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<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE 1—DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION </font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">AND</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;"> SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">Description of Business </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">For a description of the business of AOL Inc. (“AOL” or the “Company”), see “Note 1” to the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended </font><font style="font-family:Times New Roman;font-size:10pt;">December 31,</font><font style="font-family:Times New Roman;font-size:10pt;"> 2011 (the “Annual Report”).</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:12pt;"><></font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;">Basis of Presentation </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Basis of Consolidation </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">The consolidated financial statements include 100% of the assets, liabilities, revenues, expenses and cash flows of AOL</font><font style="font-family:Times New Roman;font-size:10pt;"> and</font><font style="font-family:Times New Roman;font-size:10pt;"> all voting interest entities in</font><font style="font-family:Times New Roman;font-size:10pt;"> which AOL has a controlling voting interest</font><font style="font-family:Times New Roman;font-size:10pt;"> (“subsidiaries</font><font style="font-family:Times New Roman;font-size:10pt;">”)</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">and variable interest entities in which AOL is the primary beneficiary</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">in</font><font style="font-family:Times New Roman;font-size:10pt;"> a</font><font style="font-family:Times New Roman;font-size:10pt;">ccordance with the consolidation</font><font style="font-family:Times New Roman;font-size:10pt;"> accounting guidance</font><font style="font-family:Times New Roman;font-size:10pt;">. Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation. </font><font style="font-family:Times New Roman;font-size:10pt;">The consolidated balances of the Company's </font><font style="font-family:Times New Roman;font-size:10pt;">variable</font><font style="font-family:Times New Roman;font-size:10pt;"> interest entities are not material to the Company's consolidated financial statements for the periods presented. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">The financial position and operat</font><font style="font-family:Times New Roman;font-size:10pt;">ing results of the majority of</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">AOL's </font><font style="font-family:Times New Roman;font-size:10pt;">foreign operations are consolidated using the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. Resulting translation gains or losses are included in the consolidated balance sheet as a component of accumulated other comprehensive income (loss), net. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Redeemable Noncontrolling Interest</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The noncontrolling interest in a joint venture between Mitsui & Company Ltd. (“Mitsui”) and AOL (“Ad.com Japan”) is classified outside of permanent equity in the Company's consolidated balance sheet as of September 30, 2012, due to a redemption right available to the noncontrolling interest holder in the future. The noncontrolling interest holder's right to redeem its stock is exercisable any time between July 1 and July 30 of any year, commencing with July 1, 2014. Net income in the consolidated statement of comprehensive income for the three and nine months ended September 30, 2012 reflects 100 percent of the results of Ad.com </font><font style="font-family:Times New Roman;font-size:10pt;">Japan</font><font style="font-family:Times New Roman;font-size:10pt;"> as the Company has a controlling interest in the entity. Net income is subsequently adjusted to exclude AOL's noncontrolling interests to arrive at net income attributable to AOL Inc. </font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Changes in Basis of Presentation</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The Company has</font><font style="font-family:Times New Roman;font-size:10pt;"> changed the classification of certain amounts within the accompanying consolidated statement of ca</font><font style="font-family:Times New Roman;font-size:10pt;">sh flows for the</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30,</font><font style="font-family:Times New Roman;font-size:10pt;"> 2011</font><font style="font-family:Times New Roman;font-size:10pt;">. The </font><font style="font-family:Times New Roman;font-size:10pt;">revisions</font><font style="font-family:Times New Roman;font-size:10pt;">,</font><font style="font-family:Times New Roman;font-size:10pt;"> related to </font><font style="font-family:Times New Roman;font-size:10pt;">accrued liabilities and capital expenditures</font><font style="font-family:Times New Roman;font-size:10pt;">,</font><font style="font-family:Times New Roman;font-size:10pt;"> do</font><font style="font-family:Times New Roman;font-size:10pt;"> not have a material impact on the </font><font style="font-family:Times New Roman;font-size:10pt;">consolidated </font><font style="font-family:Times New Roman;font-size:10pt;">statement of cash flows</font><font style="font-family:Times New Roman;font-size:10pt;">.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Use of Estimates </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">The preparation of the financial statements in conformity with </font><font style="font-family:Times New Roman;font-size:10pt;">U.S.</font><font style="font-family:Times New Roman;font-size:10pt;"> generally accept</font><font style="font-family:Times New Roman;font-size:10pt;">ed accounting principles (</font><font style="font-family:Times New Roman;font-size:10pt;">“</font><font style="font-family:Times New Roman;font-size:10pt;">GAAP</font><font style="font-family:Times New Roman;font-size:10pt;">”</font><font style="font-family:Times New Roman;font-size:10pt;">) requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial statement</font><font style="font-family:Times New Roman;font-size:10pt;">s include </font><font style="font-family:Times New Roman;font-size:10pt;">asset impairments, reserves established for doubtful accounts, equity-based compensation, depreciation and amortization, business combinations, income taxes, litigation matters and contingencies. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Interim Financial Statements </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">The interim consolidated financial statements are unaudited; however, in the opinion of management, they contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the financial position, the results of operations and cash flows for the periods presented in conformity with GAAP applicable to interim periods. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of AOL in the Annual Report.</font></p><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 18px"><td colspan="14" style="width: 636px; text-align:left;border-color:#000000;min-width:636px;"><font style="FONT-WEIGHT: bold;FONT-STYLE: italic;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">Information about Geographical Areas</font><sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td colspan="13" style="width: 602px; text-align:left;border-color:#000000;min-width:602px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">Revenues in different geographical areas are as follows (in millions):</font><sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 16px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:center;border-color:#000000;min-width:12px;"> </td><td colspan="5" style="width: 199px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:199px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Three Months Ended September 30,</font><sup>(a)</sup></td><td style="width: 12px; text-align:center;border-color:#000000;min-width:12px;"> </td><td colspan="5" style="width: 199px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:199px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Nine Months Ended September 30,</font><sup>(a)</sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td colspan="2" style="width: 92px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:92px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td colspan="2" style="width: 92px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:92px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td colspan="2" style="width: 92px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:92px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td colspan="2" style="width: 92px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:92px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font><sup></sup></td></tr><tr style="height: 12px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">United States</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 475.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 483.1</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,426.0</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,480.9</font><sup></sup></td></tr><tr style="height: 11px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">United Kingdom</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 23.5</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 24.4</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 71.1</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 73.3</font><sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Germany</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 7.3</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 9.2</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 24.4</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 28.2</font><sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Canada</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 10.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 9.3</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 27.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 27.2</font><sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Japan</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 9.8</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.2</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 24.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.7</font><sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Other international</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.5</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 18.3</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 15.0</font><sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Total international</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 56.5</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 48.6</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 166.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 144.4</font><sup></sup></td></tr><tr style="height: 18px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Total </font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 531.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 531.7</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,592.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,625.3</font><sup></sup></td></tr><tr style="height: 18px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:center;border-color:#000000;min-width:34px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">(a)</font></td><td colspan="13" style="width: 602px; text-align:left;border-color:#000000;min-width:602px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Revenues are attributed to countries based on the location of customers.</font><sup></sup></td></tr></table></div><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><p style='margin-top:12pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">Recent Accounting Standards </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Goodwill Impairment </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">In September 2011, new guidance was issued related to assessing goodwill impairment. Under the new guidance, a company is permitted to make a qualitative assessment of whether goodwill impairment exists before applying the two-step goodwill impairment test. If the conclusion from the qualitative assessment is that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the company would be required to conduct the current two-</font><font style="font-family:Times New Roman;font-size:10pt;">step goodwill impairment test. </font><font style="font-family:Times New Roman;font-size:10pt;">Otherwise, it would not need to apply the two-step test.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"> </font><font style="font-family:Times New Roman;font-size:10pt;">This new guidance became effective for the Company in January </font><font style="font-family:Times New Roman;font-size:10pt;">2012. Given the proximity of the</font><font style="font-family:Times New Roman;font-size:10pt;"> book value and fair value</font><font style="font-family:Times New Roman;font-size:10pt;"> of the Company's</font><font style="font-family:Times New Roman;font-size:10pt;"> sole repo</font><font style="font-family:Times New Roman;font-size:10pt;">rting unit as of the date of its</font><font style="font-family:Times New Roman;font-size:10pt;"> 2011 annual goodwill impairment test</font><font style="font-family:Times New Roman;font-size:10pt;">, this guidance </font><font style="font-family:Times New Roman;font-size:10pt;">is not expected to result </font><font style="font-family:Times New Roman;font-size:10pt;">in a material change to the way </font><font style="font-family:Times New Roman;font-size:10pt;">the Company</font><font style="font-family:Times New Roman;font-size:10pt;"> perform</font><font style="font-family:Times New Roman;font-size:10pt;">s</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">its</font><font style="font-family:Times New Roman;font-size:10pt;"> analysis for goodwill.</font></p>
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">Description of Business </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">For a description of the business of AOL Inc. (“AOL” or the “Company”), see “Note 1” to the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended </font><font style="font-family:Times New Roman;font-size:10pt;">December 31,</font><font style="font-family:Times New Roman;font-size:10pt;"> 2011 (the “Annual Report”).</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:12pt;"><></font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;">Basis of Presentation </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Basis of Consolidation </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">The consolidated financial statements include 100% of the assets, liabilities, revenues, expenses and cash flows of AOL</font><font style="font-family:Times New Roman;font-size:10pt;"> and</font><font style="font-family:Times New Roman;font-size:10pt;"> all voting interest entities in</font><font style="font-family:Times New Roman;font-size:10pt;"> which AOL has a controlling voting interest</font><font style="font-family:Times New Roman;font-size:10pt;"> (“subsidiaries</font><font style="font-family:Times New Roman;font-size:10pt;">”)</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">and variable interest entities in which AOL is the primary beneficiary</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">in</font><font style="font-family:Times New Roman;font-size:10pt;"> a</font><font style="font-family:Times New Roman;font-size:10pt;">ccordance with the consolidation</font><font style="font-family:Times New Roman;font-size:10pt;"> accounting guidance</font><font style="font-family:Times New Roman;font-size:10pt;">. Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation. </font><font style="font-family:Times New Roman;font-size:10pt;">The consolidated balances of the Company's </font><font style="font-family:Times New Roman;font-size:10pt;">variable</font><font style="font-family:Times New Roman;font-size:10pt;"> interest entities are not material to the Company's consolidated financial statements for the periods presented. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">The financial position and operat</font><font style="font-family:Times New Roman;font-size:10pt;">ing results of the majority of</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">AOL's </font><font style="font-family:Times New Roman;font-size:10pt;">foreign operations are consolidated using the local currency as the functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange during the period. Resulting translation gains or losses are included in the consolidated balance sheet as a component of accumulated other comprehensive income (loss), net. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Redeemable Noncontrolling Interest</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The noncontrolling interest in a joint venture between Mitsui & Company Ltd. (“Mitsui”) and AOL (“Ad.com Japan”) is classified outside of permanent equity in the Company's consolidated balance sheet as of September 30, 2012, due to a redemption right available to the noncontrolling interest holder in the future. The noncontrolling interest holder's right to redeem its stock is exercisable any time between July 1 and July 30 of any year, commencing with July 1, 2014. Net income in the consolidated statement of comprehensive income for the three and nine months ended September 30, 2012 reflects 100 percent of the results of Ad.com </font><font style="font-family:Times New Roman;font-size:10pt;">Japan</font><font style="font-family:Times New Roman;font-size:10pt;"> as the Company has a controlling interest in the entity. Net income is subsequently adjusted to exclude AOL's noncontrolling interests to arrive at net income attributable to AOL Inc. </font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Changes in Basis of Presentation</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The Company has</font><font style="font-family:Times New Roman;font-size:10pt;"> changed the classification of certain amounts within the accompanying consolidated statement of ca</font><font style="font-family:Times New Roman;font-size:10pt;">sh flows for the</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30,</font><font style="font-family:Times New Roman;font-size:10pt;"> 2011</font><font style="font-family:Times New Roman;font-size:10pt;">. The </font><font style="font-family:Times New Roman;font-size:10pt;">revisions</font><font style="font-family:Times New Roman;font-size:10pt;">,</font><font style="font-family:Times New Roman;font-size:10pt;"> related to </font><font style="font-family:Times New Roman;font-size:10pt;">accrued liabilities and capital expenditures</font><font style="font-family:Times New Roman;font-size:10pt;">,</font><font style="font-family:Times New Roman;font-size:10pt;"> do</font><font style="font-family:Times New Roman;font-size:10pt;"> not have a material impact on the </font><font style="font-family:Times New Roman;font-size:10pt;">consolidated </font><font style="font-family:Times New Roman;font-size:10pt;">statement of cash flows</font><font style="font-family:Times New Roman;font-size:10pt;">.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Use of Estimates </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">The preparation of the financial statements in conformity with </font><font style="font-family:Times New Roman;font-size:10pt;">U.S.</font><font style="font-family:Times New Roman;font-size:10pt;"> generally accept</font><font style="font-family:Times New Roman;font-size:10pt;">ed accounting principles (</font><font style="font-family:Times New Roman;font-size:10pt;">“</font><font style="font-family:Times New Roman;font-size:10pt;">GAAP</font><font style="font-family:Times New Roman;font-size:10pt;">”</font><font style="font-family:Times New Roman;font-size:10pt;">) requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and footnotes thereto. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the consolidated financial statement</font><font style="font-family:Times New Roman;font-size:10pt;">s include </font><font style="font-family:Times New Roman;font-size:10pt;">asset impairments, reserves established for doubtful accounts, equity-based compensation, depreciation and amortization, business combinations, income taxes, litigation matters and contingencies. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Interim Financial Statements </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">The interim consolidated financial statements are unaudited; however, in the opinion of management, they contain all the adjustments (consisting of those of a normal recurring nature) considered necessary to present fairly the financial position, the results of operations and cash flows for the periods presented in conformity with GAAP applicable to interim periods. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of AOL in the Annual Report.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p>
