You don't need cash to acquire companies ( http://www.billparish.com/citigrouppyramidintro.html ).

I dunno they seem to be buying a lot of stuff recently so they must have some cash.

Don't forget its time warner as well isn't it?

Yeah, apparently, according to wikipedia, Time Warner is thinking about splitting 'AOL internet access and adversting businesses into two, with the possibility of later selling the internet access division.' So they haven't done it yet.