Overstock.com 2011 Annual Report Download - page 67
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Table of Contents
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,
2011 2010 2009
Cost of goods sold—direct $ 714 $ 1,179 $ 1,264
Technology 14,433 12,489 10,943
General and administrative 1,203 912 676
Total depreciation and amortization, including internal-use software and website
development $16,350 $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, 2011 and 2010 totaled $161,000 and $157,000, respectively.
Interest expense
Interest expense is related to interest incurred on our Senior Notes, finance obligations, line of credit and our capital leases. Interest expense for the year
ended December 31, 2011 and 2010 totaled $2.5 million and $3.0 million, respectively. The decrease in interest expense is primarily a result of
extinguishments of our Senior Notes, partially offset by an increase from our finance obligations and line of credit.
Other income, net
Other income, net for the years ended December 31, 2011 and 2010 totaled $278,000 and $2.1 million, respectively. The decrease was primarily due to a
$1.2 million loss on early retirement of our finance obligations resulting from a prepayment premium in 2011 and a $346,000 decrease due to gains on Senior
Notes buybacks in 2010.
Income taxes
Our provision (benefit) for income taxes for the years ended December 31, 2011 and 2010 of ($142,000) and $359,000 is for federal alternative
minimum tax and certain income tax uncertainties, including interest and penalties. As of December 31, 2011 and December 31, 2010 we had federal net
operating loss carry forwards of approximately $192.5 and $166.7 million, respectively, and state net operating loss carry forwards of approximately $176.1
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 Internal Revenue Code Section 382 would limit the amount of net operating losses that could be used in any annual
period. Our net operating loss carryforwards will begin to expire in 2018.
Seasonality
Based upon our historical experience, revenue typically increases during the fourth quarter because of the holiday retail season. The actual quarterly
results for each quarter could differ materially depending upon consumer preferences, availability of product and competition, among other risks and
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