475200000
483100000
1426000000
1480900000
23500000
24400000
71100000
73300000
7300000
9200000
24400000
28200000
10700000
9300000
27700000
27200000
9800000
200000
24700000
700000
5200000
5500000
18300000
15000000
144400000
166200000
48600000
56500000
<div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 18px"><td colspan="14" style="width: 636px; text-align:left;border-color:#000000;min-width:636px;"><font style="FONT-WEIGHT: bold;FONT-STYLE: italic;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">Information about Geographical Areas</font><sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td colspan="13" style="width: 602px; text-align:left;border-color:#000000;min-width:602px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">Revenues in different geographical areas are as follows (in millions):</font><sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 16px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:center;border-color:#000000;min-width:12px;"> </td><td colspan="5" style="width: 199px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:199px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Three Months Ended September 30,</font><sup>(a)</sup></td><td style="width: 12px; text-align:center;border-color:#000000;min-width:12px;"> </td><td colspan="5" style="width: 199px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:199px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Nine Months Ended September 30,</font><sup>(a)</sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td colspan="2" style="width: 92px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:92px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td colspan="2" style="width: 92px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:92px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td colspan="2" style="width: 92px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:92px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td colspan="2" style="width: 92px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:92px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font><sup></sup></td></tr><tr style="height: 12px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">United States</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 475.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 483.1</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,426.0</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,480.9</font><sup></sup></td></tr><tr style="height: 11px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">United Kingdom</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 23.5</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 24.4</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 71.1</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 73.3</font><sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Germany</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 7.3</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 9.2</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 24.4</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 28.2</font><sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Canada</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 10.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 9.3</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 27.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 27.2</font><sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Japan</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 9.8</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.2</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 24.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.7</font><sup></sup></td></tr><tr style="height: 17px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Other international</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.5</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 18.3</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 15.0</font><sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Total international</font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 56.5</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 48.6</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 166.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 144.4</font><sup></sup></td></tr><tr style="height: 18px"><td colspan="2" style="width: 214px; text-align:left;border-color:#000000;min-width:214px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Total </font></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 531.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 531.7</font><sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,592.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:left;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">$</font></td><td style="width: 77px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:77px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,625.3</font><sup></sup></td></tr><tr style="height: 18px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 180px; text-align:left;border-color:#000000;min-width:180px;"> </td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td><td style="width: 12px; text-align:left;border-color:#000000;min-width:12px;"> </td><td style="width: 15px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:77px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 15px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 77px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:77px;"> <sup></sup></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:center;border-color:#000000;min-width:34px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">(a)</font></td><td colspan="13" style="width: 602px; text-align:left;border-color:#000000;min-width:602px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Revenues are attributed to countries based on the location of customers.</font><sup></sup></td></tr></table></div>
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE 2—INCOME</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;"> </font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">(LOSS) </font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">PER</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;"> COMMON SHARE </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">Basic income</font><font style="font-family:Times New Roman;font-size:10pt;"> (loss)</font><font style="font-family:Times New Roman;font-size:10pt;"> per common share is calculated by dividing net income</font><font style="font-family:Times New Roman;font-size:10pt;"> (loss)</font><font style="font-family:Times New Roman;font-size:10pt;"> attributable to AOL</font><font style="font-family:Times New Roman;font-size:10pt;"> Inc. common stockholders</font><font style="font-family:Times New Roman;font-size:10pt;"> by the weighted average number of shares of common stock outstanding during the reporting period. Diluted income</font><font style="font-family:Times New Roman;font-size:10pt;"> (loss)</font><font style="font-family:Times New Roman;font-size:10pt;"> per common share is calculated to give effect to all potentially dilutive common shares that </font><font style="font-family:Times New Roman;font-size:10pt;">were outstanding during the reporting period. The dilutive effect of outstanding equity-based compensation </font><font style="font-family:Times New Roman;font-size:10pt;">awards is reflected in diluted income</font><font style="font-family:Times New Roman;font-size:10pt;"> (loss)</font><font style="font-family:Times New Roman;font-size:10pt;"> per common share by application of the treasury stock method</font><font style="font-family:Times New Roman;font-size:10pt;">, only in periods in which such effect would have been dilutive</font><font style="font-family:Times New Roman;font-size:10pt;"> for the period</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">For the</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">three and nine months ended September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">, t</font><font style="font-family:Times New Roman;font-size:10pt;">he Company had </font><font style="font-family:Times New Roman;font-size:10pt;">1.0 </font><font style="font-family:Times New Roman;font-size:10pt;">million</font><font style="font-family:Times New Roman;font-size:10pt;"> and 5.1 million, respectively,</font><font style="font-family:Times New Roman;font-size:10pt;"> of weighted-average</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">potentially dilutive </font><font style="font-family:Times New Roman;font-size:10pt;">common shares </font><font style="font-family:Times New Roman;font-size:10pt;">that </font><font style="font-family:Times New Roman;font-size:10pt;">were not included in the computation of diluted earnings per share because to do so would be anti-dilutive for </font><font style="font-family:Times New Roman;font-size:10pt;">that </font><font style="font-family:Times New Roman;font-size:10pt;">period</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">For the three and nine months ended September 30, 2011, the Company had </font><font style="font-family:Times New Roman;font-size:10pt;">10.1</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">million</font><font style="font-family:Times New Roman;font-size:10pt;"> and 9.5</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;">, respectively,</font><font style="font-family:Times New Roman;font-size:10pt;"> of weighted-average potentially dilutive common shares that were not included in the computation of diluted earnings per share because to do so would be anti-dilutive for that </font><font style="font-family:Times New Roman;font-size:10pt;">period</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The following table is a reconciliation of basic and diluted </font><font style="font-family:Times New Roman;font-size:10pt;">net </font><font style="font-family:Times New Roman;font-size:10pt;">income</font><font style="font-family:Times New Roman;font-size:10pt;"> (loss)</font><font style="font-family:Times New Roman;font-size:10pt;"> attributable to AOL Inc. common stockholders</font><font style="font-family:Times New Roman;font-size:10pt;"> per common </font><font style="font-family:Times New Roman;font-size:10pt;">share</font><font style="font-family:Times New Roman;font-size:10pt;"> (in millions, except per share amounts):</font></p><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 33px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td colspan="5" style="width: 184px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:184px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Three Months Ended September 30,</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td colspan="5" style="width: 176px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:176px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Nine Months Ended September 30,</font></td></tr><tr style="height: 17px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td colspan="2" style="width: 84px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:84px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:16px;"> </td><td colspan="2" style="width: 84px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:84px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td colspan="2" style="width: 80px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:80px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 17px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:17px;"> </td><td colspan="2" style="width: 79px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:79px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td></tr><tr style="height: 13px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:68px;"> </td><td style="width: 16px; text-align:center;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:68px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:64px;"> </td><td style="width: 17px; text-align:center;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:63px;"> </td></tr><tr style="height: 35px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Net income (loss) attributable to AOL Inc.
common stockholders</font></td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 20.8</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (2.6)</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 64px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,012.7</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 63px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (9.7)</font></td></tr><tr style="height: 18px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:64px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:63px;"> </td></tr><tr style="height: 34px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Shares used in computing basic income (loss)
per common share</font></td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 92.6</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 106.2</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 93.6</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 106.7</font></td></tr><tr style="height: 17px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Dilutive effect of equity-based awards</font></td><td style="width: 16px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 3.4</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> -</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1.6</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> -</font></td></tr><tr style="height: 52px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Shares used in computing diluted income (loss)
per common share</font></td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 96.0</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 106.2</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 95.2</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 106.7</font></td></tr><tr style="height: 18px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:64px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:63px;"> </td></tr><tr style="height: 18px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Basic net income (loss) per common share</font></td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.22</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.02)</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 64px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 10.82</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 63px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.09)</font></td></tr><tr style="height: 19px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Diluted net income (loss) per common share </font></td><td style="width: 16px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.22</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.02)</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 64px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 10.64</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 63px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.09)</font></td></tr></table></div>
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">Basic income</font><font style="font-family:Times New Roman;font-size:10pt;"> (loss)</font><font style="font-family:Times New Roman;font-size:10pt;"> per common share is calculated by dividing net income</font><font style="font-family:Times New Roman;font-size:10pt;"> (loss)</font><font style="font-family:Times New Roman;font-size:10pt;"> attributable to AOL</font><font style="font-family:Times New Roman;font-size:10pt;"> Inc. common stockholders</font><font style="font-family:Times New Roman;font-size:10pt;"> by the weighted average number of shares of common stock outstanding during the reporting period. Diluted income</font><font style="font-family:Times New Roman;font-size:10pt;"> (loss)</font><font style="font-family:Times New Roman;font-size:10pt;"> per common share is calculated to give effect to all potentially dilutive common shares that </font><font style="font-family:Times New Roman;font-size:10pt;">were outstanding during the reporting period. The dilutive effect of outstanding equity-based compensation </font><font style="font-family:Times New Roman;font-size:10pt;">awards is reflected in diluted income</font><font style="font-family:Times New Roman;font-size:10pt;"> (loss)</font><font style="font-family:Times New Roman;font-size:10pt;"> per common share by application of the treasury stock method</font><font style="font-family:Times New Roman;font-size:10pt;">, only in periods in which such effect would have been dilutive</font><font style="font-family:Times New Roman;font-size:10pt;"> for the period</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'> </p>
3400000
1600000
<div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 33px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td colspan="5" style="width: 184px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:184px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Three Months Ended September 30,</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td colspan="5" style="width: 176px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:176px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Nine Months Ended September 30,</font></td></tr><tr style="height: 17px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td colspan="2" style="width: 84px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:84px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:16px;"> </td><td colspan="2" style="width: 84px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:84px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td colspan="2" style="width: 80px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:80px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 17px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:17px;"> </td><td colspan="2" style="width: 79px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:79px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td></tr><tr style="height: 13px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:68px;"> </td><td style="width: 16px; text-align:center;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:68px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:64px;"> </td><td style="width: 17px; text-align:center;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:63px;"> </td></tr><tr style="height: 35px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Net income (loss) attributable to AOL Inc.
