Overstock.com 2011 Annual Report Download - page 134
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Table of Contents
Overstock.com, Inc.
Notes to Consolidated Financial Statements (Continued)
20. INCOME TAXES (Continued)
The components of our deferred tax assets and liabilities as of December 31, 2011 and 2010 are as follows (in thousands):
December 31,
2011 2010
Deferred tax assets and liabilities:
Net operating loss carry-forwards $ 76,455 $ 66,241
Temporary differences:
Accrued expenses 3,317 5,536
Reserves and other 5,705 6,369
Depreciation and amortization (1,860) (1,095)
83,617 77,051
Valuation allowance (83,617) (77,051)
Net asset $ — $ —
As a result of our history of losses, a valuation allowance has been provided for the full amount of our net deferred tax assets as we believe that it is more
likely than not that these benefits will not be realized. We recorded a tax benefit of ($142,000) for the year ended December 31, 2011, for federal alternative
minimum taxes, state and foreign taxes.
At December 31, 2011 and 2010, we had U.S. federal net operating loss carry-forwards of approximately $192.5 million and $166.7 million and state net
operating loss carry-forwards of approximately $176.1 million and $150.7 million, respectively, which may be used to offset future taxable income. We are
currently reviewing whether we had any ownership changes. The result of having ownership changes under IRS Code Section 382 would limit the amount of
net operating losses that could be used in any annual period. Our carry-forwards begin to expire in 2018.
The income tax provision differs from the amount computed by applying the U.S. federal income tax rate of 35% to loss before income taxes for the
following reasons (in thousands):
Year ended December 31,
2011 2010 2009
U.S. federal income tax provision (benefit) at statutory rate $ (6,853) $ 4,940 $ 2,762
State income tax expense, net of federal benefit 45 86 112
Stock based compensation expense 70 484 781
Other 30 73 64
Change in valuation allowance 6,566 (5,224) (3,462)
Income tax provision (benefit) $ (142) $ 359 $ 257
We are subject to audit by the IRS and various states for periods since inception. We do not believe there will be any material changes in our
unrecognized tax positions over the next 12 months. Our policy is to recognize interest and penalties accrued on any unrecognized tax positions as a
component of income tax expense.
F-38