Overstock.com 2011 Annual Report Download - page 84

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Table of Contents
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We do not use derivative financial instruments in our investment portfolio, except for an interest rate cap agreement on our line of credit, and we have no
foreign exchange contracts. Our financial instruments consist of cash and cash equivalents, marketable securities, trade accounts and contracts receivable,
accounts payable and long-term obligations. We consider investments in highly-liquid instruments with a remaining maturity of 90 days or less at the date of
purchase to be cash equivalents.
Our exposure to market risk for changes in interest rates relates primarily to our short-term investments and short-term obligations; thus, fluctuations in
interest rates would not have a material impact on the fair value of these securities. However, the fair values of our investments may be subject to fluctuations
due to volatility of the stock market in general, investment-specific circumstances, and changes in general economic conditions.
At December 31, 2011, we had $99.0 million in cash and cash equivalents including restricted cash. Hypothetically, an increase or decrease in interest
rates of one hundred basis points would have an estimated impact of $990,000 on our earnings or loss or cash flows of these instruments.
At December 31, 2011, we had $17.0 million outstanding under our line of credit, and letters of credit totaling $2.0 million were outstanding under our
credit facility. Hypothetically, an increase or decrease in interest rates of one hundred basis points would have an estimated impact of $190,000 on our
earnings or loss or cash flows of these instruments. We have entered into an interest rate cap agreement with U.S. Bank with an effective date of October 1,
2011 limiting our exposure for one-month LIBOR at 0.5% for the term of the Financing Agreement.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required by this item are included in Part IV, Item 15 of this Form 10-K and are presented beginning on
page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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