common stockholders</font></td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 20.8</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (2.6)</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 64px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1,012.7</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 63px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (9.7)</font></td></tr><tr style="height: 18px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:64px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:63px;"> </td></tr><tr style="height: 34px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Shares used in computing basic income (loss)
per common share</font></td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 92.6</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 106.2</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 93.6</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 106.7</font></td></tr><tr style="height: 17px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Dilutive effect of equity-based awards</font></td><td style="width: 16px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 3.4</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> -</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1.6</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> -</font></td></tr><tr style="height: 52px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Shares used in computing diluted income (loss)
per common share</font></td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 96.0</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 106.2</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 95.2</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 106.7</font></td></tr><tr style="height: 18px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 68px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 64px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:64px;"> </td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 63px; border-top-style:double;border-top-width:3px;text-align:left;border-color:#000000;min-width:63px;"> </td></tr><tr style="height: 18px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Basic net income (loss) per common share</font></td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.22</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.02)</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 64px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 10.82</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 63px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.09)</font></td></tr><tr style="height: 19px"><td style="width: 262px; text-align:left;border-color:#000000;min-width:262px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Diluted net income (loss) per common share </font></td><td style="width: 16px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.22</font></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.02)</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 64px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:64px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 10.64</font></td><td style="width: 17px; text-align:left;border-color:#000000;min-width:17px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 63px; border-top-style:double;border-top-width:3px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:63px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.09)</font></td></tr></table></div>
0
0
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE 3—GOODWILL</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;"><></font></p><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 17px"><td style="width: 34px; text-align:right;border-color:#000000;min-width:34px;"> </td><td colspan="9" style="width: 573px; text-align:left;border-color:#000000;min-width:573px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">A summary of changes in the Company's goodwill during the nine months ended September 30, 2012</font></td></tr><tr style="height: 17px"><td colspan="10" style="width: 607px; text-align:left;border-color:#000000;min-width:607px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">is as follows (in millions):</font></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 229px; text-align:left;border-color:#000000;min-width:229px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:left;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:left;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; text-align:left;border-color:#000000;min-width:99px;"> </td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 229px; text-align:left;border-color:#000000;min-width:229px;"> </td><td colspan="2" style="width: 106px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:106px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Gross Goodwill </font></td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td colspan="2" style="width: 106px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:106px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Impairments</font></td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td colspan="2" style="width: 110px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:110px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Net Goodwill</font></td></tr><tr style="height: 8px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 229px; text-align:left;border-color:#000000;min-width:229px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; text-align:right;border-color:#000000;min-width:99px;"> </td></tr><tr style="height: 17px"><td colspan="2" style="width: 263px; text-align:left;border-color:#000000;min-width:263px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">December 31, 2011</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 36,689.1</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> (35,625.1)</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 99px; text-align:right;border-color:#000000;min-width:99px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 1,064.0</font></td></tr><tr style="height: 17px"><td colspan="2" style="width: 263px; text-align:left;border-color:#000000;min-width:263px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">Acquisitions</font></td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 18.7</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> -</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; text-align:right;border-color:#000000;min-width:99px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 18.7</font></td></tr><tr style="height: 17px"><td colspan="2" style="width: 263px; text-align:left;border-color:#000000;min-width:263px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">Translation adjustments</font></td><td style="width: 11px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> (6.2)</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> -</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:99px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> (6.2)</font></td></tr><tr style="height: 8px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 229px; text-align:left;border-color:#000000;min-width:229px;"> </td><td style="width: 11px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:99px;"> </td></tr><tr style="height: 18px"><td colspan="2" style="width: 263px; text-align:left;border-color:#000000;min-width:263px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">September 30, 2012</font></td><td style="width: 11px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 95px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 36,701.6</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 95px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> (35,625.1)</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 99px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:99px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 1,076.5</font></td></tr></table></div><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><p style='margin-top:12pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The increase in goodwill for the nine months ended September 30, 2012 was </font><font style="font-family:Times New Roman;font-size:10pt;">due </font><font style="font-family:Times New Roman;font-size:10pt;">primarily </font><font style="font-family:Times New Roman;font-size:10pt;">to acquisitions</font><font style="font-family:Times New Roman;font-size:10pt;">, </font><font style="font-family:Times New Roman;font-size:10pt;">including </font><font style="font-family:Times New Roman;font-size:10pt;">AOL's</font><font style="font-family:Times New Roman;font-size:10pt;"> purchase</font><font style="font-family:Times New Roman;font-size:10pt;"> of </font><font style="font-family:Times New Roman;font-size:10pt;">a controlling</font><font style="font-family:Times New Roman;font-size:10pt;"> interest in </font><font style="font-family:Times New Roman;font-size:10pt;">Ad.com Japan</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">See </font><font style="font-family:Times New Roman;font-size:10pt;">“</font><font style="font-family:Times New Roman;font-size:10pt;">Note 4” for</font><font style="font-family:Times New Roman;font-size:10pt;"> additional information on this acquisition</font><font style="font-family:Times New Roman;font-size:10pt;">.</font></p>
-35625100000
1064000000
18700000
36701600000
-35625100000
1076500000
36689100000
18700000
-6200000
-6200000
<div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 17px"><td style="width: 34px; text-align:right;border-color:#000000;min-width:34px;"> </td><td colspan="9" style="width: 573px; text-align:left;border-color:#000000;min-width:573px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">A summary of changes in the Company's goodwill during the nine months ended September 30, 2012</font></td></tr><tr style="height: 17px"><td colspan="10" style="width: 607px; text-align:left;border-color:#000000;min-width:607px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">is as follows (in millions):</font></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 229px; text-align:left;border-color:#000000;min-width:229px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:left;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:left;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; text-align:left;border-color:#000000;min-width:99px;"> </td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 229px; text-align:left;border-color:#000000;min-width:229px;"> </td><td colspan="2" style="width: 106px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:106px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Gross Goodwill </font></td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td colspan="2" style="width: 106px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:106px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Impairments</font></td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td colspan="2" style="width: 110px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:110px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Net Goodwill</font></td></tr><tr style="height: 8px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 229px; text-align:left;border-color:#000000;min-width:229px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; text-align:right;border-color:#000000;min-width:99px;"> </td></tr><tr style="height: 17px"><td colspan="2" style="width: 263px; text-align:left;border-color:#000000;min-width:263px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">December 31, 2011</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 36,689.1</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> (35,625.1)</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 99px; text-align:right;border-color:#000000;min-width:99px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 1,064.0</font></td></tr><tr style="height: 17px"><td colspan="2" style="width: 263px; text-align:left;border-color:#000000;min-width:263px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">Acquisitions</font></td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 18.7</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> -</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; text-align:right;border-color:#000000;min-width:99px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 18.7</font></td></tr><tr style="height: 17px"><td colspan="2" style="width: 263px; text-align:left;border-color:#000000;min-width:263px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">Translation adjustments</font></td><td style="width: 11px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> (6.2)</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> -</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:99px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> (6.2)</font></td></tr><tr style="height: 8px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 229px; text-align:left;border-color:#000000;min-width:229px;"> </td><td style="width: 11px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 95px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:95px;"> </td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 99px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:99px;"> </td></tr><tr style="height: 18px"><td colspan="2" style="width: 263px; text-align:left;border-color:#000000;min-width:263px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: left;">September 30, 2012</font></td><td style="width: 11px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 95px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 36,701.6</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 95px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:95px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> (35,625.1)</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 11px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:11px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 99px; border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:99px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;"> 1,076.5</font></td></tr></table></div>
0
0
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE 4—BUSINESS ACQUISITIONS, DISPOSITIONS </font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">AND</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;"> OTHER SIGNIFICANT TRANSACTIONS </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;margin-left:0px;">Ad.com </font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Japan</font><font style="font-family:Times New Roman;font-size:10pt;">       </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">On February </font><font style="font-family:Times New Roman;font-size:10pt;">9</font><font style="font-family:Times New Roman;font-size:10pt;">, 2012, AOL entered into a share-purchase agreement with Mitsui to purchase an additional </font><font style="font-family:Times New Roman;font-size:10pt;">3%</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">interest in</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">Ad.</font><font style="font-family:Times New Roman;font-size:10pt;">com </font><font style="font-family:Times New Roman;font-size:10pt;">Japan</font><font style="font-family:Times New Roman;font-size:12pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">for approximately </font><font style="font-family:Times New Roman;font-size:10pt;">$1.2 </font><font style="font-family:Times New Roman;font-size:10pt;">million. Ad.com </font><font style="font-family:Times New Roman;font-size:10pt;">Japan</font><font style="font-family:Times New Roman;font-size:10pt;">, which operates a display advertising network business in </font><font style="font-family:Times New Roman;font-size:10pt;">Japan</font><font style="font-family:Times New Roman;font-size:10pt;">, was formed in 2006. Prior to the execution of the share purchase agreement, AOL and Mitsui each owned </font><font style="font-family:Times New Roman;font-size:10pt;">a </font><font style="font-family:Times New Roman;font-size:10pt;">50% </font><font style="font-family:Times New Roman;font-size:10pt;">interest in </font><font style="font-family:Times New Roman;font-size:10pt;">Ad.com </font><font style="font-family:Times New Roman;font-size:10pt;">Japan</font><font style="font-family:Times New Roman;font-size:10pt;">, and AOL accounted for its </font><font style="font-family:Times New Roman;font-size:10pt;">50%</font><font style="font-family:Times New Roman;font-size:10pt;"> interest using the equity method of accounting. As part of this transaction, AOL obtained control of the board and of the day-to-day operations of </font><font style="font-family:Times New Roman;font-size:10pt;">Ad.com </font><font style="font-family:Times New Roman;font-size:10pt;">Japan</font><font style="font-family:Times New Roman;font-size:10pt;">. AOL has accounted for the incremental </font><font style="font-family:Times New Roman;font-size:10pt;">3%</font><font style="font-family:Times New Roman;font-size:10pt;"> share purchase as a business</font><font style="font-family:Times New Roman;font-size:10pt;"> combination achieved in stages (“step acquisition”) and consolidated </font><font style="font-family:Times New Roman;font-size:10pt;">Ad.com Japan</font><font style="font-family:Times New Roman;font-size:10pt;"> beginning on February 9, 2012</font><font style="font-family:Times New Roman;font-size:10pt;"> (“the closing date”)</font><font style="font-family:Times New Roman;font-size:10pt;">. </font></p><p style='margin-top:5pt; margin-bottom:5pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:27px;">Under the accounting guidance for step acquisitions, AOL is required to record</font><font style="font-family:Times New Roman;font-size:10pt;"> all assets acquired, liabilities assumed, </font><font style="font-family:Times New Roman;font-size:10pt;">and Mitsui's non</font><font style="font-family:Times New Roman;font-size:10pt;">controlling interests at fair value, and recognize the entire goodwill of the acquired business. </font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">The step acquisition guidelines also require that AOL </font><font style="font-family:Times New Roman;font-size:10pt;">remeasure its pre</font><font style="font-family:Times New Roman;font-size:10pt;">existing investment </font><font style="font-family:Times New Roman;font-size:10pt;">in Ad.com </font><font style="font-family:Times New Roman;font-size:10pt;">Japan</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">at fair value, and </font><font style="font-family:Times New Roman;font-size:10pt;">recognize any gains or losses </font><font style="font-family:Times New Roman;font-size:10pt;">from such remeasurement</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">The fair value of AOL</font><font style="font-family:Times New Roman;font-size:10pt;">'s interest immedia</font><font style="font-family:Times New Roman;font-size:10pt;">tely before the closing</font><font style="font-family:Times New Roman;font-size:10pt;"> date was </font><font style="font-family:Times New Roman;font-size:10pt;">$15.4</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;">,</font><font style="font-family:Times New Roman;font-size:10pt;"> which resulted in the Company recognizing a </font><font style="font-family:Times New Roman;font-size:10pt;">non</font><font style="font-family:Times New Roman;font-size:10pt;">-</font><font style="font-family:Times New Roman;font-size:10pt;">cash gain of approximately </font><font style="font-family:Times New Roman;font-size:10pt;">$10.8</font><font style="font-family:Times New Roman;font-size:10pt;"> million </font><font style="font-family:Times New Roman;font-size:10pt;">within other income (loss), net on the consolidated statement of comprehensive income </font><font style="font-family:Times New Roman;font-size:10pt;">in the first quarter of 2012.