Overstock.com 2013 Annual Report Download - page 46
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Table of Contents
During the year ended December 31, 2013 we reversed approximately $471,000 of lease termination costs primarily due to changes in our
restructuring accrual as a result of our reoccupation of a portion of formerly restructured office space. We incurred $76,000 of restructuring charges during the
year ended December 31, 2012 due to changes in the estimate of sublease income as a result of our entering into a new sublease agreement and ceasing the use
of some of our office facilities.
Depreciation expense is classified within the corresponding operating expense categories on the consolidated statements of operations as follows (in
thousands):
Cost of goods sold - direct
$380
$470
Technology
12,917
14,177
General and administrative
1,225
1,362
Total depreciation and amortization, including internal-use software and website development
$14,522
$16,009
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, 2013 and 2012 totaled $127,000 and $116,000, respectively.
Interest expense is primarily related to interest incurred on line of credit and our capital leases. Interest expense for the years ended December 31, 2013
and 2012 totaled $113,000 and $809,000, respectively. The decrease is primarily due to our repayment of the $17.0 million in advances under the U.S. Bank
Financing Agreement in November 2012.
Other income (expense), net for the year ended December 31, 2013 decreased to $(235,000) from $3.7 million in 2012 primarily related to $1.7
million of decreased Club O rewards breakage due to fewer expiring promotional memberships and $1.5 million of losses on our investment in precious
metals.
Our benefit for income taxes for the year ended December 31, 2013 of $72.2 million is primarily due to our decision to release our deferred tax asset
valuation allowance of $79.7 million at December 31, 2013. In our decision to release the valuation allowance we concluded that the positive evidence
outweighed the negative evidence and that it was more likely than not that all of our federal and state deferred tax assets will be realized. See Item 15 of Part IV,
"Financial Statements"—Note 20—"Income Taxes". Our provision for income taxes for the year ended December 31, 2012 of $485,000 was for federal
alternative minimum tax and certain income tax uncertainties, including interest and penalties.
Based upon our historical experience, revenue typically increases during the fourth quarter because of the holiday retail season and gross margin
decreases due to increased sales of certain lower margin products, such as electronics. The actual quarterly results for each quarter could differ materially
depending upon consumer preferences, availability of product and competition, among other risks and uncertainties. Accordingly, there can be no assurances
that seasonal variations will not materially affect our results of operations in the future.
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