platforms
segments.
For the year ended December 31, 2014, each of the Company’s operating segments represents a reportable
segment for external reporting purposes. No aggregation is necessary.
AOL Platforms sells advertising on third party websites and from advertising inventory managed within the
Membership and Brand Groups. The revenues associated with these transactions are included in the revenues
from external customers for AOL Platforms. An intersegment TAC expense is included in the expenses recorded
for AOL Platforms, with a corresponding amount of intersegment revenues included in the respective segment
results for the Membership and Brand Groups. The intersegment revenues and TAC expense are determined
based on similar transactions that AOL Platforms has with large third-party publishers.
The CODM uses adjusted operating income before depreciation and amortization (“Adjusted OIBDA”) to
evaluate the performance of the segments and allocate resources. Management considers Adjusted OIBDA to be
the appropriate metric to evaluate and compare the ongoing operating performance of the Company’s business on
a consistent basis across reporting periods, as it eliminates the effect of non-cash items which the Company does
not believe are indicative of its core operating performance. This measure of profit or loss is considered to be a
non-GAAP measure, and may be different than similarly-titled non-GAAP financial measures used by other
companies.
The Company views Adjusted OIBDA as the segment measure of profit or loss that is most useful to
investors since it is indicative of a segment’s performance and is representative of the method management uses
to evaluate performance and make decisions about allocating resources. The Company defines Adjusted OIBDA
as operating income before depreciation and amortization excluding the impact of restructuring costs, non-cash
equity-based compensation, gains and losses on all disposals of assets, non-cash asset impairments and write-offs
and special items, which management does not believe are indicative of the Company’s core operating
performance. Segment Adjusted OIBDA includes revenue from external customers and intersegment revenues,
costs and expenses directly attributable to the segment and allocations of shared corporate and technology costs
which are determined to be directly related to a particular segment.
106