</font><font style="font-family:Times New Roman;font-size:10pt;"> The Company used a combination of the market based approach (guideline public company) and an income approach (discounted cash flow analysis), both of which represent level 3 fair value measurements, to measure</font><font style="font-family:Times New Roman;font-size:10pt;"> both </font><font style="font-family:Times New Roman;font-size:10pt;">the fair value of AOL's pre</font><font style="font-family:Times New Roman;font-size:10pt;">existing investment</font><font style="font-family:Times New Roman;font-size:10pt;"> and the fair value of Mitsui's noncontrolling int</font><font style="font-family:Times New Roman;font-size:10pt;">erest</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">As Mitsui has a right to put its interest to AOL </font><font style="font-family:Times New Roman;font-size:10pt;">based on a pre-established and determinable price </font><font style="font-family:Times New Roman;font-size:10pt;">in the future, the noncontrolling interest is presented as redeemable noncontrolling interest</font><font style="font-family:Times New Roman;font-size:10pt;"> outside </font><font style="font-family:Times New Roman;font-size:10pt;">permanent equity</font><font style="font-family:Times New Roman;font-size:10pt;"> in the Company's </font><font style="font-family:Times New Roman;font-size:10pt;">consolidated </font><font style="font-family:Times New Roman;font-size:10pt;">balance sheet.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">The noncontrolling interest holder's right to redeem its stock is exercisable any time between July 1 and July 30 of any year, commencing with July 1, 2014. The amount payable from AOL to Mitsui if Mitsui were to exercise its redemption right is determined by taking the sum of ¥2</font><font style="font-family:Times New Roman;font-size:10pt;">,000,000,000 (approximately </font><font style="font-family:Times New Roman;font-size:10pt;">$26.0 million</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">as of </font><font style="font-family:Times New Roman;font-size:10pt;">the closing date</font><font style="font-family:Times New Roman;font-size:10pt;">) plus any </font><font style="font-family:Times New Roman;font-size:10pt;">incremental </font><font style="font-family:Times New Roman;font-size:10pt;">cash over the </font><font style="font-family:Times New Roman;font-size:10pt;">$7.8 million</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">cash balance at December 31, 20</font><font style="font-family:Times New Roman;font-size:10pt;">1</font><font style="font-family:Times New Roman;font-size:10pt;">1</font><font style="font-family:Times New Roman;font-size:10pt;">, and multiplying that total by Mitsui's </font><font style="font-family:Times New Roman;font-size:10pt;">percentage </font><font style="font-family:Times New Roman;font-size:10pt;">ownership of</font><font style="font-family:Times New Roman;font-size:10pt;"> Ad.com Japan (</font><font style="font-family:Times New Roman;font-size:10pt;">47%</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">at closing).</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">The Company has elected to recognize changes in the</font><font style="font-family:Times New Roman;font-size:10pt;"> redemption value as they occur; </font><font style="font-family:Times New Roman;font-size:10pt;">however, this has no impact on the carrying value of Mitsui's interest in Ad.com </font><font style="font-family:Times New Roman;font-size:10pt;">Japan</font><font style="font-family:Times New Roman;font-size:10pt;"> because it exceeds the current redemption value. </font><font style="font-family:Times New Roman;font-size:10pt;">As of </font><font style="font-family:Times New Roman;font-size:10pt;">September</font><font style="font-family:Times New Roman;font-size:10pt;"> 30</font><font style="font-family:Times New Roman;font-size:10pt;">, 2012 </font><font style="font-family:Times New Roman;font-size:10pt;">the</font><font style="font-family:Times New Roman;font-size:10pt;"> undiscounted</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">redemption</font><font style="font-family:Times New Roman;font-size:10pt;"> value of the put option held by Mitsui </font><font style="font-family:Times New Roman;font-size:10pt;">was calculated to be</font><font style="font-family:Times New Roman;font-size:10pt;"> approximately </font><font style="font-family:Times New Roman;font-size:10pt;">$12.3</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;">, which is below </font><font style="font-family:Times New Roman;font-size:10pt;">the </font><font style="font-family:Times New Roman;font-size:10pt;">$14.1 </font><font style="font-family:Times New Roman;font-size:10pt;">million c</font><font style="font-family:Times New Roman;font-size:10pt;">arrying value of Mitsui'</font><font style="font-family:Times New Roman;font-size:10pt;">s interest in Ad.com Japan</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">AOL </font><font style="font-family:Times New Roman;font-size:10pt;">recorded </font><font style="font-family:Times New Roman;font-size:10pt;">$9.7</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">million of goodwill (which is not d</font><font style="font-family:Times New Roman;font-size:10pt;">educti</font><font style="font-family:Times New Roman;font-size:10pt;">ble for tax purposes) and </font><font style="font-family:Times New Roman;font-size:10pt;">$19.2</font><font style="font-family:Times New Roman;font-size:10pt;"> million of intangible assets associated with this acquisition. </font><font style="font-family:Times New Roman;font-size:10pt;">The intangible assets associated with this acquisition consist primarily of</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">trade names</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">to be amortized on a straigh</font><font style="font-family:Times New Roman;font-size:10pt;">t-line basis over a period of ten</font><font style="font-family:Times New Roman;font-size:10pt;"> years</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">and advertis</font><font style="font-family:Times New Roman;font-size:10pt;">er relationships to be</font><font style="font-family:Times New Roman;font-size:10pt;"> amortized </font><font style="font-family:Times New Roman;font-size:10pt;">ov</font><font style="font-family:Times New Roman;font-size:10pt;">er a period of five</font><font style="font-family:Times New Roman;font-size:10pt;"> years. </font><font style="font-family:Times New Roman;font-size:10pt;">The fair value of th</font><font style="font-family:Times New Roman;font-size:10pt;">e significant</font><font style="font-family:Times New Roman;font-size:10pt;"> identified intangible assets was estimated by </font><font style="font-family:Times New Roman;font-size:10pt;">using relief from royalty, cost savings and multi-period excess earnings valuation methodologies, </font><font style="font-family:Times New Roman;font-size:10pt;">which represent level 3 fair value measurements. </font><font style="font-family:Times New Roman;font-size:10pt;">Inputs used in the methodologies primarily included projected future cash flows, discounted at a rate commensurate with the risk involved.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">Unaudited pro forma resu</font><font style="font-family:Times New Roman;font-size:10pt;">lts of operations assuming this acquisition</font><font style="font-family:Times New Roman;font-size:10pt;"> had taken place at the beginning of each period are not provided because the historical operating r</font><font style="font-family:Times New Roman;font-size:10pt;">esults of the acquired company</font><font style="font-family:Times New Roman;font-size:10pt;"> were not significant and pro forma results would not be significantly different from reported res</font><font style="font-family:Times New Roman;font-size:10pt;">ults for the periods presented.</font></p><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><p style='margin-top:12pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;margin-left:0px;">Patent Portfolio </font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;">Sale</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;font-style:italic;"> and License</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">On June 15, 2012, the Compan</font><font style="font-family:Times New Roman;font-size:10pt;">y sold approximately 800 patents</font><font style="font-family:Times New Roman;font-size:10pt;"> and their related patent applications (the “Sold Patents”) to Microsoft</font><font style="font-family:Times New Roman;font-size:10pt;"> Corporation</font><font style="font-family:Times New Roman;font-size:10pt;">, a Washington corporation</font><font style="font-family:Times New Roman;font-size:10pt;"> (“Microsoft”)</font><font style="font-family:Times New Roman;font-size:10pt;">, and granted Microsoft a non-exclusive license to the Company's retained patent portfolio, f</font><font style="font-family:Times New Roman;font-size:10pt;">or aggregate proceeds of $1,056</font><font style="font-family:Times New Roman;font-size:10pt;"> million in cash (excluding transaction costs). The transaction was structured as a </font><font style="font-family:Times New Roman;font-size:10pt;">sale </font><font style="font-family:Times New Roman;font-size:10pt;">of all of the outstanding shares of a wholly owned non-operating subsidiary and the direct </font><font style="font-family:Times New Roman;font-size:10pt;">sale</font><font style="font-family:Times New Roman;font-size:10pt;"> of certain other patents not held by the subsidiary. </font><font style="font-family:Times New Roman;font-size:10pt;">The Company concluded that immediate recognition of all of the proceeds was appropriate as the Company has no ongoing performance obligations with respect to the sold or licensed patents.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The disposed ass</font><font style="font-family:Times New Roman;font-size:10pt;">ets had a carrying value of $3.6</font><font style="font-family:Times New Roman;font-size:10pt;"> million on the Company's balance sheet and accordingly, the Company recorded a gain on the dispositi</font><font style="font-family:Times New Roman;font-size:10pt;">on of the Sold Patents of $946.1</font><font style="font-family:Times New Roman;font-size:10pt;"> 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 pat</font><font style="font-family:Times New Roman;font-size:10pt;">ent portfolio of $96.0</font><font style="font-family:Times New Roman;font-size:10pt;"> million during</font><font style="font-family:Times New Roman;font-size:10pt;"> the three months ended June 30, 2012.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">Based on the anticipated utilization of existing deferred tax assets</font><font style="font-family:Times New Roman;font-size:10pt;"> and the fact that the disposition of the Sold Patents generated a capital loss</font><font style="font-family:Times New Roman;font-size:10pt;"> (which is subject to a full valuation allowance)</font><font style="font-family:Times New Roman;font-size:10pt;">, </font><font style="font-family:Times New Roman;font-size:10pt;">the Company does not expect the</font><font style="font-family:Times New Roman;font-size:12pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">$1,056 </font><font style="font-family:Times New Roman;font-size:10pt;">m</font><font style="font-family:Times New Roman;font-size:10pt;">illion </font><font style="font-family:Times New Roman;font-size:10pt;">in </font><font style="font-family:Times New Roman;font-size:10pt;">proceeds to result in material cash taxes</font><font style="font-family:Times New Roman;font-size:10pt;">. </font></p><p style='margin-top:0pt; margin-bottom:0pt'> </p>
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE 5—INCOME TAXES</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The Company</font><font style="font-family:Times New Roman;font-size:10pt;"> recorded</font><font style="font-family:Times New Roman;font-size:10pt;"> pre-tax income from operations of </font><font style="font-family:Times New Roman;font-size:10pt;">$45.1</font><font style="font-family:Times New Roman;font-size:10pt;"> million and related income tax expense of </font><font style="font-family:Times New Roman;font-size:10pt;">$24.4</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;">, which </font><font style="font-family:Times New Roman;font-size:10pt;">resulted in an effective tax rate of </font><font style="font-family:Times New Roman;font-size:10pt;">54.1% </font><font style="font-family:Times New Roman;font-size:10pt;">for the </font><font style="font-family:Times New Roman;font-size:10pt;">three months ended September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">, as compared to a</font><font style="font-family:Times New Roman;font-size:10pt;">n</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">effective tax rate of </font><font style="font-family:Times New Roman;font-size:10pt;">136.6%</font><font style="font-family:Times New Roman;font-size:10pt;"> for the </font><font style="font-family:Times New Roman;font-size:10pt;">three months ended September 30, 2011</font><font style="font-family:Times New Roman;font-size:10pt;">. The effective tax rate for the </font><font style="font-family:Times New Roman;font-size:10pt;">three months ended September 30, 2011</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">and </font><font style="font-family:Times New Roman;font-size:10pt;">the </font><font style="font-family:Times New Roman;font-size:10pt;">three months ended September 30, </font><font style="font-family:Times New Roman;font-size:10pt;">2012</font><font style="font-family:Times New Roman;font-size:10pt;"> differed substantially from the statutory U.S. federal income tax rate of 35.0% primarily due to</font><font style="font-family:Times New Roman;font-size:10pt;"> foreign losses</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">that did not produce a tax benefit.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The Company</font><font style="font-family:Times New Roman;font-size:10pt;"> recorded</font><font style="font-family:Times New Roman;font-size:10pt;"> pre-tax</font><font style="font-family:Times New Roman;font-size:10pt;"> income fro</font><font style="font-family:Times New Roman;font-size:10pt;">m operations</font><font style="font-family:Times New Roman;font-size:10pt;"> of </font><font style="font-family:Times New Roman;font-size:10pt;">$1,143.0 </font><font style="font-family:Times New Roman;font-size:10pt;">million and related income tax expense of </font><font style="font-family:Times New Roman;font-size:10pt;">$130.7</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;">, which</font><font style="font-family:Times New Roman;font-size:10pt;"> resulted in an effective tax rate of </font><font style="font-family:Times New Roman;font-size:10pt;">11.4%</font><font style="font-family:Times New Roman;font-size:10pt;"> for the </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">, as compared to the effective tax rate of </font><font style="font-family:Times New Roman;font-size:10pt;">16.4%</font><font style="font-family:Times New Roman;font-size:10pt;"> for the </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30, 2011</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> The effective tax rate for the </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30, 2012 </font><font style="font-family:Times New Roman;font-size:10pt;">differed </font><font style="font-family:Times New Roman;font-size:10pt;">substantially </font><font style="font-family:Times New Roman;font-size:10pt;">from the statutory U.S. federal income tax rate of 35.0% </font><font style="font-family:Times New Roman;font-size:10pt;">primarily </font><font style="font-family:Times New Roman;font-size:10pt;">due to </font><font style="font-family:Times New Roman;font-size:10pt;">the </font><font style="font-family:Times New Roman;font-size:10pt;">tax impact of the patent transaction with Microsoft</font><font style="font-family:Times New Roman;font-size:10pt;"> during the second quarter of 2012</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">No m</font><font style="font-family:Times New Roman;font-size:10pt;">aterial cash taxes will be paid on the patent transaction</font><font style="font-family:Times New Roman;font-size:10pt;"> due to existing net operating losses which offset substantially all of the ordinary income</font><font style="font-family:Times New Roman;font-size:10pt;"> generated by the patent transaction</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">However, for book</font><font style="font-family:Times New Roman;font-size:10pt;"> purposes, this transaction resul</font><font style="font-family:Times New Roman;font-size:10pt;">ted in income tax expense of $71.2 </font><font style="font-family:Times New Roman;font-size:10pt;">million. </font><font style="font-family:Times New Roman;font-size:10pt;">The patent transaction consisted of two elements:  first, the sale of patents and the stock of a subsidiary, and second, the licensing of AOL's retained patent portfolio, resulting in pre-tax income of $1,042.1 million</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">The tax expense relates primarily to ordinary income realized on the transaction, the majority of which is due to the licensing portion. In addition, the transaction created a significant capital loss due</font><font style="font-family:Times New Roman;font-size:10pt;"> to the tax basis in the disposed subsidiary. The Company does not believe it is currently more likely than not that this capital loss will be realized, and accordingly, has recorded a full valuation allowance on the capital loss generated by the patent transaction.</font><font style="font-family:Times New Roman;font-size:10pt;"> In addition</font><font style="font-family:Times New Roman;font-size:10pt;"> the effect of the patent transaction on income tax expense</font><font style="font-family:Times New Roman;font-size:10pt;">, the Company</font><font style="font-family:Times New Roman;font-size:10pt;"> also had foreign losses that</font><font style="font-family:Times New Roman;font-size:10pt;"> did not produce a tax benefit.</font><font style="font-family:Times New Roman;font-size:10pt;"> The effective tax rate for</font><font style="font-family:Times New Roman;font-size:10pt;"> the</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30, 2011</font><font style="font-family:Times New Roman;font-size:10pt;"> differed from the statutory U.S. federal inc</font><font style="font-family:Times New Roman;font-size:10pt;">ome tax rate of 35.0% </font><font style="font-family:Times New Roman;font-size:10pt;">due to</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">income tax benefits related to a </font><font style="font-family:Times New Roman;font-size:10pt;">worthless stock deduction and escrow disbursements from prior acquisitions</font><font style="font-family:Times New Roman;font-size:10pt;">, partially</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">offset by foreign losses that did not produce a tax benefit.</font></p>
