Overstock.com 2010 Annual Report Download - page 133

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Table of Contents
Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
22. RELATED PARTY TRANSACTIONS (Continued)
related expenses incurred by our executives on company business. In 2010, 2009 and 2008 we reimbursed Haverford-Valley L.C. $139,000, $79,000, and
$111,000, respectively, for these expenses.
During 2010, we repurchased a portion of our Senior Notes held by Fairfax Financial Holdings Limited ("Fairfax") or an affiliate of Fairfax having an
aggregate principal amount of $15.2 million for $15.0 million in cash. After the repurchase, Fairfax held Senior Notes having an aggregate principal amount
of $21.7 million. Fairfax has beneficial ownership of more than 5% of our common stock. Subsequent to our repurchase of the Senior Notes from Fairfax, we
appointed Mr. Samuel A. Mitchell to our Board. Mr. Mitchell is a Managing Director of Hamblin Watsa Investment Counsel, a wholly-owned subsidiary of
Fairfax.
On February 1, 2011, we repurchased a portion of our Senior Notes held by Chou Associates Management Inc. ("Chou") or an affiliate of Chou having
an aggregate principal amount of $10.1 million for $10.1 million in cash. The repurchase was for 100% of Senior Notes that were held by Chou. Chou has
beneficial ownership of more than 5% of our common stock.
23. BUSINESS SEGMENTS
Segment information has been prepared in accordance with ASC Topic 280 Segment Reporting. Segments were determined based on how we manage
the business. There were no inter-segment sales or transfers during the years ended December 31, 2010, 2009 and 2008. We evaluate the performance of our
segments and allocate resources to them based primarily on gross profit. The table below summarizes information about reportable segments for the years
ended December 31, 2010, 2009 and 2008 (in thousands):
Year ended December 31,
Direct Fulfillment
partner Total
2010
Revenue, net $ 209,646 $ 880,227 $ 1,089,873
Cost of goods sold 187,124 713,109 900,233
Gross profit $ 22,522 $ 167,118 $ 189,640
Operating expenses (174,675)
Other income (expense), net (717)
Provision for income taxes (359)
Net income $ 13,889
2009
Revenue, net $ 150,901 $ 725,868 $ 876,769
Cost of goods sold 130,890 581,127 712,017
Gross profit $ 20,011 $ 144,741 $ 164,752
Operating expenses (156,725)
Other income (expense), net (23)
Provision for income taxes (257)
Net income $ 7,747
F-44