America Online 2014 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 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.
PART II—ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following table presents our reconciliation of Adjusted OIBDA to operating income (in millions):
Years Ended December 31,
2014 2013
Change
from 2013
to 2014
% Change
from 2013
to 2014 2012
Change
from 2012
to 2013
% Change
from 2012
to 2013
Operating income .............. $ 205.5 $ 190.3 $ 15.2 8 % $ 1,201.9 $ (1,011.6) (84)%
Add: Depreciation ......... 134.7 128.9 5.8 4 % 138.7 (9.8) (7)%
Add: Amortization of
intangible assets ......... 65.6 45.1 20.5 45 % 38.2 6.9 18 %
Add: Restructuring costs .... 22.0 41.3 (19.3) (47)% 10.1 31.2 NM
Add: Equity-based
compensation ........... 70.7 47.0 23.7 50 % 39.5 7.5 19 %
Add: Asset impairments and
write-offs .............. 13.6 30.6 (17.0) (56)% 6.1 24.5 NM
Add: Losses/(gains) on
disposal of assets, net ..... (4.8) (2.5) (2.3) (92)% (964.2) 961.7 (100)%
Add: Special Items ......... — — — NM (57.7) 57.7 (100)%
Adjusted OIBDA .............. $ 507.3 $ 480.7 $ 26.6 6 % $ 412.6 $ 68.1 17 %
Adjusted OIBDA increased for the year ended December 31, 2014 as compared to the year ended
December 31, 2013 due primarily to the increase in revenues and decline in personnel costs, partially offset by an
increase in TAC.
Adjusted OIBDA increased for the year ended December 31, 2013 as compared to the year ended
December 31, 2012 primarily due to the increase in revenues and decline in general and administrative expense,
partially offset by the increase in costs of revenues.
Special items for the year ended December 31, 2012 include patent licensing income of $96.0 million and
costs related to the patent sale and license of $15.7 million, as well as proxy contest costs of $8.9 million, $7.6
million of tax settlement expenses and acquisition-related costs of $5.1 million.
Segment Results of Operations
We have three reportable segments which are determined based on the properties, products and services we
provide and how our chief operating decision maker evaluates the business and assesses performance. Our
segment results reflect information presented on the same basis that we use for internal management reporting.
The segment profitability measure used in our internal management reporting and presented herein is Adjusted
OIBDA. See “Note 12” in our accompanying consolidated financial statements for additional information on our
segments and a reconciliation of total consolidated Adjusted OIBDA to operating income.
48