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE 6—STOCKHOLDERS' EQUITY </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">AOL is authorized to issue up to </font><font style="font-family:Times New Roman;font-size:10pt;">660.0</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">million shares of all classes of stock, consisting of </font><font style="font-family:Times New Roman;font-size:10pt;">60.0</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">mi</font><font style="font-family:Times New Roman;font-size:10pt;">llion shares of preferred stock, par value </font><font style="font-family:Times New Roman;font-size:10pt;">$0.01</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">per share (“Preferred Stock”), and </font><font style="font-family:Times New Roman;font-size:10pt;">600.0</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">million shares of common stock, par value </font><font style="font-family:Times New Roman;font-size:10pt;">$0.01</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">per share.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">In August 2012, </font><font style="font-family:inherit;font-size:10pt;">in connection with the Tax Asset Protection Plan discussed further below, </font><font style="font-family:inherit;font-size:10pt;">AOL filed a Certificate of Designation to its Amended and Restated Certificate of Incorporation creating a series of</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">approximately </font><font style="font-family:inherit;font-size:10pt;">0.1</font><font style="font-family:inherit;font-size:10pt;"> </font><font style="font-family:inherit;font-size:10pt;">million </font><font style="font-family:inherit;font-size:10pt;">shares of Preferred Stock designated as Series A Junior Participating Preferred Stock, </font><font style="font-family:inherit;font-size:10pt;">par value $0.01</font><font style="font-family:inherit;font-size:10pt;"> per share (the “Series A Preferred Stock”). The Series A Preferred Stock has the voting and such other rights as provided for in the Certificate of Designation.</font><font style="font-family:Times New Roman;font-size:10pt;"> Rights and privileges associated with shares of Preferred Stock are subject to authorization by the Company's Board of Directors and may differ from those of any and all other series at any time outstanding. All shares of common stock will be identical and will entitle the holders thereof to the same rights and privileges.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">As of September 30, 2012, </font><font style="font-family:Times New Roman;font-size:10pt;">109.2</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">million </font><font style="font-family:Times New Roman;font-size:10pt;">shares of common stock were issued</font><font style="font-family:Times New Roman;font-size:10pt;"> and </font><font style="font-family:Times New Roman;font-size:10pt;">90.1</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">million </font><font style="font-family:Times New Roman;font-size:10pt;">shares of c</font><font style="font-family:Times New Roman;font-size:10pt;">ommon stock were outstand</font><font style="font-family:Times New Roman;font-size:10pt;">ing. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">Durin</font><font style="font-family:Times New Roman;font-size:10pt;">g the </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30,</font><font style="font-family:Times New Roman;font-size:10pt;"> 2011</font><font style="font-family:Times New Roman;font-size:10pt;">, the Company</font><font style="font-family:Times New Roman;font-size:10pt;"> recorded $39.0</font><font style="font-family:Times New Roman;font-size:10pt;"> million of equity-based compensation that resulted in an increase in additional paid-in capital. Included in this amount was</font><font style="font-family:Times New Roman;font-size:10pt;"> $31.7</font><font style="font-family:Times New Roman;font-size:10pt;"> million related to </font><font style="font-family:Times New Roman;font-size:10pt;">expense incurred under </font><font style="font-family:Times New Roman;font-size:10pt;">AOL's equity-based compensation plan, </font><font style="font-family:Times New Roman;font-size:10pt;">$3.6</font><font style="font-family:Times New Roman;font-size:10pt;"> million related to the fair value of unvested </font><font style="font-family:Times New Roman;font-size:10pt;">Huffington Post </font><font style="font-family:Times New Roman;font-size:10pt;">Plan options held by The Huffington Post employees that were converted into AOL stock options and related to pre-comb</font><font style="font-family:Times New Roman;font-size:10pt;">ination service, as well as $4.0</font><font style="font-family:Times New Roman;font-size:10pt;"> million related to the accelerated vesting of stock options related to terminated employees</font><font style="font-family:Times New Roman;font-size:10pt;">.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;">Stock Repurchase Program</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">On August 10, 2011, the Company's Board of Directors approved a stock repu</font><font style="font-family:Times New Roman;font-size:10pt;">rchase program, which authorized</font><font style="font-family:Times New Roman;font-size:10pt;"> the Company to repurchase up to $250.0 million of its outstanding shares of common stock from time to time thro</font><font style="font-family:Times New Roman;font-size:10pt;">ugh August 2012. Repurchases were</font><font style="font-family:Times New Roman;font-size:10pt;"> subject to market conditions, share price and other factors. R</font><font style="font-family:Times New Roman;font-size:10pt;">epurchases were</font><font style="font-family:Times New Roman;font-size:10pt;"> made in accordance with applicable securities laws in the open market or in private transactions and may include derivative transactions, or pursuant to any trading plan adopted in accordance with Rule 10b5-1 of the Securities and Exchange Commission.</font><font style="font-family:Times New Roman;font-size:10pt;"> For </font><font style="font-family:Times New Roman;font-size:10pt;">the </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30,</font><font style="font-family:Times New Roman;font-size:10pt;"> 2012</font><font style="font-family:Times New Roman;font-size:10pt;">, the Company </font><font style="font-family:Times New Roman;font-size:10pt;">paid </font><font style="font-family:Times New Roman;font-size:10pt;">$35.8</font><font style="font-family:Times New Roman;font-size:10pt;"> million to repurchase </font><font style="font-family:Times New Roman;font-size:10pt;">2.1 million</font><font style="font-family:Times New Roman;font-size:10pt;"> shares at a weighted average price </font><font style="font-family:Times New Roman;font-size:10pt;">of $17.29 per</font><font style="font-family:Times New Roman;font-size:10pt;"> share as part of this program. </font><font style="font-family:Times New Roman;font-size:10pt;">From </font><font style="font-family:Times New Roman;font-size:10pt;">the inception of the program through </font><font style="font-family:Times New Roman;font-size:10pt;">September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">, the Company repurchased</font><font style="font-family:Times New Roman;font-size:10pt;"> a total of</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">14.8</font><font style="font-family:Times New Roman;font-size:10pt;"> million shares at a weighted average price of</font><font style="font-family:Times New Roman;font-size:10pt;"> $14.11</font><font style="font-family:Times New Roman;font-size:10pt;"> per share as part of this program</font><font style="font-family:Times New Roman;font-size:10pt;">, for total</font><font style="font-family:Times New Roman;font-size:10pt;"> consideration </font><font style="font-family:Times New Roman;font-size:10pt;">of</font><font style="font-family:Times New Roman;font-size:10pt;"> $209.4</font><font style="font-family:Times New Roman;font-size:10pt;"> mi</font><font style="font-family:Times New Roman;font-size:10pt;">llion</font><font style="font-family:Times New Roman;font-size:10pt;">. Shares repurc</font><font style="font-family:Times New Roman;font-size:10pt;">hased under the program were</font><font style="font-family:Times New Roman;font-size:10pt;"> recorded as treasury stock on the Company's consolidated balance sheet</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">The shares repurc</font><font style="font-family:Times New Roman;font-size:10pt;">hased </font><font style="font-family:Times New Roman;font-size:10pt;">under this program </font><font style="font-family:Times New Roman;font-size:10pt;">during the </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30,</font><font style="font-family:Times New Roman;font-size:10pt;"> 2012</font><font style="font-family:Times New Roman;font-size:10pt;"> were not the result of an accelerated share repurchase agreement and did not result in any derivative transactions. Management has not made a decision on whether shares purchased under this program will be retired or reissued</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">The Company's Board of Directors re-authorized the purchase of the remaining shares under this program to be purchased as part of the </font><font style="font-family:Times New Roman;font-size:10pt;">accelerated stock repurchase </font><font style="font-family:Times New Roman;font-size:10pt;">a</font><font style="font-family:Times New Roman;font-size:10pt;">greement en</font><font style="font-family:Times New Roman;font-size:10pt;">tered into on August 26, </font><font style="font-family:Times New Roman;font-size:10pt;">2012 as defined below</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;">Dutch Auction Tender Offer</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">On June 28, 2012, AOL</font><font style="font-family:Times New Roman;font-size:10pt;"> announced</font><font style="font-family:Times New Roman;font-size:10pt;"> a $400.0</font><font style="font-family:Times New Roman;font-size:10pt;"> million modified Dutch auction tender offer.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">The tender offer began on the date of the announcement, June 28, 2012, and expired on August 2, 2012.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">Through the Dutch tender off</font><font style="font-family:Times New Roman;font-size:10pt;">er, AOL's shareholders had</font><font style="font-family:Times New Roman;font-size:10pt;"> the opportunity to tender some or all of their shares at a price within the range </font><font style="font-family:Times New Roman;font-size:10pt;">of $27.00 to $30.00 per</font><font style="font-family:Times New Roman;font-size:10pt;"> share. </font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">Upon expiration, a</font><font style="font-family:Times New Roman;font-size:10pt;">pproximately 0.3</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">million </font><font style="font-family:Times New Roman;font-size:10pt;">shares </font><font style="font-family:Times New Roman;font-size:10pt;">were </font><font style="font-family:Times New Roman;font-size:10pt;">tendered</font><font style="font-family:Times New Roman;font-size:10pt;"> through the offer</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">at </font><font style="font-family:Times New Roman;font-size:10pt;">a final purchase price of </font><font style="font-family:Times New Roman;font-size:10pt;">$30.00</font><font style="font-family:Times New Roman;font-size:10pt;"> per share, </font><font style="font-family:Times New Roman;font-size:10pt;">f</font><font style="font-family:Times New Roman;font-size:10pt;">or a total purchase price</font><font style="font-family:Times New Roman;font-size:10pt;"> of</font><font style="font-family:Times New Roman;font-size:10pt;"> approximately</font><font style="font-family:Times New Roman;font-size:10pt;"> $8.8</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">We accounted for the </font><font style="font-family:Times New Roman;font-size:10pt;">r</font><font style="font-family:Times New Roman;font-size:10pt;">epurchase of these shares </font><font style="font-family:Times New Roman;font-size:10pt;">as treasury stock on the Company's consolidated balance sheet</font><font style="font-family:Times New Roman;font-size:10pt;"> during the third quarter of 2012</font><font style="font-family:Times New Roman;font-size:10pt;">. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;">Accelerated Stock Repurchase</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;"> Agreement</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">On August 26, 2012, </font><font style="font-family:Times New Roman;font-size:10pt;">the Company entered into a fixed dollar collared accelerated stock repurchase agreement with Barclays Capital Inc. (“Barclays”), as agent for Barclays Bank PLC, effective August 27, 2012 (the “ASR Agreement”). Under the ASR Agreement, </font><font style="font-family:Times New Roman;font-size:10pt;">on August 30, 2012, AOL paid</font><font style="font-family:Times New Roman;font-size:10pt;"> $654.1</font><font style="font-family:Times New Roman;font-size:10pt;"> million from cash on hand to Barclays to re</font><font style="font-family:Times New Roman;font-size:10pt;">purchase outstanding shares of</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">common stock</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> The consideration paid to Barclays</font><font style="font-family:Times New Roman;font-size:10pt;"> to repurchase shares</font><font style="font-family:Times New Roman;font-size:10pt;"> included $54.1 million </font><font style="font-family:Times New Roman;font-size:10pt;">in contemplation of the special</font><font style="font-family:Times New Roman;font-size:10pt;"> cash dividend</font><font style="font-family:Times New Roman;font-size:10pt;"> announced by the Company on August 27, 2012 and</font><font style="font-family:Times New Roman;font-size:10pt;"> discussed further below, which was calculated as the present v</font><font style="font-family:Times New Roman;font-size:10pt;">alue of the special</font><font style="font-family:Times New Roman;font-size:10pt;"> cash dividend with respect to those shares deliverable under the ASR Agreement prior to the ex-dividend date</font><font style="font-family:Times New Roman;font-size:10pt;"> of December 3, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">Since the ASR Agreement is indexed to the Company's stock and the Company has the option to settle in cash or shares at the Company's dis</font><font style="font-family:Times New Roman;font-size:10pt;">cretion, the Company has accounted for shares repurchased under the ASR Agreement within equity in its consolidated balance sheet</font><font style="font-family:Times New Roman;font-size:10pt;">. As such, the </font><font style="font-family:Times New Roman;font-size:10pt;">$654.1</font><font style="font-family:Times New Roman;font-size:10pt;"> million payment to Barclays was initially recorded as a reduction to additional paid in capital (“APIC”) prior to the shares being delivered. As the shares are delivered by Barclays, AOL will transfer </font><font style="font-family:Times New Roman;font-size:10pt;">an amount equal to the estimated</font><font style="font-family:Times New Roman;font-size:10pt;"> value of the shares </font><font style="font-family:Times New Roman;font-size:10pt;">delivered </font><font style="font-family:Times New Roman;font-size:10pt;">from APIC to treasury stock</font><font style="font-family:Times New Roman;font-size:10pt;">, such that upon completion of the </font><font style="font-family:Times New Roman;font-size:10pt;">ASR Agreement, the entire $654.1</font><font style="font-family:Times New Roman;font-size:10pt;"> million will be recorded as treasury stock</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">O</font><font style="font-family:Times New Roman;font-size:10pt;">n</font><font style="font-family:Times New Roman;font-size:10pt;"> August 30, 2012, Barclay</font><font style="font-family:Times New Roman;font-size:10pt;">s delivered </font><font style="font-family:Times New Roman;font-size:10pt;">4.0</font><font style="font-family:Times New Roman;font-size:10pt;"> million shares to A</font><font style="font-family:Times New Roman;font-size:10pt;">OL</font><font style="font-family:Times New Roman;font-size:10pt;"> at an estimated value</font><font style="font-family:Times New Roman;font-size:10pt;"> of $131.7</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;"> and </font><font style="font-family:Times New Roman;font-size:10pt;">that amount was</font><font style="font-family:Times New Roman;font-size:10pt;"> recorded as treasury stock on the Company's consolidated balance sheet.