Overstock.com 2010 Annual Report Download - page 119
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Table of Contents
Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
13. BORROWINGS (Continued)
At present we do not have any plan to redeem the outstanding Senior Notes in accordance with their redemption provisions but we may acquire
additional Senior Notes in future open market purchases. To the extent the Senior Notes remain outstanding at maturity, we intend to pay them at maturity
either with proceeds from operations or from financing activities.
The indenture governing the Senior Notes requires us to comply with certain affirmative covenants, including making principal and interest payments
when due, maintaining our corporate existence and properties, and paying taxes and other claims in a timely manner. Wilmington Trust Company currently
serves as Trustee under the indenture.
Under our repurchase program discussed below, we retired $25.4 million of the Senior Notes during year ended December 31, 2010 for $24.9 million in
cash, resulting in a gain of $346,000 on early extinguishment of debt, net of $158,000 of associated unamortized discount. We retired a total $7.4 million of
our Senior Notes during the year ended December 31, 2009 for $4.6 million in cash, resulting in a gain of $2.8 million, net of $92,000 amortization of debt
discount (see Note 17—"Stock and Debt Repurchase Program"). As of December 31, 2010 and 2009, a face amount of $34.6 million and $60.0 million of the
Senior Notes remain outstanding with a carrying amount of $34.5 million and $59.5 million and $141,000 and $528,000 of debt discount, respectively.
On February 1, 2011 our Board of Directors approved a $10 million increase to our previously-announced debt repurchase program. With this increase
we may repurchase up to $15 million of our outstanding Senior Notes. On February 7, 2011, we retired an additional $10.1 million of our outstanding Senior
Notes reducing the balance outstanding to a face amount of $24.5 million.
14. COMMITMENTS AND CONTINGENCIES
Summary of future minimum lease payments for all operating leases
Minimum future payments under all operating leases as of December 31, 2010, are as follows (in thousands):
Payments due by period
2011 $ 8,743
2012 8,221
2013 7,552
2014 7,750
2015 6,164
Thereafter 1,346
$ 39,776
Rental expense for operating leases totaled $8.0 million, $7.5 million and $9.1 million for the years ended December 31, 2010, 2009 and 2008,
respectively. Estimated sublease income of $1.5 million is expected over the next five years of which $885,000 is anticipated to be received in the next
12 months.
Legal Proceedings
From time to time, we are involved in litigation concerning consumer protection, employment, intellectual property and other commercial matters related
to the conduct and operation of our
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