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AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The Company performed its annual goodwill impairment test for the Brand Group, Membership Group and
AOL Platforms reporting units as of December 1, 2013. The estimated fair value exceeded the carrying value for
each reporting unit, and therefore, the second step of the goodwill impairment test was not required for any of the
Company’s four reporting units.
2012 Goodwill Impairment Analysis
As a result of a change in management structure in the fourth quarter of 2012, the Company concluded that
it had four reporting units: the Brand Group, the Membership Group, AOL Platforms and Patch. As such, the
Company was required to perform a goodwill impairment analysis immediately before its change in reporting
units and immediately after the change. As a result, as of December 1, 2012, the Company performed both a
consolidated goodwill impairment analysis (prior to the change in reporting units, the company had a single
consolidated reporting unit for goodwill impairment testing) and a goodwill impairment analysis for each of the
four reporting units subsequently.
The Company had no goodwill impairment charges in 2012.
Intangible Assets
The Company’s intangible assets and related accumulated amortization at December 31, 2014 and 2013
consisted of the following (in millions):
December 31, 2014 December 31, 2013
Gross
Accumulated
Amortization (a) Net Gross
Accumulated
Amortization (a) Net
Acquired technology ........... $ 979.0 $ (850.5) $ 128.5 $ 907.4 $ (824.4) $ 83.0
Customer relationships .......... 280.6 (243.5) 37.1 278.9 (222.2) 56.7
Trade names .................. 146.6 (90.1) 56.5 144.7 (79.4) 65.3
Other intangible assets .......... 67.9 (66.0) 1.9 69.2 (65.8) 3.4
Total ........................ $ 1,474.1 $ (1,250.1) $ 224.0 $ 1,400.2 $ (1,191.8) $ 208.4
(a) Amortization of intangible assets is provided on a straight-line basis over their respective useful lives, which
generally range from one to ten years. The Company evaluates the useful lives of its finite-lived intangible
assets each reporting period to determine whether events or circumstances warrant revised estimates of
useful lives.
The Company recorded amortization expense of $65.6 million, $45.1 million and $38.2 million for the years
ended December 31, 2014, 2013 and 2012, respectively. Based on the amount of intangible assets as of
December 31, 2014, the estimated amortization expense for each of the succeeding five years ending
December 31 is as follows (in millions):
2015 .............................................................................. $ 59.5
2016 .............................................................................. 51.2
2017 .............................................................................. 49.6
2018 .............................................................................. 41.1
2019 .............................................................................. 13.7
Total .............................................................................. $ 215.1
The amounts above may vary as acquisitions and dispositions occur in the future, or as a result of the events
or circumstances that warrant revised estimates of useful lives.
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