Overstock.com 2010 Annual Report Download - page 69

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Table of Contents
for related technology equipment and software development as more items were fully depreciated. This decrease was partially offset by an increase in
compensation of approximately $7.2 million related to an increase in technology staff and an increase in annual bonus expense of $1.4 million for the year
ended December 31, 2009 due to improved company financial performance.
Technology expenses include stock-based compensation expense of $961,000 and $870,000 for the years ended December 31, 2009 and 2008,
respectively.
General and administrative expenses
For the years ended December 31, 2009 and 2008, general and administrative ("G&A") expenses totaled $48.9 million and $39.3 million, representing
5.6% and 4.7% of total revenue for those periods, respectively. The $9.6 million or 24% increase in G&A expenses, is primarily due to an increase in
compensation expense of approximately $6.0 million related to an increase in general and administrative staff, an increase in annual bonus expense of
$3.8 million and also $1.25 million related to the termination of a consulting arrangement with Icent LLC. Icent LLC's chief executive officer is James V.
Joyce, who resigned from his position as a member of the Board of Directors on April 1, 2009. The increase in G&A expenses is also related to additional
facilities costs relating to the lease of a new customer service center and an increase in legal expenses of approximately $4.3 million during the year ended
December 31, 2009 compared to the same period in 2008. However, the increase in legal expense for 2009 was offset by $7.1 million received from the
settlement of legal matters.
General and administrative expenses include stock-based compensation expense of approximately $3.0 million and $2.2 million for the years ended
December 31, 2009 and 2008, respectively.
Restructuring
Under the restructuring program, we recorded $12.3 million of restructuring charges for the year ended December 31, 2007. There were no restructuring
charges during the years ended December 31, 2009 and 2008 and we reversed approximately $66,000 and $299,000 of the lease termination costs liability
during the years ended December 31, 2009 and 2008, respectively, due to changes in the estimate of sublease income. (see Item 15 of Part IV, "Financial
Statements"—Note 3—"Restructuring Expense").
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,
2009 2008
Cost of goods sold—direct $ 1,264 $ 1,674
Technology 10,943 21,140
General and administrative 676 154
Total depreciation and amortization, including internal-use software
and website development $ 12,883 $ 22,968
Non-operating income (expense)
Interest income and interest expense
Interest income is primarily derived from the investment of our cash and cash equivalents. The decrease in interest income to $170,000 for the year
ended December 31, 2009 from $3.2 million for
63