Overstock.com 2010 Annual Report Download - page 64
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Table of Contents
Operating Expenses
Overall, our total operating expenses increased 11.5% to $174.7 million for the year ended December 31, 2010 from $156.7 million for the year ended
December 31, 2009, while total net revenues increased 24.3% and gross profit increased 15.1%.
Depreciation expense
Depreciation expense is classified within the corresponding operating expense categories on the consolidated statements of operations as follows (in
thousands):
Year ended December 31,
2010 2009
Cost of goods sold—direct $ 1,179 $ 1,264
Technology 12,489 10,943
General and administrative 912 676
Total depreciation and amortization, including internal-use software
and website development $ 14,580 $ 12,883
Non-operating income (expense)
Interest income
Interest income is primarily derived from the investment of our cash in cash equivalents and short-term investments. Interest income for the years ended
December 31, 2010 and 2009 totaled $157,000 and $170,000, respectively.
Interest expense
Interest expense is related to interest incurred on our Senior Notes, our finance obligations and our capital leases. Interest expense for the year ended
December 31, 2010 and 2009 totaled $3.0 million and $3.5 million, respectively. The decrease in interest expense is primarily a result of extinguishments of
long-term debt.
Other income, net
Other income, net for the years ended December 31, 2010 and 2009 totaled $2.1 million and $3.3 million, respectively. The decrease was primarily due
to lower gains on extinguishment of long-term debt, partially offset by an increase in gift card breakage income for the year ended December 31, 2010.
Income taxes
Our provision for income taxes for the years ended December 31, 2010 and 2009 of $359,000 and $257,000 is for federal alternative minimum tax and
certain income tax uncertainties, including interest and penalties. As of December 31, 2010 and December 31, 2009 we had federal net operating loss carry
forwards of approximately $166.7 million and $180.9 million, respectively, and state net operating loss carry forwards of approximately $150.7 million and
$165.0 million, respectively, which may be used to offset future taxable income. We may have experienced ownership changes under Internal Revenue Code
Section 382 that may limit our ability to fully use our net operating losses. Our net operating loss carryforwards will begin to expire in 2018.
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