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AOL Overview & IPOSteve Hosley, SVP, and GM Ad Operations and Self Service

Cindy Gallagher, VP & Asst Controller

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Agenda

AOL’s Transformation

AOL’s Current Business Model

AOL’s Spin-off from Time Warner

AOL’s TransformationAOL has transformed itself from a member-based business to an advertising-supported business focused on delivering great content.

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August 5, 2006AOL Announces it is now Free

AOL has historically been characterized as a 20 year old “member-based” company. In 2006 its

walled garden of sites and e-mail became accessible by its millions of members. Since

then, it has been assembling itself as a world-class content provider supported by advertising.

Infrastructure has undergone a

transformation to support the new

business

The challenge is to dial up on-line advertising

at the same rate as membership declines

AOL Today

A leading Web network–98.5M Unique Visitors (UVs) in October 2009–4th largest property in U.S.

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AOL is focused on attracting and engaging consumers

and providing valuable online advertising services.

~3B Revenues ~8,000 employees73 sites in over 18 countries

Today, AOL is a leading global Web services company with an extensive suite of brands and offerings and worldwide audience.

9 #1-ranked entities in their category - Spinner.com, AOL Music, BlackVoices, Lemondrop, PoliticsDaily.com, Theboombox.com, Theboot.com, Pawnation.com and Stylelist.com (6 #2-ranked)

No. 2 mapping site – MapQuest

Additionally, AOL’s U.S. Access business serves as a valuable distribution channel for AOL’s consumer offerings.

No. 1 advertising network – Advertising.com – reaches 90% of U.S. online audience

AOL Goes Public

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AOL’s Mission:To inform, entertain and

connect the world.

AOL is looking forward to its future as an independent content-driven company.

Thursday, December 10th AOL common stock will begin trading on the New York Stock Exchange.

AOL’s Business Strategy

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AOL = Content + Ads + Communications

Content. Producing high quality, premium digital content at massive scale.

Advertising. Re-defining branded advertising with innovations in planning, buying, targeting and reporting/insights.

Communications. Re-inventing AOL communications platforms, such as email and AIM, as content and advertising communications and distributions tools.

AOL is committed to creating the world’s most simple and stimulating content and online experiences.

“Our new identity is uniquely dynamic. Our business is focused on creating world-class experiences for consumers and AOL is centered

on creative and talented people - employees, partners, and advertisers. We have a clear strategy that we are passionate about

and we plan on standing behind the AOL brand as we take the company into the next decade.”

~Tim Armstrong

Let’s take a sneak peek: http://corp.aol.com/

The new brand identity will be fully unveiled when AOL common stock begins trading on the New York Stock Exchange.

Aol.’s New Brand

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AOL still faces negative and dated perceptions in the market that it lacks creativity and innovation.

The new identity is intended to change every part of that perception.

Spin-off Background

• In late May, TW’s board approved the complete legal and structural separation of AOL from Time Warner

• The benefits identified to spinning off AOL included:Focused business strategy for TW and AOLAbility for investors to make independent investment decisions

• Decision was made to keep the subscription business as part of the new AOL Inc. entity

Access service is considered a valuable distribution channel for our web services

• Time Warner will effect the spin-off by distributing a dividend to its shareholders shares of AOL common stock

Immediately after the spin-off, all TW shareholders will therefore also be AOL shareholders

• Stock will be listed on the NYSE with the ticker symbol ‘AOL’

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Considerations for AOL as a standalone company

• Conversion into AOL Inc.All existing assets and liabilities will move into a new entity, AOL Inc.

The AOL LLC shell will remain with Time Warner as a debt guarantee entity

• Focused efforts surroundingCash PoolingsTreasuryTaxFinancial Reporting Structure

• Corporate governance requirementsAudit committeeBoard of directorsStandalone internal audit functionTreasury functionInvestor relationsIncreased legal and financial reporting responsibility

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Considerations for AOL as a standalone company

• External communicationsQuarterly earnings releases

Conference calls/Q&As with analysts

Annual shareholder meetings

• Compliance functionsSOX compliance

Internal audit

Standalone EY audits & process

• Standalone benefits/equity – HR managing this process

• Cash management functionCurrently all cash swept to TW - we’ll be able to better manage/focus our investing needs on what’s best for AOL

• SEC filingsContinued responsibilities of an SEC registrant

Quarterly: 10-Q filings, 40 days after quarter-end

Annual: 10-K filings, 60 days after year-end

Proxy statements, 8-Ks, other filings as needed

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SEC Filings

AOL Inc. Form 10 was declared effective onNovember 17, 2009

This was an iterative process since March 2009, which including responding to SEC comments and additional financial filings for the periods ending June 30 and September 31

The newly spun-off company (AOL Inc.) is now subject to the periodic reporting requirements of the SEC

AOL’s Form 10 includes:Audited financial statements as of December 31, 2008 and 2007 and for the three years ended December 31, 2008

Unaudited financial statements for Fiscal Year 2009

Listing of directors and disclosure of executive compensation

Investors now have the same current info for AOL Inc. that’s available for any other public company. Find more details at http://corp.aol.com/

Form 10: http://www.sec.gov/Archives/edgar/data/1468516/000119312509235507/dex991.htm

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Dynamics of a Spin-off

• Determining where assets best reside to maximize shareholder value

Parent company or spin-off company

• Determining transition servicesDoes the spin-off company have the capabilities to perform or purchase the services

• Establishing a credit facilityUnderwritten by parent or not underwritten

Positive cash flow is essential

Owners equity (restart)

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