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">Barclays </font><font style="font-family:Times New Roman;font-size:10pt;">delivered </font><font style="font-family:Times New Roman;font-size:10pt;">an additional </font><font style="font-family:Times New Roman;font-size:10pt;">6.5</font><font style="font-family:Times New Roman;font-size:10pt;"> million </font><font style="font-family:Times New Roman;font-size:10pt;">shares on October 24, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The specific number of shares that AOL </font><font style="font-family:Times New Roman;font-size:10pt;">ultimately will </font><font style="font-family:Times New Roman;font-size:10pt;">repurchase under the ASR Agreement will be based gener</font><font style="font-family:Times New Roman;font-size:10pt;">ally on the share price of AOL common s</font><font style="font-family:Times New Roman;font-size:10pt;">tock over a valuation period in accordance with the terms of the ASR Agreement, subject to a floor and cap provision that establishes a minimum and maximum number of repur</font><font style="font-family:Times New Roman;font-size:10pt;">chased shares, and subject to the</font><font style="font-family:Times New Roman;font-size:10pt;"> agreed adjustment for the value of the special </font><font style="font-family:Times New Roman;font-size:10pt;">cash </font><font style="font-family:Times New Roman;font-size:10pt;">dividend</font><font style="font-family:Times New Roman;font-size:10pt;">. The minimu</font><font style="font-family:Times New Roman;font-size:10pt;">m and maximum share number </font><font style="font-family:Times New Roman;font-size:10pt;">depend</font><font style="font-family:Times New Roman;font-size:10pt;">s</font><font style="font-family:Times New Roman;font-size:10pt;"> generally on the share price at which Barc</font><font style="font-family:Times New Roman;font-size:10pt;">lays purchased</font><font style="font-family:Times New Roman;font-size:10pt;"> shares of AOL's common s</font><font style="font-family:Times New Roman;font-size:10pt;">tock during the</font><font style="font-family:Times New Roman;font-size:10pt;"> initial hedging per</font><font style="font-family:Times New Roman;font-size:10pt;">iod, during which Barclays </font><font style="font-family:Times New Roman;font-size:10pt;">establish</font><font style="font-family:Times New Roman;font-size:10pt;">ed an</font><font style="font-family:Times New Roman;font-size:10pt;"> initial hedge position in respect of its obligations to deliver shares under the ASR Agreement</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> Barclays will be required to make additional share deliveries under th</font><font style="font-family:Times New Roman;font-size:10pt;">e ASR Agreement, and </font><font style="font-family:Times New Roman;font-size:10pt;">AOL expects to</font><font style="font-family:Times New Roman;font-size:10pt;"> receive delivery of a substantial majority of shares underlying the transaction before the end of the year. On final settlement of the ASR Agreement, AOL may be entitled to re</font><font style="font-family:Times New Roman;font-size:10pt;">ceive additional shares of AOL common s</font><font style="font-family:Times New Roman;font-size:10pt;">tock, or, if it </font><font style="font-family:Times New Roman;font-size:10pt;">elects, cash, from Barclays, or</font><font style="font-family:Times New Roman;font-size:10pt;"> under certain circumstances specified in the ASR Agreement, AOL may be required to deliver shares or make a cash payment, at its option, to Barclays. In connection with this transaction, Barclays </font><font style="font-family:Times New Roman;font-size:10pt;">has purchased and </font><font style="font-family:Times New Roman;font-size:10pt;">is expected to </font><font style="font-family:Times New Roman;font-size:10pt;">continue to </font><font style="font-family:Times New Roman;font-size:10pt;">purchase AOL </font><font style="font-family:Times New Roman;font-size:10pt;">common s</font><font style="font-family:Times New Roman;font-size:10pt;">tock in the open market. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;">Special </font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">Cash </font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">Dividend</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">On August 26</font><font style="font-family:Times New Roman;font-size:10pt;">, 2012, </font><font style="font-family:Times New Roman;font-size:10pt;">AOL declared</font><font style="font-family:Times New Roman;font-size:10pt;"> the payment of</font><font style="font-family:Times New Roman;font-size:10pt;"> a special, </font><font style="font-family:Times New Roman;font-size:10pt;">one-time, cash dividend of $5.15</font><font style="font-family:Times New Roman;font-size:10pt;"> per share, payable on December 14, 2012 to shareholders of record at the close of business on December 5, 2012</font><font style="font-family:Times New Roman;font-size:10pt;"> (the “Special </font><font style="font-family:Times New Roman;font-size:10pt;">Cash </font><font style="font-family:Times New Roman;font-size:10pt;">Dividend”)</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">In conn</font><font style="font-family:Times New Roman;font-size:10pt;">ection with the payment of the Special </font><font style="font-family:Times New Roman;font-size:10pt;">Cash </font><font style="font-family:Times New Roman;font-size:10pt;">D</font><font style="font-family:Times New Roman;font-size:10pt;">ividend and in accordance with and pursuant to the </font><font style="font-family:Times New Roman;font-size:10pt;">Company's Amended and Restated</font><font style="font-family:Times New Roman;font-size:10pt;"> 2010 Stock Incentive Plan</font><font style="font-family:Times New Roman;font-size:10pt;"> (“2010 SIP”)</font><font style="font-family:Times New Roman;font-size:10pt;">, the Company </font><font style="font-family:Times New Roman;font-size:10pt;">plans to</font><font style="font-family:Times New Roman;font-size:10pt;"> make an equitable adjustment to outstanding stock options, such that </font><font style="font-family:Times New Roman;font-size:10pt;">both </font><font style="font-family:Times New Roman;font-size:10pt;">the fair value </font><font style="font-family:Times New Roman;font-size:10pt;">and intrinsic value </font><font style="font-family:Times New Roman;font-size:10pt;">of employee awards immediately following the </font><font style="font-family:Times New Roman;font-size:10pt;">Special </font><font style="font-family:Times New Roman;font-size:10pt;">Cash </font><font style="font-family:Times New Roman;font-size:10pt;">D</font><font style="font-family:Times New Roman;font-size:10pt;">ividend will be </font><font style="font-family:Times New Roman;font-size:10pt;">essentially </font><font style="font-family:Times New Roman;font-size:10pt;">unchanged from the fair value </font><font style="font-family:Times New Roman;font-size:10pt;">and intrinsic value </font><font style="font-family:Times New Roman;font-size:10pt;">prior to the </font><font style="font-family:Times New Roman;font-size:10pt;">Special </font><font style="font-family:Times New Roman;font-size:10pt;">Cash </font><font style="font-family:Times New Roman;font-size:10pt;">D</font><font style="font-family:Times New Roman;font-size:10pt;">ividend. In addition, individuals who hold </font><font style="font-family:Times New Roman;font-size:10pt;">restricted stock u</font><font style="font-family:Times New Roman;font-size:10pt;">nits (“</font><font style="font-family:Times New Roman;font-size:10pt;">RSUs</font><font style="font-family:Times New Roman;font-size:10pt;">”)</font><font style="font-family:Times New Roman;font-size:10pt;"> and </font><font style="font-family:Times New Roman;font-size:10pt;">performance stock u</font><font style="font-family:Times New Roman;font-size:10pt;">nits (“</font><font style="font-family:Times New Roman;font-size:10pt;">PSUs</font><font style="font-family:Times New Roman;font-size:10pt;">”)</font><font style="font-family:Times New Roman;font-size:10pt;"> will be paid out the Special </font><font style="font-family:Times New Roman;font-size:10pt;">Cash </font><font style="font-family:Times New Roman;font-size:10pt;">Dividend</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">as the respective RSUs and PSUs vest. The Company does not expect to record any material incremental compensation expense in connection with the adjustment of stock options or payment of dividends on RSUs and PSUs.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">As a result of the declaration of the </font><font style="font-family:Times New Roman;font-size:10pt;">Special </font><font style="font-family:Times New Roman;font-size:10pt;">Cash </font><font style="font-family:Times New Roman;font-size:10pt;">D</font><font style="font-family:Times New Roman;font-size:10pt;">ividend, AOL recorded an esti</font><font style="font-family:Times New Roman;font-size:10pt;">mated dividend payable</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">of $445.1</font><font style="font-family:Times New Roman;font-size:10pt;"> million as of September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;"> with an offsetting reduction to retained earnings</font><font style="font-family:Times New Roman;font-size:10pt;"> in the Company's consolidated balance sheet</font><font style="font-family:Times New Roman;font-size:10pt;">, reflecting the estimated amount of the </font><font style="font-family:Times New Roman;font-size:10pt;">Special </font><font style="font-family:Times New Roman;font-size:10pt;">Cash </font><font style="font-family:Times New Roman;font-size:10pt;">D</font><font style="font-family:Times New Roman;font-size:10pt;">ividend based on </font><font style="font-family:Times New Roman;font-size:10pt;">shares </font><font style="font-family:Times New Roman;font-size:10pt;">expected to be </font><font style="font-family:Times New Roman;font-size:10pt;">outstanding on December 5, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">This amount is subject to change based on the actual number of shares out</font><font style="font-family:Times New Roman;font-size:10pt;">standing on December 5, 2012. The Company</font><font style="font-family:Times New Roman;font-size:10pt;"> expect</font><font style="font-family:Times New Roman;font-size:10pt;">s</font><font style="font-family:Times New Roman;font-size:10pt;"> to announce the anticipated treatment of the </font><font style="font-family:Times New Roman;font-size:10pt;">Special </font><font style="font-family:Times New Roman;font-size:10pt;">Cash </font><font style="font-family:Times New Roman;font-size:10pt;">D</font><font style="font-family:Times New Roman;font-size:10pt;">ividend for tax purposes prior to the ex-dividend date</font><font style="font-family:Times New Roman;font-size:10pt;"> of December 3, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;">Tax Asset Protection Plan</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">As of September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">, AOL has</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">significant </font><font style="font-family:Times New Roman;font-size:10pt;">domestic tax attributes</font><font style="font-family:Times New Roman;font-size:10pt;">,</font><font style="font-family:Times New Roman;font-size:10pt;"> including </font><font style="font-family:Times New Roman;font-size:10pt;">both </font><font style="font-family:Times New Roman;font-size:10pt;">net operat</font><font style="font-family:Times New Roman;font-size:10pt;">ing loss</font><font style="font-family:Times New Roman;font-size:10pt;"> deferred tax assets </font><font style="font-family:Times New Roman;font-size:10pt;">and capital loss carry</font><font style="font-family:Times New Roman;font-size:10pt;">-forward</font><font style="font-family:Times New Roman;font-size:10pt;"> deferred ta</font><font style="font-family:Times New Roman;font-size:10pt;">x assets</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">Unless otherwise restricted, AOL can utilize these tax attributes in certain circumstances to offset future </font><font style="font-family:Times New Roman;font-size:10pt;">U.S.</font><font style="font-family:Times New Roman;font-size:10pt;"> taxable income, including in connection with capital gains that may be generated from a potential asset sale.</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">S</font><font style="font-family:Times New Roman;font-size:10pt;">hould a “change of control” be triggered under Section 382 of the Internal Revenue Code of 1986, as amended, </font><font style="font-family:Times New Roman;font-size:10pt;">the Company</font><font style="font-family:Times New Roman;font-size:10pt;"> may not be able </font><font style="font-family:Times New Roman;font-size:10pt;">to utilize these tax attributes to offset future U.S. taxable income</font><font style="font-family:Times New Roman;font-size:10pt;">, or such utilization</font><font style="font-family:Times New Roman;font-size:10pt;"> could be significantly delayed. As a result, during the third quarter of 2012, the Company </font><font style="font-family:Times New Roman;font-size:10pt;">adopted a Tax Asset Protection Plan</font><font style="font-family:Times New Roman;font-size:10pt;"> (the “TAPP”) that</font><font style="font-family:Times New Roman;font-size:10pt;"> is</font><font style="font-family:Times New Roman;font-size:10pt;"> intended to act as a deterrent to any individual, individual fund or family of funds with common </font><font style="font-family:Times New Roman;font-size:10pt;">dispositive power acquiring 4.9%</font><font style="font-family:Times New Roman;font-size:10pt;"> or more of the Company's outstanding shares without the approval of the Company'</font><font style="font-family:Times New Roman;font-size:10pt;">s Board of Directors. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">Pursuant to the TAPP, the Company declared a dividend of one right on each outstanding share of common stock held of record as of the close of business on September 7, 2012. One right will also be issued together with each share of common stock issued after September 7, 2012 but before the date the rights are exercisable and, in certain circumstances, after such date. Subject to the terms, provisions and conditions of the </font><font style="font-family:Times New Roman;font-size:10pt;">TAPP</font><font style="font-family:Times New Roman;font-size:10pt;">, if the rights become exercisable, each right would initially represent the right to purchase from the Company one ten-thousandth of a share of Series A Preferred St</font><font style="font-family:Times New Roman;font-size:10pt;">ock for a purchase price of $100</font><font style="font-family:Times New Roman;font-size:10pt;">. If issued, each fractional share of Series A Preferred Stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of common stock.</font><font style="font-family:Times New Roman;font-size:10pt;"> However, prior to exercise, a r</font><font style="font-family:Times New Roman;font-size:10pt;">ight does not give its holder any rights as a stockholder of the Company, including, without limitation, any dividend, voting or liquidation rights.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The rights will expire on August 27, 2015, or such earlier time as the Company's Board of Directors determines that the Company has no remaining designated tax attributes as of the beginning of </font><font style="font-family:Times New Roman;font-size:10pt;">a taxable year. The Company</font><font style="font-family:Times New Roman;font-size:10pt;"> intends to submit the</font><font style="font-family:Times New Roman;font-size:10pt;"> TAPP</font><font style="font-family:Times New Roman;font-size:10pt;"> for stockholder approval at its next annual meeting of stockholders. </font><font style="font-family:Times New Roman;font-size:10pt;">The adoption </font><font style="font-family:Times New Roman;font-size:10pt;">of the TAPP</font><font style="font-family:Times New Roman;font-size:10pt;"> did n</font><font style="font-family:Times New Roman;font-size:10pt;">ot have a material impact on the Company's</font><font style="font-family:Times New Roman;font-size:10pt;"> financial statements as of and for the three months ended September 30, 2012.</font></p>
