SECURITIES AND EXCHANGE COMMISSION FORM 10-K Annual report pursuant to section 13 and 15(d) Filing Date: 2012-02-24 | Period of Report: 2011-12-31 SEC Accession No. 0001193125-12-076633 (HTML Version on secdatabase.com) FILER AOL Inc. Mailing Address Business Address 22000 AOL WAY 770 BROADWAY CIK:1468516| IRS No.: 204268793 | State of Incorp.:DE | Fiscal Year End: 1231 DULLES VA 20166 4TH FLOOR Type: 10-K | Act: 34 | File No.: 001-34419 | Film No.: 12635695 NEW YORK NY 10003 SIC: 7374 Computer processing & data preparation 703-265-1000 Copyright © 2014 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2011 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-34419 AOL INC. (Exact name of Registrant as specified in its charter) Delaware 20-4268793 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 770 Broadway New York, NY 10003 (Address of principal executive offices) (Zip Code) Registrants telephone number, including area code: 212-652-6400 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on which Title of each class registered Common Stock, $0.01 par value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ Copyright © 2013 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit and post such files). Yes x No ¨ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of the registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨ (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x The aggregate market value of the registrants common stock held by non-affiliates of the registrant (based upon the closing price of such shares on the New York Stock Exchange on June 30, 2011) was approximately $2.1 billion. As of February 17, 2012, the number of shares of the Registrants common stock, par value $0.01 per share, outstanding was 94,779,540. DOCUMENTS INCORPORATED BY REFERENCE Certain information required by Part III of this report is incorporated by reference from the Registrants proxy statement to be filed pursuant to Regulation 14A with respect to the Registrants 2012 Annual Meeting of Stockholders. Copyright © 2013 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents AOL INC. TABLE OF CONTENTS Page Number Part I. Cautionary Statement Concerning Forward-Looking Statements 1 Item 1. Business 2 Item 1A. Risk Factors 15 Item 1B. Unresolved Staff Comments 26 Item 2. Properties 26 Item 3. Legal Proceedings 27 Part II. Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. Selected Financial Data 30 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 59 Item 8. Financial Statements and Supplementary Data 60 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 100 Item 9A. Controls and Procedures 101 Item 9B. Other Information 103 Part III. Item 10. Directors, Executive Officers and Corporate Governance 104 Item 11. Executive Compensation 104 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 104 Item 13. Certain Relationships and Related Transactions, and Director Independence 104 Item 14. Principal Accounting Fees and Services 104 Part IV. Item 15. Exhibits, Financial Statement Schedules 105 Signatures 106 Exhibit Index 108 i Copyright © 2013 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents AOL INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Page Number Report of Independent Registered Public Accounting Firm 61 Consolidated Statements of Operations for the years ended December 31, 2011, 2010 and 2009 62 Consolidated Balance Sheets as of December 31, 2011 and 2010 63 Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009 64 Consolidated Statements of Equity for the years ended December 31, 2011, 2010 and 2009 65 Note 1: Description of Business, Basis of Presentation and Summary of Significant Accounting Policies 66 Note 2: Income (Loss) Per Common Share 75 Note 3: Goodwill and Intangible Assets 76 Note 4: Business Acquisitions, Dispositions and Other Significant Transactions 79 Note 5: Long-term Debt and Other Financing Arrangements 83 Note 6: Income Taxes 84 Note 7: Stockholders Equity 87 Note 8: Equity-Based Compensation and Employee Benefit Plans 88 Note 9: Restructuring Costs 93 Note 10: Commitments and Contingencies 94 Note 11: Accrued Expenses and Other Current Liabilities 96 Note 12: Related Party Transactions 96 Note 13: Segment Information 97 Note 14: Selected Quarterly Financial Data (unaudited) 98 Schedule IIValuation and Qualifying Accounts 99 ii Copyright © 2013 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Table of Contents CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K (Annual Report) contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding business strategies, market potential, future financial and operational performance and other matters. Words such as anticipates, estimates, expects, projects, forecasts, intends, plans, will, believes and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements. These forward-looking statements are based on managements current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances. Except as required by law, we are under no obligation to, and expressly disclaim any obligation to, update or alter any forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise. Various factors could adversely affect our operations, business or financial results in the future and cause our actual results to differ materially from those contained in the forward-looking statements, including those factors discussed in detail in Item 1ARisk Factors. In addition, we operate a web services company in a highly competitive, rapidly changing and consumer- and technology- driven industry. This industry is affected by government regulation, economic, strategic, political and social conditions, consumer response to new and existing products and services, technological developments and, particularly in view of new technologies, the continued ability to protect intellectual property rights. Our actual results could differ materially from managements expectations because of changes in such factors. Achieving our business and financial objectives, including growth in operations and maintenance of a strong balance sheet and liquidity position, could be adversely affected by the factors discussed or referenced in Item 1ARisk Factors as well as, among other things: changes in our plans, strategies and intentions; continual decline in market valuations associated with our cash flows and revenues; the impact of significant acquisitions, dispositions and other similar transactions; our ability to attract