Overstock.com 2011 Annual Report Download - page 74

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Table of Contents
Technology expenses
We seek to efficiently invest in technology, including web services, customer support solutions, website search, and expansion of new and existing
product categories, as well as continuing to enhance the customer experience, improving our process efficiency and supporting our logistics infrastructure.
The following table reflects our technology expenses for the years ended December 31, 2010 and 2009 (in thousands)
Year ended
December 31,
2010 2009 $ Change % Change
Technology expenses $ 58,260 $ 52,336 $ 5,924 11.3%
Technology expenses as a percent of net revenues 5.3% 6.0%
The $5.9 million increase is primarily due to a $6.5 million increase in salaries and benefits expense (primarily due to increases in staffing), and a
$1.5 million increase in depreciation expense as result of investments in information technology assets in 2010, partially offset by a $1.4 million decrease in
bonus expense in 2010 as a result of lower than expected financial performance for the year ended December 31, 2010.
Technology expenses include stock-based compensation expense of $1.1 million and $961,000 for the years ended December 31, 2010 and 2009,
respectively
General and administrative expenses
The following table reflects our general and administrative expenses for the years ended December 31, 2010 and 2009 (in thousands):
Year ended
December 31,
2010 2009 $ Change % Change
General and administrative expenses $55,650 $48,906 $ 6,744 13.8%
General and administrative expenses as a percent of net revenues 5.1% 5.6%
The $6.7 million increase is due to a $5.1 million increase in salaries and benefits expense (primarily due to increases in staffing), a $2.3 million increase
in professional service fees for our external auditors and a $2.0 million increase in legal fees, partially offset by a $3.2 million decrease in bonus expense in
2010 as a result of lower than expected financial performance for the year ended December 31, 2010. The increase in legal fees primarily resulted from a
$2.6 million reduction in payments received from the settlement of legal matters during 2010 compared to 2009. We recognized a reduction in general and
administrative expenses of $4.5 million and $7.1 million during the years ended December 31, 2010 and 2009, respectively, related to the settlement of legal
matters.
General and administrative expenses include stock-based compensation expense of approximately $3.2 million and $3.0 million for the years ended
December 31, 2010 and 2009, respectively.
Restructuring
There were no restructuring charges during the years ended December 31, 2010 and 2009. We reversed $569,000 of lease termination costs liability
during the year ended December 31, 2010 due to changes in our estimate of sublease income, primarily as a result of our entering into agreements with a
sublessee to terminate the subleases and have us re-occupy a portion of the space previously
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