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Q3 2012 Earnings Call
November 06, 2012 8:00 am ET
Timothy M. Armstrong - Chairman and Chief Executive Officer
Karen E. Dykstra - Chief Financial Officer, Director, Chairman of Audit Committee, Chairman of Finance Committee and Member of Executive Committee
Arthur Minson - Chief Operating Officer and Executive Vice President
Brian J. Pitz - Jefferies & Company, Inc., Research Division
Ross Sandler - Deutsche Bank AG, Research Division
Kenneth Sena - Evercore Partners Inc., Research Division
Neil A. Doshi - Citigroup Inc, Research Division
Laura A. Martin - Needham & Company, LLC, Research Division
Benjamin A. Schachter - Macquarie Research
Stephen Ju - Crédit Suisse AG, Research Division
Ryan Ripp - Barclays Capital, Research Division
Previous Statements by AOL
» AOL's CEO Discusses Q2 2012 Results - Earnings Call Transcript
» AOL's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» AOL's CEO Discusses Q4 2011 Results - Earnings Call Transcript
Good morning. Thanks, operator, and everyone, for joining us for our third quarter 2012 earnings call. You can find our Q3 earnings press release and accompanying slides and trending schedules on our website.
On the call with me today is our Chairman and CEO, Tim Armstrong; our CFO, Karen Dykstra; and our COO, Artie Minson.
We will make some brief remarks on the quarter and on our overall strategy, and then we will open the lines up for Q&A.
But first, I will remind you that during this call, we may discuss our outlook for future financial and operating performance, corporate strategy, marketing and product plans, technology improvements, cost initiatives, planned investments, as well as our expectations for the economy and online advertising in general. These forward-looking statements typically are preceded by words such as we will, we expect, we believe, we anticipate or similar statements. These forward-looking statements are subject to risks and uncertainties, and our actual results could differ materially from the views expressed today.
Reported results should not be indicative of future performance. Some of these risks have been set in our annual report, Form 10-K, for the year ended December 31, 2011, filed with the SEC. All information discussed in this conference call is as of today, November 6, 2012, and we do not intend and do not undertake any duty to update this information to reflect future events or circumstances.
We will also discuss certain non-GAAP financial measures, including adjusted OIBDA and free cash flow. I will refer you to the press release in the Investor Relations section of our website for all comparable GAAP measures and full reconciliations.
Finally, from time to time, we post information about AOL on our Investor Relations website at ir.aol.com and on our official corporate blog at blog.aol.com.
And with that, I'll turn it over to Tim.
Timothy M. Armstrong
Thanks, Eoin. Good morning, everybody. Thanks for joining the call. With me are Karen and Artie. And most importantly, to kick the call off, I wanted to formally welcome Karen into the AOL family as our new CFO and new partner at AOL. She has been an invaluable board member for the past 3 years, and we're honored to have her join us full time. Karen is a very talented executive, but most of all, she's a great team player, and our entire management team and board look forward to continuing to work with her. So Karen, formally?
Karen E. Dykstra
Thank you, Tim. It's great to be here this morning.
Timothy M. Armstrong
So overall, it's great to be here this morning also because we are pleased with our results and wanted to highlight 3 simple themes for investors as you look through our results.
Number one is AOL is continuing our trend of strategic operational and financial improvements and is setting up for sustained top line and bottom line growth. Number two, we have delivered concrete shareholder value. By the close of 2012, we are planning to have reduced our outstanding shares by roughly 30%. As an investor, you will own a significantly larger percentage of a vastly improved company. Additionally, shareholders will be receiving $5.15 per share from a cash dividend before the end of the year. The next and third -- the next phase of the company will be about growth, and we are looking forward to being able to take advantage of the investments we have made in premium content, advertising and AOL core services. We are single-minded on returning to growth and the company's organized and motivated to get there.
Before we jump into results, though, I wanted to share with you some updates on our work around Sandy. I don't think there was a company in the world that covered Sandy more extensively and comprehensively than we did at AOL. AOL and our brands have been at the epicenter of Sandy because we have brands that live at the center of communities and the center of information for the economy. Our teams have worked 24 by 7 to connect our platforms to tens of millions of people. We had 329 Patch sites that have been affected by Sandy. There have been over 14,000 Sandy-related articles and blog posts written on Patch. Last Tuesday was the highest traffic day in the history of Patch, nearly twice as high as the previous best. Tuesday also had the highest number of search entries in the history of Patch. We are seeing twice as much social traffic as a typical October day and over 3x as much mobile usage.
Over the past 2 days, traffic at Sandy sites has quadrupled versus normal levels, and we've seen a 700% week-over-week increase in Patch iPhone app downloads. Our users have also uploaded between 7,000 and 10,000 related photos and videos to the Patch platform. Huffington Post has also been doing a tremendous job covering Sandy, and we've had roughly 10 million unique visitors to our Sandy coverage and hundreds of millions of page views. The combination of Patch locally and HuffPost regionally and nationally has been powerful for getting people information they need.
But there's a more important story behind Sandy that was not on our platforms, but was from our AOL team. On Saturday morning this past weekend, a group of AOLers decided to directly help members of our Patch communities. In less than 48 hours, hundreds of AOLers in Dulles, Baltimore, D.C. and around the country organized a physical procurement of goods based on the needs we aggregated directly from the most devastated Patch towns. I wanted to give a special shoutout to Jon Brod, who's been leading the effort at AOL. By Sunday afternoon, we had multiple 18-wheelers that were packed Sunday and overnight into Monday and rolled out on Monday to those Patch towns, and they will be delivering thousands of boxes to families with supplies they need the most.