Overstock.com 2013 Annual Report Download - page 55

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Table of Contents

Our contractual obligations presented above exclude unrecognized tax contingencies, including interest and penalties, of $495,000 for which we
cannot make a reasonably reliable estimate of the amount and period of payment. For further information regarding the application of ASC 740-10-5, see the
information set forth under Item 15 of Part IV, "Financial Statements - Note 20 - Income Taxes," contained in the "Notes to Consolidated Financial Statements"
of this Annual Report on Form 10-K.


In November 2012, we repaid all amounts outstanding under our Financing Agreement with U.S. Bank National Association (“U.S. Bank”). The
Financing Agreement expired in accordance with its terms on December 31, 2012, and we entered into a $3.0 million cash-collateralized line of credit agreement
(the “Credit Agreement”) with U.S. Bank for the issuance of letters of credit. Advances under the Credit Agreement bear interest at one-month LIBOR plus
1.0%. The Credit Agreement matures on December 31, 2014. There were no amounts outstanding on the Credit Agreement at December 31, 2013 and 2012.
At December 31, 2012, no amounts were outstanding under the Financing Agreement. At December 31, 2013 and 2012, letters of credit totaling $1.6
million and $1.8 million, respectively, were issued on our behalf collateralized by compensating cash balances held at U.S. Bank, which are included in
Restricted cash in the accompanying consolidated balance sheets.

We have a commercial purchasing card (the “Purchasing Card”) agreement with U.S. Bank. We use the Purchasing Card for business purpose
purchasing and must pay it in full each month. At December 31, 2013, $517,000 was outstanding and $4.5 million was available under the Purchasing
Card. At December 31, 2012, $3.9 million was outstanding and $1.1 million was available under the Purchasing Card.

In March 2013, we entered into a capital lease arrangement for $2.6 million of computer equipment that will expire in 2017. We prepaid the entire
$2.6 million shortly after entering into the agreement in order to obtain discounted pricing. As such, we have no future payment obligations under capital
leases at December 31, 2013.

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that would be material to
investors.

Regulation G,  and other SEC regulations regulate the disclosure of certain non-GAAP
financial information.
Contribution (a non-GAAP financial measure) (which we reconcile to "Gross profit" in our statement of operations) consists of gross profit less sales
and marketing expense and reflects an additional way of viewing our results. Contribution Margin is Contribution as a percentage of revenues. When viewed
together with our GAAP results, we believe Contribution and Contribution margin provides management and users of the financial statements information
about our ability to cover our operating costs, such as technology and general and administrative expenses. Contribution and Contribution Margin are used in
addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.
You should review our financial statements and publicly-filed reports in their entirety and not rely on any single financial measure. The material limitation
associated with the use of Contribution is that it is an incomplete measure of profitability as it does not include all operating expenses or non-operating income
and expenses. Management compensates for these limitations when using this measure by looking at other GAAP measures, such as operating income (loss)
and net income (loss).
54