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE 7—EQUITY-BASED COMPENSATION</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">Pursuant to the Company's 2010 SIP stock options are granted to employees, advisors and non-employee directors of AOL with exercise prices equal to the quoted market value of the common stock at the date of grant. Performance stock options are also granted to certain senior level executives. Generally, the stock options vest ratably over a three to four year vesting period and expire ten years from the date of grant. Certain stock option awards provide for accelerated vesting upon an election to retire after reaching a specified age and years of service, as well as certain additional circumstances for non-employee directors. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:12pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">Also pursuant to the 2010 SIP, AOL may also grant shares of common stock, RSUs or PSUs to its employees, advisors and non-employee directors, which generally vest ratably over a three to four year period from the date of grant. Holders of restricted stock, RSU and PSU awards are genera</font><font style="font-family:Times New Roman;font-size:10pt;">lly entitled to receive </font><font style="font-family:Times New Roman;font-size:10pt;">cash dividends or dividend equivalents, respectively, at the discretion of the Board of Directors, if paid by the Company during the period of time that the restricted stock, RSU or PSU awards</font><font style="font-family:Times New Roman;font-size:10pt;"> are unvested. Certain of the C</font><font style="font-family:Times New Roman;font-size:10pt;">ompany's PSU awards are subject to quarterly remeasurement of expense with corresponding adjustments to cumulative recognized compensation expense, as the service inception date precedes the grant date for these awards. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"> </font><font style="font-family:Times New Roman;font-size:10pt;"><></font><font style="font-family:Times New Roman;font-size:10pt;">The Company is authorized to grant equity awards to employees, advisors and non-employee directors covering an aggregate of 21.8 million</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">shares of AOL common stock under the 2010 SIP. Shares that are subject to Restricted Stock Awards or Other Stock-Based Awards (as such terms are defined in the 2010 SIP) shall be counted against the share authorization limit and the per participant limit as 1.61 shares for every share granted.  Amounts available for issuance pursuant to grants under the 2010 SIP will change over time based on such activities as the conversion of equity awards into common stock, the forfeiture of equity awards and the cancellation of equity awards, among other activities.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:1pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">Upon the (i) exercise of a stock option award, (ii) vesting of a RSU, (iii) grant of restricted stock or (iv) vesting of a performance share, shares of AOL common stock are issued from authorized but unissued shares or from treasury stock. </font></p><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 18px"><td colspan="13" style="width: 657px; text-align:left;border-color:#000000;min-width:657px;"><font style="FONT-WEIGHT: bold;FONT-STYLE: italic;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Equity-Based Compensation Expense</font></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 230px; text-align:left;border-color:#000000;min-width:230px;"> <sup></sup></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td colspan="12" style="width: 623px; text-align:left;border-color:#000000;min-width:623px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Compensation expense recognized by AOL related to its equity-based compensation plans is as follows</font></td></tr><tr style="height: 17px"><td colspan="13" style="width: 657px; text-align:left;border-color:#000000;min-width:657px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">(in millions):</font></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 230px; text-align:left;border-color:#000000;min-width:230px;"> <sup></sup></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 230px; text-align:left;border-color:#000000;min-width:230px;"> <sup></sup></td><td colspan="5" style="width: 187px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:187px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Three Months Ended September 30,</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td colspan="5" style="width: 187px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:187px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Nine Months Ended September 30,</font></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 230px; text-align:left;border-color:#000000;min-width:230px;"> <sup></sup></td><td colspan="2" style="width: 86px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:86px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td colspan="2" style="width: 86px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:86px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td colspan="2" style="width: 86px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:86px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td colspan="2" style="width: 86px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:86px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td></tr><tr style="height: 17px"><td colspan="2" style="width: 264px; text-align:left;border-color:#000000;min-width:264px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Stock options</font><sup></sup></td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 4.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.1</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 13.5</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 15.7</font></td></tr><tr style="height: 17px"><td colspan="2" style="width: 264px; text-align:left;border-color:#000000;min-width:264px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">RSUs and PSUs</font><sup></sup></td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 6.4</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.2</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 14.8</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 16.0</font></td></tr><tr style="height: 18px"><td colspan="2" style="width: 264px; text-align:left;border-color:#000000;min-width:264px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Total equity-based compensation expense</font><sup></sup></td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">11.1</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">10.3</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">28.3</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">31.7</font></td></tr><tr style="height: 18px"><td colspan="2" style="width: 264px; text-align:left;border-color:#000000;min-width:264px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Tax benefit recognized </font><sup></sup></td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 4.4</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 4.1</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 11.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 12.5</font></td></tr></table></div><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><p style='margin-top:12pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">As of</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">, the Compa</font><font style="font-family:Times New Roman;font-size:10pt;">ny had</font><font style="font-family:Times New Roman;font-size:10pt;"> 7.8</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;"> stock options and</font><font style="font-family:Times New Roman;font-size:10pt;"> 3.2</font><font style="font-family:Times New Roman;font-size:10pt;"> million RSUs</font><font style="font-family:Times New Roman;font-size:10pt;">/PSUs</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">outstanding to employees, advisors and non-employee</font><font style="font-family:Arial;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">directors. The weighted-average exercise price of the stock options and </font><font style="font-family:Times New Roman;font-size:10pt;">the weighted-</font><font style="font-family:Times New Roman;font-size:10pt;">average </font><font style="font-family:Times New Roman;font-size:10pt;">grant date fair value of the RSUs</font><font style="font-family:Times New Roman;font-size:10pt;">/PSUs</font><font style="font-family:Times New Roman;font-size:10pt;"> outstanding as of </font><font style="font-family:Times New Roman;font-size:10pt;">September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;"> were </font><font style="font-family:Times New Roman;font-size:10pt;">$21.32 </font><font style="font-family:Times New Roman;font-size:10pt;">and </font><font style="font-family:Times New Roman;font-size:10pt;">$24.68</font><font style="font-family:Times New Roman;font-size:10pt;">, respectively.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">As of </font><font style="font-family:Times New Roman;font-size:10pt;">September 30, 2012,</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">total unrecognized compensation cost related to unvested AOL stock option awards</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">was </font><font style="font-family:Times New Roman;font-size:10pt;">$29.9</font><font style="font-family:Times New Roman;font-size:10pt;"> million and</font><font style="font-family:Times New Roman;font-size:10pt;"> is expected to be recognized over a weighted</font><font style="font-family:Times New Roman;font-size:10pt;">-</font><font style="font-family:Times New Roman;font-size:10pt;">average period of approximately</font><font style="font-family:Times New Roman;font-size:10pt;"> 2.4</font><font style="font-family:Times New Roman;font-size:10pt;"> years.</font><font style="font-family:Times New Roman;font-size:10pt;"> Total unrecognized compensation cost </font><font style="font-family:Times New Roman;font-size:10pt;">as of </font><font style="font-family:Times New Roman;font-size:10pt;">September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">related to unvested RSUs</font><font style="font-family:Times New Roman;font-size:10pt;">/PSUs</font><font style="font-family:Times New Roman;font-size:10pt;"> was </font><font style="font-family:Times New Roman;font-size:10pt;">$49.7</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;"> and is expected to be recognized over a weighted-average period of approximately</font><font style="font-family:Times New Roman;font-size:10pt;"> 2.2</font><font style="font-family:Times New Roman;font-size:10pt;"> years</font><font style="font-family:Times New Roman;font-size:10pt;">.</font><font style="font-family:Times New Roman;font-size:10pt;"> To the extent the actual forfeiture rate is different from what the Company has estimated, equity-based compensation expense related to these awards will be different from the Company's expectations.</font></p><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 17px"><td colspan="2" style="width: 352px; text-align:left;border-color:#000000;min-width:352px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">AOL Stock Options </font></td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"> </td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 34px"><td colspan="7" style="width: 637px; text-align:left;border-color:#000000;min-width:637px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> The assumptions presented in the table below represent the weighted-average value of the applicable assumption used to value AOL stock options at their grant date: </font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"> </td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td colspan="3" style="width: 185px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:185px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Nine Months Ended September 30,</font></td><td style="width: 18px; text-align:center;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"> </td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:87px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 11px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:87px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td><td style="width: 18px; text-align:center;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Expected volatility</font></td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">39.1%</font></td><td style="width: 11px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">36.8%</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Expected term to exercise from grant date</font></td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">5.10 years</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">5.51 years</font></td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Risk-free rate </font></td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">1.1%</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">2.4%</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Expected dividend yield</font></td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">0.0%</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">0.0%</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"> </td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr></table></div><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><p style='margin-top:12pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">The assumptions above</font><font style="font-family:Times New Roman;font-size:10pt;"> rel</font><font style="font-family:Times New Roman;font-size:10pt;">ate to AOL stock options granted during the period</font><font style="font-family:Times New Roman;font-size:10pt;">. The assumptions for 2011</font><font style="font-family:Times New Roman;font-size:10pt;"> do not include stock options that were converted in connection with the acquisition of The Huffington Post during the </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30,</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">2011</font><font style="font-family:Times New Roman;font-size:10pt;">.</font></p>
4700000
13500000
6400000
14800000
4400000
4100000
11200000
12500000
5100000
15700000
16000000
5200000
11100000
10300000
<div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 18px"><td colspan="13" style="width: 657px; text-align:left;border-color:#000000;min-width:657px;"><font style="FONT-WEIGHT: bold;FONT-STYLE: italic;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Equity-Based Compensation Expense</font></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 230px; text-align:left;border-color:#000000;min-width:230px;"> <sup></sup></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td colspan="12" style="width: 623px; text-align:left;border-color:#000000;min-width:623px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Compensation expense recognized by AOL related to its equity-based compensation plans is as follows</font></td></tr><tr style="height: 17px"><td colspan="13" style="width: 657px; text-align:left;border-color:#000000;min-width:657px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">(in millions):</font></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 230px; text-align:left;border-color:#000000;min-width:230px;"> <sup></sup></td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:left;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:left;border-color:#000000;min-width:70px;"> </td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 230px; text-align:left;border-color:#000000;min-width:230px;"> <sup></sup></td><td colspan="5" style="width: 187px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:187px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Three Months Ended September 30,</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td colspan="5" style="width: 187px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:187px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Nine Months Ended September 30,</font></td></tr><tr style="height: 17px"><td style="width: 34px; text-align:left;border-color:#000000;min-width:34px;"> </td><td style="width: 230px; text-align:left;border-color:#000000;min-width:230px;"> <sup></sup></td><td colspan="2" style="width: 86px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:86px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td colspan="2" style="width: 86px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:86px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td colspan="2" style="width: 86px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:86px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td colspan="2" style="width: 86px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:86px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td></tr><tr style="height: 17px"><td colspan="2" style="width: 264px; text-align:left;border-color:#000000;min-width:264px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Stock options</font><sup></sup></td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 4.7</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.1</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 13.5</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 15.7</font></td></tr><tr style="height: 17px"><td colspan="2" style="width: 264px; text-align:left;border-color:#000000;min-width:264px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">RSUs and PSUs</font><sup></sup></td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 6.4</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.2</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 14.8</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; text-align:right;border-color:#000000;min-width:16px;"> </td><td style="width: 70px; text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 16.0</font></td></tr><tr style="height: 18px"><td colspan="2" style="width: 264px; text-align:left;border-color:#000000;min-width:264px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Total equity-based compensation expense</font><sup></sup></td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">11.1</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">10.3</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">28.3</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">31.7</font></td></tr><tr style="height: 18px"><td colspan="2" style="width: 264px; text-align:left;border-color:#000000;min-width:264px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Tax benefit recognized </font><sup></sup></td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 4.4</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 4.1</font></td><td style="width: 19px; text-align:left;border-color:#000000;min-width:19px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 11.2</font></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 16px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:16px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 70px; border-top-style:double;border-top-width:3px;text-align:right;border-color:#000000;min-width:70px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 12.5</font></td></tr></table></div>
0.0
0.0
5.10
5.51
0.391
0.368
0.011
0.024
<div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 17px"><td colspan="2" style="width: 352px; text-align:left;border-color:#000000;min-width:352px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">AOL Stock Options </font></td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"> </td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 34px"><td colspan="7" style="width: 637px; text-align:left;border-color:#000000;min-width:637px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> The assumptions presented in the table below represent the weighted-average value of the applicable assumption used to value AOL stock options at their grant date: </font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"> </td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td colspan="3" style="width: 185px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:185px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Nine Months Ended September 30,</font></td><td style="width: 18px; text-align:center;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"> </td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:87px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2012</font></td><td style="width: 11px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; border-top-style:solid;border-top-width:1px;border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:87px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">2011</font></td><td style="width: 18px; text-align:center;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Expected volatility</font></td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">39.1%</font></td><td style="width: 11px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; border-top-style:solid;border-top-width:1px;text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">36.8%</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Expected term to exercise from grant date</font></td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">5.10 years</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">5.51 years</font></td><td style="width: 18px; text-align:right;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Risk-free rate </font></td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">1.1%</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">2.4%</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Expected dividend yield</font></td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">0.0%</font></td><td style="width: 11px; text-align:right;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:right;border-color:#000000;min-width:87px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">0.0%</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr><tr style="height: 17px"><td style="width: 290px; text-align:left;border-color:#000000;min-width:290px;"> </td><td style="width: 62px; text-align:left;border-color:#000000;min-width:62px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 50px; text-align:left;border-color:#000000;min-width:50px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 11px; text-align:left;border-color:#000000;min-width:11px;"> </td><td style="width: 87px; text-align:left;border-color:#000000;min-width:87px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td></tr></table></div>
