Overstock.com 2014 Annual Report Download - page 82

Table of Contents
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As used herein, "Overstock," "Overstock.com," "O.co," "we," "our" and similar terms include Overstock.com, Inc. and our majority-owned subsidiaries,
unless the context indicates otherwise. We were formed on May 5, 1997 as D2-Discounts Direct, a limited liability company. On December 30, 1998, we were
reorganized as a C Corporation in the State of Utah and reincorporated in Delaware in May 2002. On October 25, 1999, we changed our name to
Overstock.com, Inc.
We are an online retailer offering price-competitive brand name, non-brand name and closeout merchandise, including furniture, home decor,
bedding and bath, housewares, jewelry and watches, apparel and designer accessories, electronics and computers, and sporting goods, among other products.
We also sell hundreds of thousands of best seller and current run books, magazines, CDs, DVDs and video games ("BMMG"). We sell these products through
our Internet websites located at www.overstock.com, www.o.co and www.o.biz (referred to collectively as the "Website"). Although our three websites are
located at different domain addresses, the technology and equipment and processes supporting the Website and the process of order fulfillment described
herein are the same for all three websites.
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We have prepared the accompanying consolidated financial statements pursuant to generally accepted accounting principles in the United States
("GAAP"). Preparing financial statements requires us to make estimates and assumptions that affect the amounts that are reported in the consolidated financial
statements and accompanying disclosures. Although these estimates are based on our best knowledge of current events and actions that we may undertake in
the future, our actual results may be different from our estimates. The results of operations presented herein are not necessarily indicative of our results for any
future period.
Our consolidated financial statements for the year ended December 31, 2013 include an immaterial revision to current and long-term deferred tax
assets and our provision (benefit) for income taxes in the fourth quarter of 2013. The effect of the revision was to reduce current and long-term deferred tax
assets by $284,000 and $3.8 million, respectively, with an offsetting increase of $4.1 million to our provision (benefit) for income taxes in 2013. We
evaluated these changes in accordance with Staff Accounting Bulletin No. 99, Materiality ("SAB 99"), and Staff Accounting Bulletin No. 108, Considering
the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements ("SAB 108"), and determined that the revisions
are not material to the prior period.
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The accompanying consolidated financial statements include our accounts and the accounts of our wholly-owned and majority-owned subsidiaries.
All intercompany account balances and transactions have been eliminated in consolidation.
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The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions that affect
the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements
and accompanying notes. Estimates are used for, but not limited to, investment valuation, receivables valuation, valuation of derivative financial
instruments, revenue recognition, sales returns, incentive discount offers, inventory valuation, depreciable lives of fixed assets and internally-developed
software, goodwill valuation, intangible valuation, income taxes, stock-based compensation, performance-based compensation, restructuring liabilities and
contingencies. Actual results could differ materially from those estimates.
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