Overstock.com 2010 Annual Report Download - page 118
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Table of Contents
Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
13. BORROWINGS (Continued)
Capital leases
We have leased certain software and computer equipment, under non-cancelable leases that expire on various dates through 2013.
Software and equipment relating to the capital leases totaled $1.7 million at December 31, 2010 and 2009, with accumulated depreciation of $902,000
and $335,000, respectively. Depreciation expense of assets recorded under capital leases was $567,000 and $335,000 for the years ended December 31, 2010
and 2009, respectively.
Future payments of capital lease obligations are as follows (in thousands):
Payments due by period
2011 $ 798
2012 116
2013 4
Total minimum lease payments 918
Less: amount representing interest 76
Present value of capital lease obligations 842
Less: current portion 729
Capital lease obligations, non-current $ 113
3.75% Convertible Senior Notes
In November 2004, we completed an offering of $120.0 million of 3.75% Convertible Senior Notes due 2011 (the "Senior Notes"). Proceeds to us were
$116.2 million, net of $3.8 million of initial purchaser's discount and debt issuance costs. The discount and debt issuance costs are being amortized using the
straight-line method which approximates the effective interest method. We recorded amortization of discount and debt issuance costs related to this offering
totaling $228,000, $331,000 and $334,000 during the years ended December 31, 2010, 2009 and 2008, respectively. Interest on the Senior Notes is payable
semi-annually on June 1 and December 1 of each year. The Senior Notes mature on December 1, 2011 and are unsecured and rank equally in right of payment
with all existing and future unsecured, unsubordinated debt and senior in right of payment to any existing and future subordinated indebtedness.
The Senior Notes are convertible at any time prior to maturity into our common stock at the option of the note holders at a conversion price of $76.23 per
share or, approximately 454,000 shares in aggregate (subject to adjustment in certain events, including stock splits, dividends and other distributions and
certain repurchases of our stock, and certain fundamental changes in our ownership). We have the right to redeem the Senior Notes, in whole or in part, for
cash at 100% of the principal amount plus accrued and unpaid interest. Upon the occurrence of a fundamental change (including the acquisition of a majority
interest in us, certain changes in our board of directors or the termination of trading of our stock) meeting certain conditions, holders of the Senior Notes may
require us to repurchase, for cash, all or part of their notes at 100% of the principal amount plus accrued and unpaid interest.
F-29