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE </font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">8</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">—RESTRUCTURING COSTS </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">For the </font><font style="font-family:Times New Roman;font-size:10pt;">nine months ended September 30, 2012, </font><font style="font-family:Times New Roman;font-size:10pt;">the Company incurred </font><font style="font-family:Times New Roman;font-size:10pt;">$7.7</font><font style="font-family:Times New Roman;font-size:10pt;"> million</font><font style="font-family:Times New Roman;font-size:10pt;"> of </font><font style="font-family:Times New Roman;font-size:10pt;">restructuring costs </font><font style="font-family:Times New Roman;font-size:10pt;">related to organizational changes made in an effort to improve </font><font style="font-family:Times New Roman;font-size:10pt;">its</font><font style="font-family:Times New Roman;font-size:10pt;"> ability to </font><font style="font-family:Times New Roman;font-size:10pt;">execute </font><font style="font-family:Times New Roman;font-size:10pt;">its</font><font style="font-family:Times New Roman;font-size:10pt;"> stra</font><font style="font-family:Times New Roman;font-size:10pt;">t</font><font style="font-family:Times New Roman;font-size:10pt;">egy</font><font style="font-family:Times New Roman;font-size:10pt;">. </font><font style="font-family:Times New Roman;font-size:10pt;">These restructuring costs were primarily related to involuntary </font><font style="font-family:Times New Roman;font-size:10pt;">employee </font><font style="font-family:Times New Roman;font-size:10pt;">terminations. </font><font style="font-family:Times New Roman;font-size:10pt;"><></font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">A summary of </font><font style="font-family:Times New Roman;font-size:10pt;">AOL</font><font style="font-family:Times New Roman;font-size:10pt;">'s restructuring activity for th</font><font style="font-family:Times New Roman;font-size:10pt;">e nine months ended September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">is as follows (in millions): </font></p><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 37px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"> <sup></sup></td><td colspan="2" style="width: 83px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:83px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Employee Terminations</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td colspan="2" style="width: 83px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:83px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Other Exit Costs</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td colspan="2" style="width: 83px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:83px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Total</font></td></tr><tr style="height: 17px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"> <sup></sup></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:68px;"> </td></tr><tr style="height: 22px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Liability at December 31, 2011</font><sup></sup></td><td style="width: 15px; text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.6</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 7.1</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 12.7</font></td></tr><tr style="height: 17px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Restructuring expense</font><sup></sup></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 7.8</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.1)</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 7.7</font></td></tr><tr style="height: 17px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Foreign currency translation and other adjustments </font><sup></sup></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1.0</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.2</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1.2</font></td></tr><tr style="height: 17px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Cash paid</font><sup></sup></td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (13.6)</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (4.0)</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (17.6)</font></td></tr><tr style="height: 22px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Liability at September 30, 2012</font><sup></sup></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.8</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 3.2</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 4.0</font></td></tr></table></div><p style='margin-top: 0pt; margin-bottom: 0pt;'></p><p style='margin-top:12pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">At September 30, 2012, of </font><font style="font-family:Times New Roman;font-size:10pt;">the re</font><font style="font-family:Times New Roman;font-size:10pt;">maining liability of</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">$4.0</font><font style="font-family:Times New Roman;font-size:10pt;"> million,</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">$3.7</font><font style="font-family:Times New Roman;font-size:10pt;"> million was classified as a current liability within accrued expenses and other current liabilities, with the remaining </font><font style="font-family:Times New Roman;font-size:10pt;">$0.3</font><font style="font-family:Times New Roman;font-size:10pt;"> million classified </font><font style="font-family:Times New Roman;font-size:10pt;">within other</font><font style="font-family:Times New Roman;font-size:10pt;"> long-term liabilit</font><font style="font-family:Times New Roman;font-size:10pt;">ies</font><font style="font-family:Times New Roman;font-size:10pt;"> in the consolidated balance sheet. Amounts classified as long-term are </font><font style="font-family:Times New Roman;font-size:10pt;">expected to be paid through </font><font style="font-family:Times New Roman;font-size:10pt;">2014</font><font style="font-family:Times New Roman;font-size:10pt;">. </font></p>
800000
-13600000
1000000
7800000
5600000
3200000
-4000000
-100000
7100000
200000
7700000
-17600000
4000000
1200000
12700000
<div><table style="border-collapse:collapse;margin-top:20px;"><tr style="height: 37px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"> <sup></sup></td><td colspan="2" style="width: 83px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:83px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Employee Terminations</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td colspan="2" style="width: 83px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:83px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Other Exit Costs</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td colspan="2" style="width: 83px; border-bottom-style:solid;border-bottom-width:1px;text-align:center;border-color:#000000;min-width:83px;"><font style="FONT-WEIGHT: bold;FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: center;">Total</font></td></tr><tr style="height: 17px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"> <sup></sup></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:left;border-color:#000000;min-width:68px;"> </td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-top-style:solid;border-top-width:1px;text-align:center;border-color:#000000;min-width:68px;"> </td></tr><tr style="height: 22px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Liability at December 31, 2011</font><sup></sup></td><td style="width: 15px; text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 5.6</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 7.1</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 12.7</font></td></tr><tr style="height: 17px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Restructuring expense</font><sup></sup></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 7.8</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (0.1)</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 7.7</font></td></tr><tr style="height: 17px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Foreign currency translation and other adjustments </font><sup></sup></td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1.0</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.2</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 1.2</font></td></tr><tr style="height: 17px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Cash paid</font><sup></sup></td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (13.6)</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (4.0)</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-bottom-style:solid;border-bottom-width:1px;text-align:left;border-color:#000000;min-width:15px;"> </td><td style="width: 68px; border-bottom-style:solid;border-bottom-width:1px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> (17.6)</font></td></tr><tr style="height: 22px"><td style="width: 374px; text-align:left;border-color:#000000;min-width:374px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;">Liability at September 30, 2012</font><sup></sup></td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 0.8</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 3.2</font></td><td style="width: 18px; text-align:left;border-color:#000000;min-width:18px;"> </td><td style="width: 15px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:15px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;TEXT-ALIGN: right;">$</font></td><td style="width: 68px; border-top-style:solid;border-top-width:1px;border-bottom-style:double;border-bottom-width:3px;text-align:right;border-color:#000000;min-width:68px;"><font style="FONT-FAMILY: Times New Roman;FONT-SIZE: 10pt;COLOR: #000000;"> 4.0</font></td></tr></table></div>
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE 9 – COMMITMENTS AND CONTINGENCIES</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;">Commitments</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">For a description of AOL's commitments see “Note 1</font><font style="font-family:Times New Roman;font-size:10pt;">0</font><font style="font-family:Times New Roman;font-size:10pt;">”</font><font style="font-family:Times New Roman;font-size:10pt;"> to the Company's audited consolidated financial statements included in the Annual Report.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;margin-left:0px;">C</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">ontingencies</font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;"> </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">During the second quarter of 2012, the Company paid </font><font style="font-family:Times New Roman;font-size:10pt;">$13.5</font><font style="font-family:Times New Roman;font-size:10pt;"> million to settle a sales tax matter with the Virginia Department of Taxation covering the period from February 1995 through December 2011.  In connection with the resolution of this matter, the Company recorded incremental sales and use tax expense within general </font><font style="font-family:Times New Roman;font-size:10pt;">and</font><font style="font-family:Times New Roman;font-size:10pt;"> administrative expense of </font><font style="font-family:Times New Roman;font-size:10pt;">$9.6</font><font style="font-family:Times New Roman;font-size:10pt;"> million for the nine</font><font style="font-family:Times New Roman;font-size:10pt;"> months ended </font><font style="font-family:Times New Roman;font-size:10pt;">September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">.</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">AOL is a party to a variety of claims, suits and proceedings that arise in the normal course of business, including actions with respect to intellectual property claims, tax matters, labor and unemployment claims, commercial claims, claims related to the Company's business model for content creation and other matters. With respect to tax matters, AOL has received tax assessments in certain states related to sales and use taxes on its business operations. AOL has appealed these tax assessments and plans to vigorously contest these matters. In addition, AOL has received assessments in certain foreign countries related to income tax and transfer pricing, and plans to vigorously contest these matters as well. In certain instances, the Company was required to pay a portion of the tax assessment in order to proceed with the dispute of the assessment. While the results of such normal course claims, suits and proceedings cannot be predicted with certainty, management does not believe that, based on current knowledge and the likely timing of resolution of the various matters, any additional reasonably possible potential losses above the amount accrued for such matters would be material to the Company's financial statements. Regardless of the outcome, legal proceedings can have an adverse effect on us because of defense costs, diversion of management resources and other factors.</font></p>
<p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:0px;"><></font><font style="font-family:Times New Roman;font-size:10pt;font-weight:bold;">NOTE 10—SEGMENT INFORMATION</font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;"><></font><font style="font-family:Times New Roman;font-size:10pt;">An operating segment is defined as a component of an enterprise that engages in business activities from which it may e</font><font style="font-family:Times New Roman;font-size:10pt;">arn revenues and incur expenses</font><font style="font-family:Times New Roman;font-size:10pt;"> and that has discrete financial information that is regularly reviewed by the chief operating decision</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">maker in deciding how to allocate resources and in assessing performance. </font></p><p style='margin-top:9pt; margin-bottom:0pt'><font style="font-family:Times New Roman;font-size:10pt;margin-left:24.5px;">On </font><font style="font-family:Times New Roman;font-size:10pt;">June 29, 2012, </font><font style="font-family:Times New Roman;font-size:10pt;">the Company</font><font style="font-family:Times New Roman;font-size:10pt;"> announced a plan to form operating units in conjunction with a planned change in management structure</font><font style="font-family:Times New Roman;font-size:10pt;">. However, the planned operating units are still being finalized, and there is currently no financial data regularly reviewed by the </font><font style="font-family:Times New Roman;font-size:10pt;"><></font><font style="font-family:Times New Roman;font-size:10pt;">Com</font><font style="font-family:Times New Roman;font-size:10pt;">pany's chief operating decision </font><font style="font-family:Times New Roman;font-size:10pt;">maker</font><font style="font-family:Times New Roman;font-size:10pt;"> below the consolidated unit level. </font><font style="font-family:Times New Roman;font-size:10pt;">The Company has determined that the chief operating decision maker </font><font style="font-family:Times New Roman;font-size:10pt;">function consists of </font><font style="font-family:Times New Roman;font-size:10pt;">its Chief Executive Officer and its Chief Operating Officer as of and for the </font><font style="font-family:Times New Roman;font-size:10pt;">three</font><font style="font-family:Times New Roman;font-size:10pt;"> months ended </font><font style="font-family:Times New Roman;font-size:10pt;">September 30, 2012. </font><font style="font-family:Times New Roman;font-size:10pt;">The chief operating decision maker </font><font style="font-family:Times New Roman;font-size:10pt;">function </font><font style="font-family:Times New Roman;font-size:10pt;">continues to evaluate performance and make</font><font style="font-family:Times New Roman;font-size:10pt;"> operating decisions about allocating resources based on financial data presented on a consolidated basis. There are no </font><font style="font-family:Times New Roman;font-size:10pt;">executives</font><font style="font-family:Times New Roman;font-size:10pt;"> who are held accountable by </font><font style="font-family:Times New Roman;font-size:10pt;">AOL</font><font style="font-family:Times New Roman;font-size:10pt;">'s chief operating decision </font><font style="font-family:Times New Roman;font-size:10pt;">maker</font><font style="font-family:Times New Roman;font-size:10pt;"> function</font><font style="font-family:Times New Roman;font-size:10pt;">,</font><font style="font-family:Times New Roman;font-size:10pt;"> </font><font style="font-family:Times New Roman;font-size:10pt;">or anyone else, for </font><font style="font-family:Times New Roman;font-size:10pt;">a</font><font style="font-family:Times New Roman;font-size:10pt;">n operating</font><font style="font-family:Times New Roman;font-size:10pt;"> measure of profit or</font><font style="font-family:Times New Roman;font-size:10pt;"> loss for any operating unit below the consolidated unit level. Accordingly, management has determined that the Company has one segment</font><font style="font-family:Times New Roman;font-size:10pt;"> as of and for the </font><font style="font-family:Times New Roman;font-size:10pt;">nine</font><font style="font-family:Times New Roman;font-size:10pt;"> months</font><font style="font-family:Times New Roman;font-size:10pt;"> ended September 30, 2012</font><font style="font-family:Times New Roman;font-size:10pt;">. </font></p>