In a surprising but very welcomed move, AOL Inc. unveiled their plans to return $1.1 billion to shareholders via a special dividend.  The company also authorized a special one-time cash dividend of $5.15 to be paid on December 14.

“Today’s announcement underscores AOL’s commitment to delivering value for our shareholders,” Chairman and Chief Executive Tim Armstrong said. “AOL remains committed to creating and unlocking value for all shareholders through smart execution and disciplined management of our asset portfolio.”

AOL also announced that they will repurchase $600 million of stock under an accelerated stock-repurchase agreement to utilize the share repurchase authorization previously approved and an incremental $10 million authorized by the Company on August 26.  The specific number of shares that the company will repurchase will be determined by the discount to the volume-weighted average share price of AOL common stock during the agreement period adjusted down by $5.15 for the payment of the special dividend. Also, the purchase price will be subject to floor and cap provisions establishing a minimum and maximum number of repurchased shares.

“Since becoming a public company in December 2009, we have demonstrated an ability to both unlock and prudently manage our valuable asset portfolio, including our tax assets,” said AOL Chief Operating Officer and Acting Chief Financial Officer, Artie Minson. “Today we have done both again, outlining a clear path to returning $1.1 billion in cash to shareholders, while putting in place a necessary mechanism to ensure the preservation of our valuable tax assets.”